Guest essay by Eric Worrall
What is the difference between a centrally planned Communist economy, and an economy where Central bankers punish businesses which defy their investment directives?
Global Warming Is a Central Bank Issue
Ferdinando Giugliano
13 April 2018, 3:30 PM
Last week, central bank governors from the U.K., France and the Netherlands met in Amsterdam to discuss how to adapt regulation to the risks posed by climate change. Together with five other institutions (from China, Germany, Mexico, Singapore and Sweden), these central banks have formed the “Network for Greening the Financial System” (NGFS). This group has two objectives: sharing and identifying best practices in the supervision of climate-related risks, and enhancing the role of the financial sector in mobilizing “green” financing.
…
To do so, central bankers may need to extend the supervisory horizon beyond their usual time span. Climate change may only pose a threat for the balance sheet some years down the road, but these risks should be assessed now. Villeroy de Galhau argued in his speech that the financial sector should move towards “a compulsory transparency requirement,” so that companies are forced to provide a snapshot of their climate-related risks. It’s an idea supervisors around the world should embrace.
The idea that central banks should promote “green investment” — which the central bank group also endorses — is more problematic. For a start, the goal could conflict with the main central bank objective of preserving financial stability. For example, if a bank loan to a company which produces renewable energy is given a lower risk weight than now just because it is “green,” then supervisors would be giving banks the wrong incentive to load up on such assets. To his credit, Villeroy de Galhau said he would be against giving “green” assets a lower risk weight when establishing capital requirements — though it’s an idea which the European Commission is currently looking at.
But the French central banker said he would be in favor of giving higher risk weights to “brown assets,” which contribute to polluting the environment. He added that these could be included in the so-called “Pillar 2” requirements — which are set independently by supervisors. This plan would make “brown” assets dearer to hold in relative terms, but would not change the risk weight which is attached to “green” assets. The idea is that “brown” assets would become riskier as the world moves towards a low-carbon economy.
…
Read more: https://www.bloombergquint.com/markets/2018/04/13/global-warming-is-a-central-bank-issue
The suggestion that insurers are vulnerable to climate risk is ridiculous, but don’t take my word for it – read Warren Buffett’s explanation.
… Over the years, inflation has caused a huge increase in the cost of repairing both the cars and the humans involved in accidents. But these increased costs have been promptly matched by increased premiums. So, paradoxically, the upward march in loss costs has made insurance companies far more valuable. If costs had remained unchanged, Berkshire would now own an auto insurer doing $600 million of business annually rather than one doing $23 billion.
Up to now, climate change has not produced more frequent nor more costly hurricanes nor other weather- related events covered by insurance. As a consequence, U.S. super-cat rates have fallen steadily in recent years, which is why we have backed away from that business. If super-cats become costlier and more frequent, the likely – though far from certain – effect on Berkshire’s insurance business would be to make it larger and more profitable.
As a citizen, you may understandably find climate change keeping you up nights. As a homeowner in a low-lying area, you may wish to consider moving. But when you are thinking only as a shareholder of a major insurer, climate change should not be on your list of worries. …
Read more: http://www.berkshirehathaway.com/letters/2015ltr.pdf
Climate change might make insurance more expensive, but climate change might also make weather insurance more necessary. Insurers recoup any losses by raising their premiums to match the risk.
Central bankers of all people should be aware of this simple insurance business reality. So how do we explain the apparent ignorance behind claims that insurance businesses will be badly affected by climate change?
One possible explanation might be that central bankers see climate change as a convenient excuse to seize greater control of the economies they are tasked with governing, though I guess it is also possible that bankers making the climate insurance claims are utter incompetents.
Scientifically illiterate incompetents.
Its the apparent financial illiteracy which bothers me more.
They are hardly financially illiterate. They expect redistributive change to be accepted on the basis of the consensus’s prophecy of catastrophic anthropogenic global warming.
We have to worry. The World Bank and IMF have ruined the lives of hundreds of millions of people. link These central bankers are cut from the same cloth.
It’s a special kind of illiteracy. One has to be very well educated in order to be that far removed from reality. link
“Over the years, inflation has caused a huge increase in the cost of repairing both the cars and the humans involved in accidents. But these increased costs have been promptly matched by increased premiums. So, paradoxically, the upward march in loss costs has made insurance companies far more valuable. If costs had remained unchanged, Berkshire would now own an auto insurer doing $600 million of business annually rather than one doing $23 billion.”
Let me paraphrase, (by memory), from the Hitchhikers Guide to the Galaxy. My favourite incisive comedy actually.
We have decided to nominate the leaf as our currency. Consequently as there are many trees around here, we have all become incredibly rich. Unfortunately the excessive currency supply has driven down the value of the leaf and we are suffering from a considerable inflation. We have had a meeting and decided that in order to maintain the value of the leaf we will burn all the trees. https://www.youtube.com/watch?v=fMoPR2IA2Uk 2.16
Anyone see any similarity with the first quote above?
Cheers
Roger
http://www.thedemiseofchristchurch.com
the ‘inflation’ we live with, actually a forced devaluation of our printed money’s buying power, has come about by due to banks taking advantage of the electronic nature of money these days to flood economies with ‘money’ they invent when people take out loans.
It’s a breach of the intent behind laws that prohibited anyone but governments from printing money – laws that were introduced (in Australia at least) to prevent frauds, counterfeiters and shonky banks from printing however much monopoly money they wanted , convincing people it had worth.. which led to total collapses of our economy in the 1890s and 1930s.
Banks are so confident in their ability to get away with this, so self righteousness that they proudly explain how they engage in this ‘wealth creation’ as they call it,.
Of course now the bleary eyes of governments are slowly coming to focus on the banks, the few within the banks who have a brain are probably a tiny bit concerned about all this and know that their worthless money scam could bite them hard. To avoid this they’ll pull any sleigh of hand, clouds of smoke or exclamations of ‘look, sheep!’ while pointing upward that might distract government regulators a little longer as they continue to plunder the actual wealth while they hand out more fake-money loans and try to work out how to transmogrify money into something they have more control over.. and how they can wrestle the concept of money away from governments once and for all.
the bank of England’s articles on money creation are here (pdfs) and should frighten the pants of any numerate reader.
No, they know what they are doing. They are proposing gaming their own regulations so they can intervene in ways they think they should, without breaching their actual remits. This is the classic EU corruption, stick to the rules but allow the rules to be subverted at the level below scrutiny. How would notice if you change the risk of certain assets to discourage banks from holding those assets? Who would complain about such a sensible thing?
Banks do not create money when they loan out money that has been deposited.
At most, they are increasing the velocity of the money that is circulation.
There was a time a few hundred years ago when banks did create their own currency. The reason these private currencies failed was because of the difficulty of determining whether an out of town bank was trustworthy enough in order for a merchant to accept their currency.
Governments on the other hand get around this problem of trustworthiness by passing laws requiring everyone to accept their currency.
Must be protest season again…
http://capeandislands.org/post/it-s-time-march-science-again#stream/0
Australia has according to treasury figures, 32 billion in printed authorized bank notes.. yet in accounts and transition there is 20 trillion dollars. basically over 95% of Australia’s money is fabricated which explains the devaluation of cash money’s buying power. Again the bankers term for this – ‘inflation’, is a subterfuge.
It drives up prices and with it the investment in housing prices which only encourages the opportunistic (greedy) to demand more and more of this fabricated money. heck, it makes the prices go up and up and up – what on earth would motivate *anyone* to want to change this ? The bankers benefit, the investors benefit – in Australia’s case where 68% of our GDP is generated by services the only people who suffer will be the majority left holding the million dollar mortgages for ratty old cottages in the tatty areas of the cities where they could afford to buy, The bankers having reaped the benefits will be long gone when the train goes over the edge.
UN Environment
UN Inquiry: Design of a Sustainable Financial System
UN Environment: Inquiry Working Paper
‘On The Role Of Central Banks In Enhancing Green Finance’, Feb.2017, 27 pages
https://wedocs.unep.org/bitstream/handle/20.500.11822/16803/Role_Central_Banks_Green_Finance.pdf?sequence=1&isAllowed=y
Also available online.
UN Inquiry
Sustainable Finance by Country
Re: Green financing
Click on any country for webpage information.
http://unepinquiry.org/countries
UN Environment
UNEP Inquiry Publications
Re: Insurance industry issues.
‘Sustainable Insurance: The Emerging Agenda For Supervisors And Regulatiors’
At:
http://unepinquiry.org/publication/sustainable-insurance-the-emerging-agenda-for-supervisors-and-regulators
Webpage has links to more information on insurance issues.
