Woke won’t survive economic rationalism. That is, reality. When push comes to shove, woke will be shoved aside as keeping the heating on will be paramount. Sooner the better.
I think we’ve heard more than enough from leading modellers
This person is giving leading modellers a bad name.
Market failure?
Oh dear. The Australian Energy Market Operator has suspended the market. The Operator says the market was “impossible to operate”. Does this constitute a market failure? It’s definitely a failure of something.
I say it’s not a market failure. That’s because it’s not a real market. The authoritarian left often decries market failure as reason for Government intervention in all manner of ways. Well, here’s an example of a highly restricted and distorted pseudo market failure right in front of our eyes at a time when the energy supply is tottering on the verge of blackouts.
The reason for this failure is precisely due to years of Government intervention, mismanagement and lies. Goodness knows what happens from here, but mark June 2022 as the month in which the creaking facade masquerading as an energy system in Australia crumbled.
Energy production in Australia
Update from 17 June, 5:30 pm AEST: coal and gas are currently producing 78% of Australia’s electricity supply.
We need more renewables, obviously. Look at the contribution to Australia’s energy supply over the last 48 hours. After decades of subsidies to promote windmills, solar panels, hydro schemes and biofuels, the total output of renewable sources is woefully tiny. Not enough subsidies, I expect.
Stock markets
Price inflation data for May 2022 was released yesterday in the US. Over the full year to end May, the consumer price index increased by 8.6%. The AFR reports that this is the highest 1 year increase in 40 years. The stock markets reacted badly. The Dow Jones industrial average lost 2.7% and the NASDAQ lost 3.5% in value.
That stocks have been broadly overvalued is well accepted. Part of the reason supporting high valuations was low discount rates. A year ago, the average P/E ratio on stocks in the S&P500 was over 37. Today, it is 21.5. That reduction will have been largely driven by recent market sell offs and revaluations with higher discount rates as yields on debt markets increase. But 21 still looks expensive. I’m not sure I want to pay $21 to buy a future earnings stream of $1pa. With the high likelihood of further increases in discount rates plus risks to underlying earnings owing to economic malaise, the P/E ratios are under pressure both on the top line and bottom line.
I’d expect there is more red ink to come.
Alarming news from the UN
Oh wait, that’s old. 33 years and counting.
It must be rather gloomy working at the UN.
Give the customers what they want
The best way to succeed in business is to give the customers what they want. This announcement from Rio Tinto clearly pleases one campaigner from the Conservation Foundation, but I’d be surprised if she is a Rio customer.
Rio customers looking for a supply of aluminium that is high quality, reliable and low cost are unlikely to be pleased with the outcome of this decision.
It’s not about the virus
I can’t imagine that there is anybody left, anywhere in the world, who still believes zero COVID by lockdown, mass testing, contact tracing and so forth is possible.
Consequently, this latest action from the Chinese Communist Party cannot have anything to do with a pandemic response. It’s not about the virus. It’s much more likely to be about maintaining power and crushing dissent. The virus is just the excuse.
US excess mortality
Further to the non COVID excess mortality data in Australia that I assessed at this post, data from the US is well established in a similar vein.
How multiple decrements and standard deviations affect Australia’s senior citizens
The ABS most recent publication on Australian mortality experience was released towards the end of May, with the rather noteworthy key point that for the first two months of 2022, all cause mortality is up over 20% compared to normal, Figure 1.
When it comes to vital statistics of mortality, departures of this magnitude are rare, indeed. This represents about two standard deviations (more on that below) over the baseline, which was measured over the seven calendar years to 2021 inclusive. So, I obtained the full set of data from the ABS website to review the results in more detail, given the data are broken down by state, age group, cause of death and by both sexes.
Australian Actuary 