18 March 2021

1) Griddy Energy, the Texas power retailer, filed for bankruptcy, becoming the latest casualty of the cold weather blast and sweeping blackouts that pushed electricity prices to historic highs. The company, after its customers received exorbitant power bills, blamed its downfall on Texas’s grid operator Ercot who is blamed for destroying Griddy’s business. Griddy is at least the third to file for bankruptcy. Ercot owes more than $29 million dollars, making the grid operator Texas’ largest unsecured creditor. Texas is unusual in the U.S. in that homeowners and businesses can choose from a number of power providers. Griddy charges wholesale prices instead of fixed ones, and knowing that rate structure would mean massive bills for its customers as power prices climbed, the company made the unusual move of pleading with customers to switch to another provider in mid-February, but some customers who didn’t switch in time were stuck with bills for thousands of dollars.

2) The world’s three biggest consumers of coal, the most dirty of the fossil fuels, are getting ready to boost usage so much that it’ll almost be as if the pandemic-induced drop in emissions never happened. The U.S. power plants will consume 16% more coal this year, and then an additional 3% in 2022. China and India, which together account for almost two-thirds of coal demand, have no plans to cut back in the near term. This means higher emissions, and in the U.S., the gains may undermine President Biden’s push to reestablish America as an environmental leader and raise pressure for him to quickly implement his climate agenda. Coal consumption at U.S. power plants is almost returning to 2019 levels. While in recent years, China has reduced the share of coal in their energy mix, total power consumption has risen, so its usage has also climbed. China has the world’s largest number of coal-fired power plants, so it’ll be tough to shift to alternatives. India is also a very long way from a clean grid, with coal continuing to account for around 70% of its electrical generation. Consumption at their power plants will rise 10% this year, and is set to increase every year through at least 2027.

3) Although little known to most people, sand is another natural resource becoming scarce. So China has launched a crackdown on illegal sand mining operations on the Yangtze river, which have made large parts of central China more vulnerable to drought. Sand mining in the river and its connecting lakes and tributaries has also affected shipping routes and made it harder for authorities to control summer floods.

4) Stock market closings for – 17 MAR 21:

Dow 33,015.37 up by 189.42
Nasdaq 13,525.20 up by 53.64
S&P 500 3,974.12 up by 11.41

10 Year Yield: up at 1.64%

Oil: down at $64.63

19 August 2019

1) Home construction in America fell in July by 4.0%, in particular apartments. While a solid job market coupled with falling mortgage rates have boosted the desire to purchase new homes, the inventory shortage and rising prices have stifled sales. However, building permits issued have risen 8.4% with apartment complexes accounting for most of the increase.

2) Japan surpasses China as the largest foreign holder of American Treasury notes. Japan now holds $1.12 trillion dollars of Treasurys while China has $1.11 trillion dollars worth. Since the start of the trade war, China has bought less of the U.S. sovereign debt, with speculation that one tactic China could take in the trade war is to unload its holdings of U.S. debt. So far, there are no indications of China doing that.

3) The threat of fresh water shortages across the world is becoming more pronounced, with western America experiencing growing problems. The Colorado River, is a 1,450 mile source of water for seven states, who’s flow decreased 19% from 2000 to 2014. The river’s water is drawn off to supple cities and agriculture so almost nothing reaches the Pacific ocean. The bulk of the water is used by farmers producing a significant amount of America’s food, with almost 90% of the winter’s vegetables come from the river’s irrigation.

4) Stock market closings for – 16 AUG 19:

Dow             25,886.01    up    306.62
Nasdaq          7,895.99    up    129.38
S&P 500         2,888.68    up      41.08

10 Year Yield:    up   at    1.54%

Oil:    up   at    $54.94