UNEP FI
Principles for Sustainable Insurance
Signatories & supporters
http://www.unepfi.org/psi/signatory-companies
I love the assumption that the world is moving toward a low-carbon economy, like it is a done deal; only in their little minds. They like to talk about such things as if they are facts simply to be dealt with. Witht he enormously wasteful and fail-ful renewable energies and the current hate for new nuclear, how do they think this “low-carbon economy” is going to occur?
Should be easy – a statutory declaration lodged with an appropriate government department declaring a dedication to a carbon free economy by disciples, collaborators and zealots, Given many religious folk are happy to openly and proudly wear the symbols of their faith, a tattoo across the forehead of say C with a line through it (or even just ‘numpty’) would alert people not to sell this adherents any hydrocarbons.
these marked believers of carbon sin could then happily exist in harmony with nature without the evils of modern society impacting them as they gambol and frolic with the other creatures of the earth with occasional pauses to dig holes and burying wood in dedication to the carbon sequestration saints, or erect sacred solar panels that they built from leaves and twigs..
And the Chinese central bankers are there too! My guess is they are telling the Europeans they agree and then later the Chinese will quietly do nothing.
Sort of like their promises to start thinking about doing something regarding their increasing CO2 emissions in 20 years.
U.S. SEC
Re: The CPPIB purchase of renewable energy projects.
Edgar | Company Filings
Enter: NextEra Energy Partners, LP
Form – 8K: Filing date 2018-04-04
Has information on this recently announced agreement. Includes financial information.
http://www.sec.gov
The can’t be incompetents. The all have MBA’s these genius’s. They are MIndless Bloody Autocrats or for the less couth, Masturbating Bullshitting Assholes and of course, according to them, they see and know all.
BobM this has little to do with scientifically illiterate incompetents and far more to do with individuals raised and educated in Progressive/ socialist politics. The bankers are leftists rich elites who are trying to drive an agenda. Remember most of the bankers on Wall Street support Progressive candidates contrary to what the media tries to sell us about the “evil bankers.” They maybe evil but for far different reasons than we are led to believe.
A different take on NSFW … as in … it will destroy jobs. Not safe for work indeed.
That was my first thought, any country tied closely to the IMF for fiscal policy will suffer greatly.
No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other.
Go piss up a rope!
What kind of comment is that?
Alan Tomalty – Indeed. Nasty language, among other things, is a sign of a poor vocabulary and a weak ability to express your real thoughts. And it drags down the level of discourse hear. I don’t understand why the Moderator puts up with it.
Upa rope. None finer.
“Climate change might make insurance more expensive, but climate change might also make weather insurance more necessary.”….oh please
Read the quote from Warren Buffett.
I did already…that’s why the “oh please” Eric…..it sounds like pandering thrown in there
Latitude: So Warren Buffet is wrong?
what does this have to do with Buffett?……Eric wrote what I quoted and it sounds like Eric put it in there to pander…at least to me it did
Latitude, definitely not pandering. The climate crisis is such a logic fail on so many levels, its fun to explore some of the premises of alarmists to demonstrate their claims still don’t make sense. Buffett makes the point that weather is not getting worse, then goes on to make the point that even if weather did get worse, the viability of insurance businesses would not be damaged.
We’re going in circles you know…LOL
You could have just as easily said climate change might make insurance less expensive and less necessary…..a negative spin instead of a positive spin…..the positive spin sounds like what all the media, science papers, etc does
Not a big deal….I just sick and tired of seeing global warming in a positive spin mode..and I’ve become over sensitive to it
🙂
Left can’t get their way by law, in come the Fascist oligarchs.
Nonsensical comment. If additional disclosure were mandated, that would be a law, just like existing disclosure requirements. For example, oil companies are required to disclose information about reserves, resources and exploration results.
No, this is classic subversion of rules so that authorities can extend their reach beyond what it is supposed to be. Allowing central banks to use political criteria to judge the riskiness of assets is an appalling step.
There is no subversion going on. Good grief, institutional investors with trillions in funds are demanding it. https://www.greenbiz.com/article/investors-companies-demand-consistent-climate-risk-data
Chris, they are an unelected body. And since when do we want the rich investors making decisions for us?
This goes way beyond just “extra reporting”.
Bill, regulations can come from 2 sources. Governments (such as regulations to protect individuals from unfair banking, credit card, etc regulations. Or from private institutions, such as stock exchanges who listen to input from a combination of governments, individuals and institutional investors.
“institutional investors with trillions in funds are demanding”
Logic error. “Institutions” are not persons. They can’t “demand” anything, or say anything.
““Institutions” are not persons. They can’t “demand” anything, or say anything.”
Of course they can, it happens all the time. When the US Chamber of Commerce takes a position, they issue a press release stating their position. They instruct their lobbyists to pressure Congress to take action that is favorable to their position. “They” consists of the President and CEO of the Chamber, along with his staff, advisory boards and the Chamber’s Board of Directors.
Central Bankers apparently unaware that the era of central bankers is over. See:
https://en.wikipedia.org/wiki/List_of_cryptocurrencies
Here is the future of finance.
CC is creeping into every corner of our lives and in every case it has nothing to do with temperature. How could it when even the alarmists agree we’re only talking about small incremental increases even if the projections are correct …… and they are not. The temperature increases since the LIA were not only easily accommodated but welcomed and who’s to say that wouldn’t continue?
You are correct. Crypto Currency (CC) is creeping into every corner of our lives and in every case it has nothing to do with temperature.
It is comforting to see Warren Buffet’s sober analysis, which probably carries more weight than all the others combined.
But it shouldn’t take any kind of a financial genius to spot that a change that occurs slower than even a crippled snail can walk, is not a serious threat to anything or anyone.
Of course most of these Central Bankers are not actually charged with running a profitable business. They are political appointees, often not really accountable to anyone, though we learn that Mark Carney, the Bank of England bloke, also has a raving green wife. With all due respect, I doubt I could learn much useful from an author of a book about “Sustainable Livelihoods” with her current position and background which started as undergraduate Philosophy, Politics and Economics at Oxford.
Power corrupts and central banking power absolutely corrupts.
From Eric Worrall’s comments;
it is also possible that bankers making the climate insurance claims are utter incompetents.
If they were Australian bankers from the Big Four banks they have been mendaciously illiterate and incompetent for a very long time.
Quote from David Rockefeller’s speech at the 1991 Bilderberg Conference: “The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries.”
From his 2002 memoirs: ““Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and conspiring with others around the world to build a more integrated global political and economic structure — one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.”
Carney is married to Poison Ivy?
From the article:
“forced to provide a snapshot of their climate-related risks” ? … based on what ? … specifically ? … what numbers ? …exactly ? … based on what evidence ? … you mean “forced to be subservient to flawed conclusions popularly put forth via politicized verbiage aimed to control policy, but backed by not one shred of legitimately credible scientific support justifying any concern for such risks at all.”
What benchmarks quantify the risks ? (yeah, I’m not done yet) … who established such benchmarks ? … by what authority or expertise ? … tested against real-world observations or just adopted based on computer models that have proven time and again to be unreal ? … using WHAT financial figures extended from such ill conceived policies ? … truthfully calculated ? … using real-world scenarios ? …
I mean, come on, this is such bullshit, ridiculous, incompetent lip wagging that sounds good enough to look like intelligence but actually isn’t.
The Dunning–Kruger effect is a cognitive bias wherein relatively unskilled individuals suffer from illusory superiority, mistakenly assessing their ability to be much higher than is accurate. The bias was first experimentally observed by David Dunning and Justin Kruger of Cornell University in 1999.
The less people know, the more they backfill gaps in understanding with cliche thinking.
(Forrest, think Mosher… ☺)
We all suffer from a range of cognitive biases, but that’s one that is particularly problematic when it comes to the climate change denial movement. Thanks for the comment.
Kristi I dont know why I waste my time replying to you. However anyone that believes in a religion does not bother to test the hypothesis and therefore is not a scientist. I actually think that believing in a religion makes you dumber. There should be scientific studies on this. After all there have been grants given to studies on the cultural beliefs of indigenous attitudes on glacier retreat. The only “evidence that global warmists have for increases in atmospheric CO2 causing temperature increases is the *chart showing the 400000 year record of Vostok ice core CO2 proxy samples which no one has definitely proved to be invalid. That chart shows steady 280-300ppm CO2 levels. Put that together with the modern CO2 Mauna Loa increases in CO2 seems to prove that man has indeed increased the level of CO2 in the atmosphere. However in the last 70 years any warming that has occurred has been extremely small according to the satellite data and non existant if you only include rural area surface temperatures. So yes man is putting 9 billion tons of CO2 in the atmosphere every year via production of 36 billion tons yearly of CO2 produced from burning fossil fuels….etc This results in a net increase of 4 billion tons of CO2 in the atmosphere which amounts to a net increase per year of less than 2 ppm by volume. If you go to the NASA Goddard site for the CO2 cycle you will see that the total atmosphere content of CO2 is 800 billion tons. The input per year from all sources is 219 billion tons. The output is 215 which gives you the net addition per year as stated above of 4 billion tons. That means that there is 215/800 = 27% turnover. That means that after 7 years there is only about 10 % of the original CO2 remaining . The math is a one input one output Taylor series series with @ = .27 You can read what the IPCC says about this here
http://www.ipcc.ch/pdf/assessment-report/ar5/wg1/WG1AR5_Chapter06_FINAL.pdf
They say
“Based
on the amount of CO2 remaining in the atmosphere after a pulse of emissions (data from Joos et al. 2013) and on the magnitude of the
historical and future emissions for each RCP scenario, we assessed that about 15 to 40% of CO2 emitted until 2100 will remain in the
atmosphere longer than 1000 years. ”
This is absolute nonsense. Once the CO2 gets back into the ocean or ground it is no longer human CO2. The ground or ocean doesnt know the difference.
It shows that they dont bother to go to basic math to figure this out. They just ask the models who apparently havent passed their grade 8 algebra exam. There have been over 80 scientific studies that have given it a maximum of 10 years .
So the IPCC is wrong about the amount of time that a CO2 molecule can stay in the atmosphere. This is critical because it speaks to the turning point disaster problem. If we ever would see that the temp was going crazy we could always cut back on worldwide CO2 production and within 7 years there would only be 10% of the man made CO2 left. Since mankind only puts 1% of the CO2 total every year then even after 7 years of no CO2 produced then there would be only a 7% reduction but since only 1/2 % stays in the atmosphere as an increase then there could be very possibly only a 3.5% decrease after that 7 year period. The kicker is that we couldnt cut back to 0 CO2 emmissions so we would need a longer time period to decrease our CO2 emmissions. However we of course wouldnt wait until temperatures went crazy. We would act sooner. However alarmists like you say we must act now when we havent seen any evidence of warming throughout the 68 year period of massive CO2 emissions. If and when we do I will start believing in global warming. UNTIL THEN IT IS JUST A HOAX. It is a hoax on over 100 levels. if you want I can list those 100 fatal flaws of the CO2 warming theory. I am sure most of the other posters could also. With Anthony’s permission we should have a running list of them easy to find on the website.
@Kristi
Yr; We all suffer..”
How to characterize Kristi’s little flip-quip?
-A tart, catty drive-by, lacking in substance or wit, but making up for its deficiencies, in that regard, through the sheer energy and purity of its jejeune snottiness?
-A trite, pretentious, leaden, hive-shrink-wannabe try for a put-down “zinger”, that rather only serves to illustrate the limitations of “Soviet Psychiatry” as a vehicle for good-comrade flim-flam and nastiness–outside of the confines of hive-bubble safe-spaces, that is?
-Yet another re-cycling of that hoary, dog-whistle bit of eco-booger agit-prop that seeks, through phrases like “climate denial movement”, to implant in impressionable, weak-minded individuals–your typical, brainwashed hive-bozo, in other words–the subliminal suggestion that there is a “reasonance” between “Holocaust denial” and not being a sucker for the Gaia-hustle’s hype, scare-mongering and general-purpose B. S.?
-All of the above?
We all suffer from a range of cognitive biases, but that’s one that is particularly problematic when it comes to any politicized topic where people have needs to choose true and false based on their party.
It touches you as much as me.
I’ve studied natural sciences, which makes me less gullible in terms of GM0 hate spiich, antiwax, wonderbatteries, angel therapies etc. But outside my professional life, I’m pretty much as Dunning-Krugerable as anyone. I have opinions on loads of things I don’t have experience. Those, even when I am an expert myself, are outside of my expertise and thus vulnerable to Dunning-Krugerism. My high IQ protects me on some stupid kinds of D-K, but what would protect from partisan behaviour?
Step back, Kristi, and think. What is your real expertise? If you want to talk about stuff outside that, you are prone to being Dunning-Krugered. And, to add an injury to the insult, experts are often forecasting wrong on stuff they’re experts on. So we’re not safe with our opinions.
By the way, when the universities write press releases on research, and it makes to newspapers, the press release appears slightly Dunning-Krugered, as if the author didn’t understand the paper at all. That’s the way they write to The Guardian. Or any newspaper. On any topic I really know anything about.
More often than not, when you say some science is absolute nonsense, there is a possibility of Dunning-Krugerism. In this case, I’m afraid the question is of semantics only. They’re not talking about ‘the’ CO2, but the ‘amount’ of CO2. Of course.
By the way, my opinion is their hands are in the blood of alarmism, so you can safely take that as an upper limit.
Poor, poor Kristi, she really does believe that since her professors allowed her to graduate, she actually is an expert in all things.
“Climate-change denial movement” — I do not know of anyone who denies climate change, let alone a formal movement of people who deny climate change.
What do you mean by “climate-change denial” ? … specifically ? , … who do YOU know who denies climate change ?
The problem of which you speak is NOT a problem in this real world that I live in. The problem is in your confused mind — first, because you seem to believe that there are people who “deny climate change”, and second, because you seem to believe that there is a formal movement of such people.
I do NOT deny climate change, for example. I DO question whether humans have any effect on climate change because of their contribution of fossil-fuel CO2 to the atmosphere. I do NOT believe that we do, but this does NOT make me a “climate-change denier”. Rather, it makes me an intelligent person asking pointed questions and asking for logical arguments based on observations in the real world.
“The bias was first experimentally observed by David Dunning and Justin Kruger of Cornell University in 1999”
I don’t know if Socrates was the first to experimentally observe cognitive bias but he was conducting an experiment in searching for a “wise man” and this experiment led him to the conclusion that:
“I am wiser than this man, for neither of us appears to know anything great and good; but he fancies he knows something, although he knows nothing; whereas I, as I do not know anything, so I do not fancy I do. In this trifling particular, then, I appear to be wiser than he, because I do not fancy I know what I do not know.”
Maybe Confucius conducted experiments that led him to the belief that:
“Real knowledge is to know the extent of one’s ignorance.”
The Bard, William Shakespeare also seemed to be aware that:
“The fool doth think he is wise, but the wise man knows himself to be a fool.”
Then there is the Dunning-Krueger Paradox. If it is true that ignorant people can’t know the extent of their ignorance (it takes an expert to know that), then when addressing criticisms of their study that it could just be regression toward the mean, they considered this problem but ultimately dismissed it and argued their findings did not represent any regression toward the mean. The problem is, neither David Dunning nor Justin Kruger are statisticians, both holding PhD’s in psychology. If they are right that ignorant people can’t know the extent of their ignorance what makes them so sure the effect isn’t regression towards the mean?
Hugs,
My area of expertise is ecology and evolution. I don’t know tons about how climate functions and what determines that, I’m just learning, but I do know something about the potential for climate change to affect ecosystems and their components. More important from the perspective of the debate here, I know something about the philosophy, methodology and practice of science. I don’t like seeing science abused through poor methods, or the spread of the idea that laymen are better at science than those who have been doing it for decades. There is little respect for expertise. Accusations of fraud abound, and no number of independent investigations will suffice to convince some people they are wrong.
I believe that most scientists have a great deal of professional integrity and are motivated far more to find the truth than by political agendas.
I’ve done a lot of reading about bias, cognitive error and manipulation. We are all prone to it, and the best we can do is learn to recognize it in ourselves and know how to identify ways others manipulate us. Then we can be on guard, and try to counteract the effects. I am more mindful now of the messages I get from others. I am not so good at seeing my own knee-jerk reactions, and the generalizations and assumptions I make until after the fact, but after the fact is a start.
I would rather build bridges and have good discussions than vilify others, but I’m not very good at it. I’m trying to be honest, I’m not asking for pity.
Mike is way off, doesn’t know anything about me. Nice illustration of bias!
Alan is, I’m afraid, wasting a lot of time. A bunch of numbers and an argument doesn’t do it for me. I need statistics, context, background literature. “Once the CO2 gets back into the ocean or ground it is no longer human CO2. The ground or ocean doesnt know the difference.” Neither does the atmosphere “know the difference.” But just because CO2 enters the ground or ocean doesn’t mean it doesn’t return to the atmosphere. Think of a maple leaf. It grows, fixes carbon, then falls off in the fall and over the next year or two is broken down, and the CO2 enters the atmosphere again. Is this where the difference lies, perhaps?
Hugs,
“By the way, when the universities write press releases on research, and it makes to newspapers, the press release appears slightly Dunning-Krugered, as if the author didn’t understand the paper at all. ”
Yes, it is a problem that science is not accurately reported, although I’m not sure it would usually fall under the category of Dunning-Kruger. More often it seems like plain carelessness, bias, and a desire to make headlines.
The rest of my comment is awaiting moderation.
Robert Kernodle –
You’re right, poor wording. I wish there were some term I could use that is acceptable and gets the point across. “Skeptics” doesn’t really fit the bill, IMO, but I guess that will have to do. “AGW skeptics”?
The thing is, some people do deny that there has been significant change in the last 200 years. Some people admit it, and believe people are mostly responsible but that it’s not a big deal. There is no united face of the “skeptics” but there is a political movement behind it to prevent policy reflecting AGW and its risks. Many also advocate scrapping funding for climate science. The other uniting factor seems to be a distrust of mainstream science, and THAT is my battle, not so much the policy one.
@ Kristi
Yr: “Mike is way off, …”
You don’t “know anything about me!”–see, Kristi, I can play that little game too. Otherwise, your crack is an unsupported, bold assertion and nothing more–or rather, I’ll let the reader consider your judgement of my earlier rejoinder and decide for themselves if I am off in any way, and, if so, to what degree.
Yr: “…doesn’t know anything about me.”
A second, unsupported, bold assertion (a curious claim, too, Kristi, given that you’ve spent a month or more salting your abundant comments on this blog with biographical detail) that manages to be, as well, both a non-sequitur and silly–what difference does it make if I know anything about you, Kristi?
Yr: “Nice illustration of bias!”
Yet another bold assertion, of the sort sure to score Pavlovian-reflex, cheap-shot debating points if delivered before an audience of good-comrade, Gaia-cult group-thinkers. But on this blog, Kristi, I think your over-confident, would-be, put-down “zinger” is, at best, a lackluster dud. But I could be wrong.
In other words, Kristi, your reply to my earlier comment is nothing more, IMHO, than sputtering, fuss-pot gibberish–lacking in panache and reflecting a really poor quality of thought. And not a good advertisement for the purported merits of “expertise”, I might add.
In that regard, Kristi, perhaps you, like moi, recoil from the “spectacle” of all those brazen-hypocrite, carbon-piggie scientists, jetting about the globe, attending one Gaia gab-fest after another (hive-swarm eco-conferences that could easily held as zero-carbon video-conferences, but never are), spewing, in the process, copious amounts of the very CO2 that those same hive-science worthies are convinced KILLS BABIES!!! and, much, much worse, KILLS POLAR BEARS!!! And, perhaps, Kristi, we both agree that that “spectacle” does not inspire much confidence in a general claim that climate scientists are models of “professional integrity” and disinterested truth-seeking. Though I would not go so far as to suggest that all climate scientists are goof-off, trough-seeking connoisseurs of perks, easy-streets, and gravy-trains, who have found in the Gaia-hustle a good gig.
Penultimately, Kristi, let me conjure up a little Einstein-wannabe thought experiment: Would the eminent climate scientists, that Kristi seems to vouch for, be more inclined TO LEAD FROM FRONT BY INSPIRING PERSONAL EXAMPLE IN MATTERS OF CARBON FOOT-PRINT REDUCTION!!!TO PRACTICE WHAT THEY PREACH!!! or more inclined to apply a lip-smackin’, lickspittle smooch to the backside of any number of greenwashed money-bags, while catching a schmooze-friendly hop on the instant backside owner’s private jet? I leave the actual conduct of the experiment to better minds than my own.
Some unsolicited, possibly patronizing advice, Kristi. You have an admirable scrappiness (I really like, for what that might be worth, how you keep steppin’ back in the ring), and an apparent “good heart”. That last quality, especially, depriving you of an aptitude for quality gibes, taunts, jejeune mockery, abusive sneers, Alinskyite ridicule, and the like–you need a real mean-streak (preferentially congenital) for that sort of thing (think Hotwhopper). So, again, for what it’s worth, I respectfully suggest you might want to just stick with what you do best–earnest, attractively self-critical, somewhat rambling, but good-natured, defenses of certain of the hive’s seemingly indefensible orthodoxies.
What “significant change” means here? Do you mean measurable? Practically significant?
Why should we bother?
“the spread of the idea that laymen are better at science than those who have been doing it for decades”
Laymen usually can see obvious contradictions, like the absurd idea that whenever a better average health outcome occurs, it’s caused by the vaccine, but whenever a worst health outcome occurs, “correlation is not causation”. Children are on average better at seeing that than adults I believe, due to lack of “higher education”.
The idea that only those who have been specially trained can do science is the usually pushed by those who know that their “science” can’t withstand scrutiny, so it must be protected from those who aren’t a member of the club.
@ Kristi
Yr: “Mike is way off…”
Maybe, or maybe not. I’ll leve it to the interested reader to peruse my earlier rejoinder to one of your earlier comments and judge for themselves if I’m “off”, and, if so, to what degree. In the meantime, I think you’ll appreciate I’m not ready, Kristi, to defer to your mere “say-so” in the matter.
Yr: “…doesn’t know anything about me.”
Curious claim since over the last month or more you’ve salted the frequent comments, you’ve posted to this blog, with abundant biographical detail–just look at your comments on this thread, for example. I may not know the “real you”, Kristi, but, at a minimum, the persona, you are employing on this blog, has been liberally exposed, by yourself, presumably to educate the public about yourself. So your fussy insistence that you remain shrouded in an air of mystery, is a little bit rich. But, of course, my comment doesn’t depend on my knowing you, anyway.
Yr: “Nice illustration of bias!”
Now we’re gettin’ down to business–a bona fide denunciation! Nothing personal, Kristi, but this last attempt of yours at a “killer” gibe is decidedly lack-luster and, to quote a famous American, “low-energy.” Good enough to score some Pavlovian-reflex, cheap-shot debating points, if delivered before an audience of Gaia-cultist, group-thinking good-comrades, perhaps, but not, I would suggest up to the standard needed to impress the larger audience you seem to be aiming for.
Indeed, thanks to the abundant insights you’ve provided into yourself through the many, many, slightly self-absorbed comments, that you’ve lodged with this blog, I would even boldly suggest that you lack an aptitude for put-down “zingers”, since you appear to be bereft of the requisite “mean-streak” for that sort of thing. Rather, scrappiness, earnestness, an apparent “good heart”, and an winning style of self-criticism are your strengths. A respectful suggestion–you might want to keep with your strengths.
s-t,
“Significant” was used loosely here to mean something like, variable but consistent departure from a background trend or mean; it’s really short for the qualifiers others use, such as “appreciable,” “measurable,” etc.
“Laymen usually can see obvious contradictions, like the absurd idea that whenever a better average health outcome occurs, it’s caused by the vaccine, but whenever a worst health outcome occurs, “correlation is not causation”. Children are on average better at seeing that than adults I believe, due to lack of “higher education”.”
Laymen may see obvious contradictions, but that doesn’t mean that scientists are blind to them, and what is apparently a paradox may have a completely reasonable answer if one looks for it. I don’t know anything about the vaccine debate except that it’s a shame so many were misinformed; it’s a public health issue and not just a personal choice.
Children are definitely different than adults in the way they take in their environment and systematically use reason in problem-solving, but this is different from understanding the philosophical underpinnings of the scientific method then applying them to one’s research.
In my experience, laymen too often make mistakes in their assertions because they think they can “do science” but don’t have the background (in methodology, dataset selection and use, knowledge of the theory and published research, etc.) to make what they do scientifically meaningful. Others admit that it’s “DIY science” or a layman’s estimate, but it’s still treated as true science by readers. There’s no real harm exploring science as long as everyone who sees it knows it’s not up to scientific quality standards and is no replacement for professional published and peer-reviewed science. This doesn’t mean people who do it aren’t knowledgeable, intelligent and expert in their own (related) fields, but that may come with its own baggage. For example. models are extensively used in engineering and weather forecasting, and I suspect one reason people in those fields are relatively common in skeptic circles is because of the way climate models are created and used, and their sources of uncertainty. That’s understandable, since the models are sometimes similar but of a different scale and level of complexity, include estimates and tuned parameters, are not very precise, have not been completely correct in their predictions, etc. However, when one is familiar with all the models, their strengths and weaknesses and level of agreement, one is in a much better position to judge to usefulness of specific model projections. I don’t claim to be in that position. For me it’s a matter of trust. I believe less in individual humans’ ability to resist bias than I do in the process of science, the attention good scientists give to the subject of bias and its mitigation, the ability of science to reveal problems, and the profession to fix them. I find no compelling reason not to trust mainstream science, and I do find compelling reason to distrust the skeptic rhetoric. There don’t really seem to be that many climate scientists who still maintain that AGW theory is wrong, though some don’t think it’s worth worrying about. Some, like Willie Soon, have earned my distrust through his actions, affiliations and assertions. Others I generally respect as scientists, but feel that they have become too involved in political lobbying and have spread unearned mistrust of mainstream science through suggestion and innuendo rather than verifiable statements.
Unless one is active in the field, it is very easy to underestimate the depth and quality of research that has been done, the past and current debates so necessary to science, the amount of data and range of evidence supporting AGW, reasons for data adjustments, systemic problems in the models and what is being done to address them, the ways in which models are evaluated, and the capacity of the models to make useful predictions. It’s also not easy to assess the importance of the various uncertainties in drawing conclusions from the models. For instance, some uncertainty is inevitable due to limited resolution and computer capacity, but this doesn’t mean the models are useless any more than a weather forecast is useless because it’s estimated probability of being correct is only 75%, Besides, there are other, regional models that have higher resolution and can sometimes complement and support the global ones.
There is much talk around here that none of the projections made in the IPCC has been right. Is this so? How far have they been off, and what was their certainty level to begin with?
There need be no truth to the statement for the idea that the models have been all wrong to linger, regardless of lack of evidence. This is the danger of propaganda, not just among skeptics but among alarmists.
Mike,
“I may not know the “real you”, Kristi, but, at a minimum, the persona, you are employing on this blog, has been liberally exposed, by yourself, presumably to educate the public about yourself.” No, you don’t know me and even my online persona is viewed through the filter of your expectations. The reason I talk about myself is to make me more a real person to others, not just an ideology, and to communicate the fact that I know my knowledge is limited and I make mistakes. I don’t desire to be an enemy, although that in some cases seems inevitable. I know I’m not diplomatic and can seem (and be) arrogant, and that bothers me. In a way I guess I’m generally apologizing for offending others when it wasn’t merited (you can take that as sincere or not, I can’t control that). On the other hand, I’m not going to stop calling things as I see them.
“… this last attempt of yours at a “killer” gibe is decidedly lack-luster” I’m not attempting to insult you, I’m just making an observation.
“I would even boldly suggest that you lack an aptitude for put-down “zingers”, since you appear to be bereft of the requisite “mean-streak” for that sort of thing.” This partly is the result of a conscious effort at control, not lack of ability.
“Rather, scrappiness, earnestness, an apparent “good heart”, and an winning style of self-criticism are your strengths.”
Thank you, I guess. I truly hope I come across that way. I want to have a good heart and try to be a good person. I fervently wish that Americans across the political and ideological spectrum could bridge the enormous gulfs that divide us and start conversing again. I want it for the health, stability and security of our nation. One reason I come here is to understand what conservatives want and value. I can see the points of view of skeptics, and I’m far more familiar with their ideologies than with alarmists’, which is a problem, and maybe that’s why I do a very poor job of bridging the gulf: I don’t understand all that skeptics are reacting to. (Sorry, self-absorption may be right – a characteristic of introverts – there’s no reason others would be interested in all this.)
I’ve laid bare some of me, but that still doesn’t mean you know me.
Banks start making company organizational dictates beyond finance and the company goes broke because of the additional expense, it the bank liable?
Donald, my (humble) guess is that banks don’t have to lend to anybody that they don’t want to. And companies aren’t forced to borrow from banks. So, I can’t imagine that there would be any liability.
Bernanke explained once that the great depression was really a double dip recession. By 1934, Roosevelt had gotten things pretty much on track. The banks, fearing a repeat of 1929, began raising interest rates in the hope of warding off risky investments. (kind of an economic natural selection process) As a result, the higher interest rates caused the economy to falter and the depression continued. Point being that banks can put their money where they want. Yours is a very interesting question which deserves a good answer. (i’m kind of putting my half a**ed answer out there to maybe start a discussion… ☺)
Right, Rob, but i mean in terms of risk. (if they see an investment that they consider risky, are they under any obligation to lend?)
The bankers plan to artificially increase the risk assessment for “brown” investments. Sounds positively racist.
By 1934 the worst of Roosevelt’s many mistakes had worked themselves through. FDR prolonged and deepened the problems with his misguided policies.
The economy recovered on it’s own. The only thing Roosevelt did was to slow the recovery with needless taxes and regulations.
Dear Rob Bradley,
Your quote was pluperfect, so I hope you don’t mind if I use it, but I will always attribute you.
“Socialist central planning for economics may be intellectually dead, but global climate planning is alive and well.”
Robert Bradley, Jr
Financial equal opportunity.
This sounds like an excellent opportunity for the American to grow like gang busters as more and more companies move here in order to escape these nuts.
Perhaps we would also experience an influx of highly educated and experienced individuals as they too seek to escape the clutches of these control Greeks.
Many years ago, Europe tried to commit suicide through conflict. Now some of these same nations try to commit suicide through ignorance and foolish decisions. On the world stage, Europe is becoming increasingly irrelevant.
Western Europe won’t be irrelevant when it goes Muslim. It will be a menace.
Buffet is being very simplistic here and he knows it. Net profits are what drives companies to be successful not annual business income. But the volume of business is attractive to new investors as it looks good on paper.
Did you know that Buffet says he doesn’t invest in a company that pays a dividend? Why? Because he says that reinvesting the money in the company improves the stock share price to future investors faster than if it paid a dividend. That’s one of the reasons he got so rich. He took BH and cancelled the dividends, made the stock price go up and that started the investors wanting to jump aboard which kept the stock price rising. All the while the huge amount of shares that he owned increased in value and increased his paper wealth without him investing any additional money. Smart guy but he didn’t give a hoot about anything but driving the stock price up for his benefit.
Sorry but thats nonsense. The dividends are his money so he invested his money. And dividends allow investors to diversify their investments and so reduce the overall risk of their portfolio. And investment only pays off if it pays off – just investing doesn’t create value.
Buffet stays rich largely by avoiding the errors most others make, not through some magic home-farm investment brilliance.
Phoenix44 April 14, 2018 at 1:37 am
“Sorry but thats nonsense. The dividends are his money so he invested his money. And dividends allow investors to diversify their investments and so reduce the overall risk of their portfolio. And investment only pays off if it pays off – just investing doesn’t create value.”
I don’t disagree with you about dividends and have dividend stocks in my portfolio. I was simply relating to what Buffet’s strategy was concerning a company paying out dividends or keeping that money within the company to raise the stock price. But this isn’t the first time someone cannot read what is actually written.
On a somewhat worrisome note, inflation here in the states jumped from 2.2% in february to 2.4% in march. Investors have been hypersensitive of late fearing dreaded fed action of raising interest rates. (and this won’t help matters much) This may be the first big test of Trump’s newly installed fed chair, Jerome Powell. How he handles things going forward may have a big impact on wall street and thus, the economy on the whole. i don’t envie that guy. (i’d prefer to be like his predecessor, leaving the party before the police show up… ☺)
The only way to slow down inflation is for the fed to print less money.
That means interest rates must go up.
That is the way it works.
Perhaps the central bankers should focus their concerns on the $1.5 quadrillion dollar derivatives tower.
Money is a prerequisite to indirect exchange, specialization, and division of labor. If the derivatives tower implodes, and what is masquerading as money vaporizes, indirect exchange, specialization, and division of labor disappear. It’s back to the age of barter. It’s back to the age of sticks and stones.
Hundreds of millions — if not billions — would perish.
Derivatives only go wrong if the underlying assets goes wrong. Subprime derivatives blew up because the subprime housing market blew up. Derivatives on their own cannot go wrong. And every derivative is two-sided – if somebody loses, somebody gains. They cannot crash the economy, only those who end up on the wrong side, and the whole economy has to go wrong BEFORE all the derivatives do.
There are unfortunately a lot of people who are convinced that anything that they don’t understand, must be a sc@m.
“What is the difference between a centrally planned Communist economy, and an economy where Central bankers punish businesses which defy their investment directives?”
Eric, do you really not know? Or is this simply another tactic to slander those who think differently from you?
“Our Overlords have spoken—stop you’re whinging.”
Is that not another fatal assumption?
Kristi, Eric does seem to know.
Here … from the longest-serving Federal Reserve Chairman:
“Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale. …
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
* * * * *
So there you have it from the horse’s mouth. All communist/socialist/welfare states must eliminate gold redeemability in order to facilitate deficit spending, that is, the confiscation of wealth — the hallmark of such regimes. Anyone who opposes this must be criminalized, and punished.
(It should be self-evident that central banks are installed in welfare states to facilitate deficit spending. Without a buyer of last resort, the welfare state’s junk bonds would have no market.)
That is one way of seeing it. But in fact, it is only middle class that is touched by this rule. The rich, really rich have means to remain so.
Real Estate is protected from inflation.
“Eric also ignores the fact that fascist societies are centrally planned.”
Hence “fascist” National Socialism was so named.
Eric, do you really not know?
========
A rhetorical question is a question that you ask without expecting an answer. The question might be one that does not have an answer. It might also be one that has an obvious answer but you have asked the question to make a point, to persuade or for literary effect.
Yes, of course – thus the second question. I was pointing out that it was an argument itself, as assertion in the form of a question, and which therefore needs no evidence. It is suggestion, a way of persuasion – and, because it spreads a false, insulting image, it’s a form of propaganda.
[? .mod]
There were no economies in pre-history.
So what is the difference? I can tell you what to invest in or prevent you investing in what I think you shouldn’t invest in, leaving…
Gimme a break.
Paleocommunities were not communist. Communism as an ideology is not that old; and communists never ever tried to return to paleoeconomy of hunters and gatherers.
If you want, you could call all central planning-big statism as communism. But it is not very accurate.
In other words, Kristi doesn’t know either.
Jeez, lots of people are putting lots of words in lots of other people’s mouths in this thread. Can In join in?
Eric well knows that my posts shall never be routed to the moderated bucket. And he apologizes to me for all the times they did.
The IMF knows they need to kowtow to EU leaders and bureaucrats, to continue the flow of money in, know that the US is beginning to deprecate it’s UN involvement. So they’re willing to throw them a frickin’ bone on the climate change thingy.
Warren Buffett knows the value of a dollar (for now) and also that he would like to endow me with a few lousy million dollars when he passes. And so he instructs his lawyers to make the new will
Kristi knows she’s a fabulous irritant, far surpassing Griff in drawing responses. She also knows full well that she IS Griff on the weekends.
FredBerple knows whatever a spider knows (H/T Homer Simpson).
Okay, all done. That was fun. Next week I post a accuracy assessment of how well my “knows” knew.
If everything is owned by the government, then by definition everything is centrally planned.
As always, Rob demonstrates that what he knows is not true.
If you don’t believe that primitive societies didn’t have private property, then you know nothing about people, or primitive societies.
I see Rob knows nothing about Fascism beyond “it’s bad”.
Fascism, by definition was government control of all the major industries. That’s central planning my dear troll.
“If you don’t believe that primitive societies didn’t have private property, then you know nothing about people, or primitive societies.”
Don’t forget that many of the early anthropology texts were written by communists or their fellow-travellers, who were desperate to convince people that primitive life was communal and utopian.
Some people still believe it.
The Keynesian global monetary consensus was really the first global modeled junk science system. Forcing the end of gold and other hard money systems with a promise the ever expanding credit and inflation will stabilize production and demand. A fetish for permanent war economy. Another Orwellian prediction come true.
Government controlled “experts” overriding any individual right, sovereignty or dissent for the “common good”. Any predictive short coming or policy disaster (2008″financial crisis”) a perfect example of scapegoating abstract “greed” and “markets” as to deflect from the root failure of central planning excesses of the ruling establishment.
Sounds just like the climate belief system. The definitive authority which all other globalist consensus enforcers model their designs and squash and dissent.
There were as many, if not more wars when the world was on the gold standard as there have been since the gold standard was abandoned.
The financial imbalances of those wars and empire costs (massive debts) were incompatible with gold which is why the standard was abandoned. It wasn’t “progress” but decline yet those who rule today say otherwise.
Fiat credit economics, maximizing short term productivity, is the wartime rationale but the increasing social deterioration is directly related linked to the policy. As is the decline in freedom and reasoning, those virtues are being sacrificed for the globalist promises of stability including imagined financial progress. So record material production came with the system of record credit burdens not possible under fixed units of exchange.
Human nature never changes but the central planning state (including fiat currency management and carbon rationing excuses, climate change) makes the world worse for the maximum number of people and sucks the most out of future expectations. This is a pessimistic world view and by its imbalances unsustainable. Climate and central banking are part of the disease not the cure.
There have been wars since mankind first figured out how to pick up a rock.
There have been kingdoms that been ruined by the costs of war since there have been kings.
Dropping the gold standard is a very recent development, and the number and ferocity of wars has not changed before and after.
So now we have NGES, or “Network for Greening the Financial System. Organized by an association of eight central banks f the world, they no doubt visualize profit in this enterprise. As far as knowing about climatic profits such high-level bankers are as ignorant as you and I. They must depend upon the global warming movement to predict the future they visualize. Which means dependence upon such organizations as ICPP to predict the upcoming climate change they think they will profit by. And unfortunately, their predictions have been wrong, starting with Hansen who set the ball rolling in 1988. They were wrong in the twentieth century and are still wrong. I have suggested shutting down the supercomputer project of climate prediction, but no one wants to even mention it. Here is an actual observation of climate change that is accepted now: During the entire twentieth century global temperature increased by 0.8 degrees Celsius. You can’t feel it and one wonders how they measured it. it. But nevertheless, climate scare stories were abundant during the twentieth century and still are. Compare this to manifold predictions of warming ten times higher than predicted. Or take tha sea rise from melting ice. Al Gore predicted a sea rise of twenty feet by the end of this century. Hetean got a Nobel Prize for that. I see at most ten inches, not twenty feet. I pointed this out to both Nature and to Science, two premium science journals, and was completely ignored. Obviously science reporting itself has become corrupt and official channels that these bankers have to rely upon can no longer be believed.
“What is the difference between a centrally planned Communist economy, and an economy where Central bankers punish businesses which defy their investment directives?”
It’s the difference between communism and fascism. Fascism has the government directing private businesses, choosing favorites (any say Volkswagen) and killing off the disobedient — sometimes literally.
Or maybe it’s the difference between communism and business practices with a concern for ethics.
Warren Buffet’s remark is only relevant in light of a paragraph that Eric didn’t include in his excerpt of the Bloomberg article:
“The clearest example concerns the regulation of insurers: Climate change has made extreme weather events such as hurricanes more frequent [dubious claim!]. Regulators must ensure that the industry updates its models and sets aside enough capital to deal with these growing climate-related risks.”
Buffet suggests increased premiums will take care of the problem. But whose premiums? Will the insurance on flood-prone properties become so high that people are unable to afford it, and real estate will take a beating? Or will premiums go up across the board, so that those in low-risk areas are paying for those in high-risk ones? In the case of large disasters, it’s the insurers of the insurers who have to pay. What if they default? I don’t think Buffet’s analogy to car insurance is relevant, since it is based on the rate of inflation, and there is little potential for disastrous car accidents that affect millions of people. It’s not just hurricanes, it’s droughts, fires, landslides, and floods that can be disastrous – climate extremes and their effects, in other words. Increased intensity of precipitation and drought events have already been documented.
Kristi, the bankers were suggesting the insurance industry itself was at risk. Buffett’s analysis demolishes that claim.
Before shifting ground and claiming that maybe its the people paying for insurance who will suffer (Buffett supports this as a possibility), perhaps you might want to pause and consider that climate alarmist bankers are persisting with the shaky fiction that insurance companies themselves are at risk. Why would they do this?
Perhaps the claim that insurance companies will suffer if climate change causes more extreme weather isn’t the only fiction being perpetrated by climate alarmists.
Garbage. One event a year affecting a million people is no different to a million events a year affecting one person. And weather losses track GDP, which is similar to what Buffet says is “inflation” (its not its the increase in value of our assets). That means we are perfectly capable of paying for them.
Insurance is simply a way of allocating and diversifying risk, not a way if paying for losses via magic.
If you don’t understand the thing at all, don’t pontificate.
On performance over the last 30 years, big green alarmism had to cuddle up to big insurers because of the capacity of insurers to amass large sums for investment. The green parasites encouraged the insurers to say that they will decline to lend to, or approve of, those producers of ‘brown’ that the greens dislike. The investment market is limited, not open ended, so the earliest of the investment insurers to drink the kool-aid, either by act or by acting, have had the first chance to prosper from this mechanism of gaining more business from the sector of miscellaneous companies who themselves have gone to green fairy land.
It is easily analysed as incestuous, shallow and designed by money-greedy people who are rather naive. Typical bankers, one might say.
I don’t care much how they pervert business ethics so long as I can keep uncontaminated. That is becoming harder as more and more acts and regs specify compulsory insurance for what used to be normal, common activities. The choice of being personally risk averse or not is narrowing now, under compulsion of laws created by the increasing army of those who think it OK to pass their days being paid to tell other people what they must do, so they can be exploited for a lower cost of business and hence more profitably.
It is another theme in the symphony of the march of the coercive utopians. Geoff
I love it how our fascists decide that they have the moral authority to force others to live by their own peculiar “ethical standards”.
Even worse, they get offended when others object to their fascism.
“Increased intensity of precipitation and drought events have already been documented.”
Sorry Kristi, you’ll have to provide a reference for that assertion. And I’m calling BS on it, as there is ample evidence presented here and elsewhere that such is not the case.
WBWilson,
https://www.epa.gov/climate-indicators/climate-change-indicators-heavy-precipitation
“There is a direct influence of global warming on precipitation. Increased heating leads
to greater evaporation and thus surface drying, thereby increasing the intensity and duration of drought. However, the water holding capacity of air increases by about 7% per 1°C warming, which leads to increased water vapor in the atmosphere. Hence, storms, whether individual thunderstorms, extratropical rain or snow storms, or tropical cyclones, supplied with increased moisture, produce more intense precipitation events. Such events are observed to be widely occurring, even where total precipitation is decreasing:”
http://www.int-res.com/articles/cr_oa/c047p123.pdf
http://glisa.umich.edu/climate/extreme-precipitation
I don’t have time to find more data about drought. I know I read something recently, but couldn’t find it.
Eric,
I brought up those who pay premiums because Buffet discussed premiums, and I thought it relevant to the big picture. Is there no room for ethical considerations in policy decisions? I’m a capitalist, but the problem with free market capitalism, as with other economic ideologies, is that markets don’t have morals, only people do. Markets don’t feel a responsibility to society, only people do. If ethical considerations are to be made, they should come from the top, covering the whole industry, so that competition remains even.
Any ideology when taken to extremes, without a view to the good of society as a whole, can lead to injustice and suffering. Freedom must be linked to responsibility, or it becomes anarchy.
Buffet “demolishes that claim” because he doesn’t believe global warming carries great risk, and even if he did he would downplay that because this is a letter to shareholders, is it not? (Oh, yes, I guessed right!) It’s the same kind of thing Exxon did that its shareholders voted to rectify: it kept them in the dark regarding the potential financial impacts of climate change on corporate profits.
Buffet is not a climate scientist, and he could be wrong about the risk the insurance industry faces, so he in no way has “demolished the claim” that insurers could be at risk or that “Regulators must ensure that the industry updates its models and sets aside enough capital to deal with these growing climate-related risks.” This is about preventing global market instability.
Why is the insurance industry so concerned about climate change? Maybe because,
“A recent industry study found that last year there were 750 major “loss events” like earthquakes, storms, and heat waves, well above the 10-year annual average of 590. Analytics firm CoreLogic has found that 6.9 million homes along the Atlantic and Gulf coasts are at risk of damage from hurricane storm surge that could cost more than $1.5 trillion.”
http://fortune.com/2017/07/25/climate-change-insurance-industry/
…………………………………..
“Issue: Disclosure of climate risk is important because of the potential impact climate change can have on insurer solvency and the availability and affordability of insurance across all major categories. Munich Re found that weather related losses have increased nearly fourfold in the United States since 1980. According to a study by Munich Re, extreme weather events (such as prolonged droughts, hurricanes, floods, and severe storms) led to $560 billion in insured losses from 1980 to 2015. Experts predict climate change will continue to intensify the frequency and severity of these types of weather related events.”
http://www.naic.org/cipr_topics/topic_climate_risk_disclosure.htm
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“The report, “Climate Change and the Insurance Industry: Taking Action as Risk Managers and Investors,” is based on interviews with 62 C-level executives at insurance and reinsurance companies.
According to Anna Maria D’Hulster, secretary general of The Geneva Association, the study confirms “that climate change is a topic that has made its way up to the boardrooms of the insurance industry.”
She noted that participants reported on initiatives being undertaken in three aspects of the industry: the liability side, where the industry offers risk transfer solutions that address the financial consequences of climate change; the investment side, where insurers increasingly integrate climate change considerations into their strategies; and the operational side, where companies are reducing their carbon footprint…
The Geneva Association is putting forward three recommendations to accelerate the contributions of the industry to address climate change:
– Third-party stakeholders such as governments, policymakers, standard-setting bodies and regulators across sectors should work in a more coordinated fashion to address barriers that hinder insurers from scaling up their contribution to climate adaptation and mitigation.
– The insurance industry should continue to institutionalize climate change as a core business issue, expand its contributions towards building financial resilience to climate risks and support the transition to a low-carbon economy by collaborating with governments and other stakeholders.
– Governments and the industry should explore ways to support climate resilient and decarbonized critical infrastructure through the industry’s risk management, underwriting and investment functions.”
https://www.insurancejournal.com/news/national/2018/01/25/478540.htm
“The insurance industry should continue to institutionalize”
“institutionalize” is the key word here. These people should be institutionalized.
“decarbonized critical infrastructure”
Critical infrastructure needs to be oil based. Oil can be stored securely at a local level. You can attack one oil tank, you can’t destroy all oil tanks.
Other sources of useful energy are much more difficult to store; methane cannot be stored locally at all in significant quantity except if you happen to live on a natural reservoir that has been emptied.
Nuclear power has a gigantic per unit cost right now, that means small reactors are too costly (that may change soon). Even then, it isn’t adapted for very local production. Long power lines are vulnerable.
Solar panels are obviously extremely exposed to “extreme weather”, so are wind turbines.
https://youtu.be/1AAHJs-j3uw
Let me see if I have this right. The mere fact that we are having more earthquakes now compared to the most recent 10 years, is proof that climate change is going to kill us.
If government is directing private businesses then those businesses are not private.
In the USSR the obedient and the disobedient were executed.
“if a bank loan to a company which produces renewable energy is given a lower risk weight than now just because it is “green,” then supervisors would be giving banks the wrong incentive to load up on such assets.” Followed by, “But the French central banker said he would be in favor of giving higher risk weights to “brown assets,””
Doesn’t that mean that discouraging investment in “brown assets” will shift the limited capital into “green assets,” which is exactly that same result as lowering the risk weight of “green assets?” That is, “…giving banks the wrong incentive to load up on such assets.”
If you replace something with ideology, you REPLACE it. As in if you replace actuaries with ideologues, you LOSE actuarial skill. When the banks do enough damage to their ability to assess risk, they will bleed money very quickly, and then they will fail.
This will not be good for anyone, even if they think it will.
I kind of worry this is a follow-on to Cloward-Piven (overload the government with social demands until it fails so you can replace it with your imaginary utopia)..
There’s a reason central banking was one of the ten planks of the Communist Manifesto.
Mussolini described fascism as the combination of big government and big business.
Now, big banks can be added to the definition.
so that companies are forced to provide a snapshot of their climate-related risks.
It would be absolutely hilarious if they did. Dear Mr Banker, we’ve consulted the very latest science as published by the United Nations IPCC AR5 and it says that population, income, lifestyle, aging, technology, energy prices and other things will be much larger effects on our industry than climate change so we’re not particularly worried.
https://wattsupwiththat.com/2016/01/01/we-have-bigger-problems-than-climate-change-so-sayeth-ipcc-ar5/
How soon to AR15?
For any young’ins out there, remember this, the true “currency” of communism and fascism is not spent money but spent human lives. Free markets require humans to be alive; communism and fascism require fewer humans to make control easier.
This is merely how to put into practice something already decided. Carney the BoE governor chaired a BIS committee to decide how to instruct CBs and then commercial banks on the RoR and risk criteria for investments and expenditure. These were specifically related to impact EVERY decision , related or not to climate change.
Its now baked into the global financial system.
This is what this is all about, finding ways to reward global investments without risk. The risk is covered by the tax payers in each nation.
Unless there is an overthrow of the global financial system, its done.
Dear Eric, thanks for the information.
What I think what we are seeing is a kind of „Galileo“ effect. When Galileo presented his findings to the church astronomers, there where two main responses; the first was grouped around the notion, „looking through the telescope we see the moons circling Jupiter, but this cannot be trough because it conflicts with our belief that the earth is the center of the universe. Therefore we reject what we see“. The second group was centered around the rejection of looking through the telescope, because it was a devil‘s tool and therefore could not be believed in“.
The central bankers may know what Buffet observed but neglect it because of a conflicting believe „global warming is true, therefore conflicting evidence is missing something“.
The bankers involved are not stupid but BELIEVES trumps REALITY.
This is in my mind the greatest enemy we face today!
And thus while the skeptics have mostly proven their points about the falsity of CO2 human caused catastrophe, the Golden Rule (those with gold, rule) lives on and on. And the money just continues to be siphoned off to line the coffers of the usual Left groups. How many times have you read/heard that the CO2 alarmist theories are dead? This shows the power of propaganda on a scale most never have imagined. More profound than the Solar Cycles and the great Spots Debate.
The biggest financial risks for “brown” companies are regulation and exorbitant energy prices. For “green” companies the greatest risk is that the subsidies will go a away. These are politically driven risks. Are companies now going to have to disclose that Leftist governments will have a negative impact on their bottom line?
Good discussion.
A key factor that hasn’t been addressed is one of the major pillars of the #EXXONKNEW shakedown. The government has almost unlimited authority to impose truly bone-headed (Think DDT) industry-killing regulations based on it’s own “science.” The banks must evaluate the likelihood of CCS, or even reparation payouts to state governments for a proper risk analysis. Even the Supreme Court recognized its incompetence in reviewing questions of science, and did not kill the Clean Power Plan on sight.
It’s no wonder that Scott Pruitt is so hated by the statists!
What makes a company profitable is your percentage of profit, not the total volume of profit.
Yes, inflation has increased the total amount of profit your company is making. At the same time that same inflation is decreasing the value of the profit that you are making.
End result, no change.
Under communal-ism, government works to move private economic decisions into the sphere of government control via communal control like “people’s committees” composed of people chosen by the Party. The ownership of business and business assets is held in the name of the State or State “enterprises.”.
Under fascism, government works to move private economic decisions into the sphere of government via directives about business conduct from state bureaucracies.
In short, under communal-ism, the State owns the cow. The farmer lives at a worker’s cooperative, takes his meals at the cooperative, sleeps in his bed at the cooperative and carries out the directives of the cooperative about the cow. When he sells the cow, he only does so for a price that the state sets and the money goes back to the state.
Under fascism, the farmer owns the cow, the farm and the barn. But the state tells him when to sell the cow, where he should sell it and how much he is to be paid for it. Any unfair profits from the sale of the cow are heavily taxed. Any losses are the farmer’s to pay for out of his pocket.
Now all the above is enforced by men in suits who regularly visit the farmer and inform him of the wishes of the State. Should the farmer decline to follow their orders, they can send men with guns to arrest him.
When central bankers want to intrude into an area of the economy, they don’t need men with guns. They can just seize any money belonging to the farmer at whatever bank he must use. They don’t need men with guns because the bank is fully compliant with any order the central bank issues.
The economic historian Ludwig von Mises called both communal-ism and fascism forms of “interventionism”, where government seizes private economic decisions via rules, regulation, coercion and compulsion. The results are all the same: when the free market is destroyed, the real price of real components of the real dynamic economy can no longer be known by any participant. When prices cannot be known, it becomes impossible to know if any economic activity produces a profit or a loss. At that point, the economy as a whole becomes “unsustainable”, a concept that the left loves to scold the rest of us about.
This is how we get Venezuela, a country with more oil than Saudi Arabia, declining to the point that it cannot pay for imports of food nor medicine.
First they took the guy down the street. Next the guy at the end of the block. Now, they are knocking on my door! Nothing has changed. The same people are still with us. They ran the inquisitions, the Communist purges in in Russia, the NAZI propaganda machine, the Red Guard purges and, now, they are people pushing man-made climate change. Evil never goes away! Good people simply wait too long to stop them.
Citibank and Bank of America both have already announced they will decline to loan money to gun makers of “military style firearms for civilian use.”
If they did this on their own, then such stupidity is their right.
All they are doing is abandoning a profitable industry. Their competitors thank them.
Banks have always taken risks and probabilities into account when lending money. They will at the present day already be taking into account their perceived risks arising from climate change. What seems to be being asked for now is a change in in investment policies so as to steer investments into ‘green climate-change’ projects and away from projects perceived as non-green. I am not too concerned.
Some banks might even make this change of their own volition, but all of them? Never. For example, while Chinese banks might steer money into projects which reduce local air pollution I can’t see them using their clout to try and reverse politically perceived climate change. Nor will India, Africa or banks in many other parts of the world.
“What is the difference between a centrally planned Communist economy, and an economy where Central bankers punish businesses which defy their investment directives?”
Best lead-in ever!
Here’s what we do. We support President Trump and Congress in lifting the regulations on the small banks and Credit Unions, which the big banks incurred and then use to destroy competition. After all, it was not the small banks that caused the Crisis of 2008.
Genuine, competitive banking services owned by Americans and serving Americans is a possible relief, so customers can go about their business.
ref: “While the bill from Sen. Mike Crapo (R-Idaho) is focused on exempting dozens of banks from stricter federal oversight, it also rolls back restrictions on lending across the financial sector. The Senate is expected to vote on the bill within the next two weeks.
NAFCU President Dan Berger attended the meeting with a group of member CEOs. The group had been seeking a meeting with the president for months.
Berger said the 30-minute meeting was generally focused on “the landscape in terms of financial regulations.”
“He’ll be supportive of any relief that could be provided to us,” Berger said of Trump.
Berger also said Trump briefly mentioned that he’s weeding through potential nominees for Consumer Financial Protection Bureau director. He said a timeline wasn’t discussed.
CUNA President Jim Nussle said before the meeting that he and five member CEOs would tell “President Trump that the country’s credit unions support this bill because it gives them a fighting chance against big banks, unburdens them from regulations written for Wall Street.””
the hill com
BANK GUN CONTROL
Citigroup is setting restrictions on the sale of firearms by its business customers, making it the first Wall Street bank to take a stance in the divisive nationwide gun control debate.
The new policy, announced Thursday, prohibits the sale of firearms to customers who have not passed a background check or who are younger than 21. It also bars the sale of bump stocks and high-capacity magazines. It would apply to clients who offer credit cards backed by Citigroup or borrow money, use banking services or raise capital through the company.
The rules, which the company described as “common-sense measures,” echo similar restrictions established by some major retailers, like Walmart. But they also represent the boldest such move to emerge from the banking sector.
https://www.nytimes.com/2018/03/22/business/citigroup-gun-control-policy.html
The underground economy works well on a cash basis. Very profitable.
The background check rule has been in force for several rules. Fill out Form 4473, wait for the answer – it usually takes no more than a couple of days. If Citigroup doesn’t want my money in the form of exorbitantly high interest rates, that’s fine by me. And people who sell guns, such as shop owners, are always happy to take cash.
Someone mentioned cryptocurrencies. This is a burgeoning industry that banks can’t fight at all. I thought it was a joke but it is not. It may become the means of getting past companies like Citigroup and their control freak behavior.
Citibank isn’t the only bank either. If they want to pass up profit, there will always be someone else who won’t.
Every one of the things that Citibank has just “banned” are already illegal.
I have the solution if any are willing to listen!
To mitigate ANY loses due to global warming, Farm Greenland when it melts like Vikings did when it was warmer.
Citibank is attempting to usurp the unalienable rights guaranteed by the USA Constitution. Let your Congressional representatives know you want this stopped. Some representatives are already examining ways to remove government contracts from Citibank.
http://www.breitbart.com/big-government/2018/04/13/rep-todd-rokita-sends-letter-end-citibanks-contract-because-anti-gun-policies/
Comment sent at 12:28pm pacific time just ‘disappeared’ into the wordpress ethers….
Mine too at 12:24 EDT.
The underground economy works well on a cash basis.
Let your Congressional representatives know you want this stopped.
Bet dollars to doughnuts that one can find the hands of central ‘bankers’ in the demise of rural America.