Saturday, February 17, 2024

2024 Is Likely To Be Another Year With A High Level Of Hurricane Intensity

According to https://tropical.atmos.colostate.edu/Realtime/index.php?arch&loc=northatlantic, the accumulated cyclone energy of North Atlantic cyclones has been above 95 for each of the past 8 years (2016 thru 2023) and above 100 for 7 of the last 8 (2022 was the outlier with 95). Comparing this result to the previous 30 years, 14 out of the previous 30 years had accumulated energy below 95 (47%). I doubt many readers of this blog will be surprised by the fact that years with accumulated cyclone energy of North Atlantic hurricanes with high intensities are becoming more frequent.

I conducted this review because I speculated it highly likely that given the warmer ocean temperatures, that the Carribean Islands, Atlantic and Gulf of Mexco coastal communities are likely to be devastated by the next round of hurricanes following the flip of ENSO to La Nina.

However, when comparing accumulated energy years to El Nino and La Nina years, I found that while there is definitely a correlation, it is not as strong as I had expected to find https://ggweather.com/enso/oni.htm. While El Niño generally tends to suppress Atlantic hurricane activity, and La Niña tends to enhance it, an eyeball review of the results suggests that it does not appear to be highly predictive of whether there will be destructive hurricane activity in 2024. Thus, if there is a flip of the ENSO cycle from El Niño to La Niña, as some forecasters are predicting, it makes a devastating hurricane season more likely but not a certainty.

While coastal communities may not be as vulnerable to hurricanes in 2024 as I had supposed before starting this review, I fear that the warmer ocean temperatures will lead to more devastating Atlantic hurricanes in the not too distant future during both El Niño and La Niña years.

Sunday, January 14, 2024

Why Do The Gullible Folks In The Right Wing Echo Chamber Think That A Regional Winter Cold Snap Proves That Global Warming Is A Hoax?

We're in the midst of winter and much of the US is in the middle of a cold snap. Shocking, right? Yet, as typically happens during a regional cold snap the right wing echo chamber is filled with posts claiming that frigid weather during winter and rescheduled NFL games proves global warming to be a hoax. These claims ignore that the portion of the U.S. hit by this cold snap is a fraction of global surface area. Moreover, it is common for localized incursions of Arctic air masses to be compensated for by warmer-than-normal conditions in other areas of the mid-latitudes.Frankly, anyone that is paying attention should realize that weather is so variable that regional US cold temperature records are commonplace even while locations south of the equator are sizzling. For reference, from January 2020 through November 2022, 91% of 245 locations measured had more record heat than record cold

Here's a news flash, when the US suffers through what is likely to be the hottest summer in recorded history during 2024 with hot temperature records being set throughout the country, there will almost certainly be cold records set during the winter season south of the equator. However, it seems probable that globally the hot temperature records will be about 3 times as frequent as the cold termperature records.

If along the lines of climate science deniers, I was to cherry pick a variable data set to make an outrageous claim, it would be that sea level rise has gone parabolic. Check out the chart below. The increase in sea level between May 4 and September 29 is a bit frightening. If the 4.7 mm (0.36 inches) increase in sea level rise is extrapolated out to a full year, that's about 0.8 inches of sea level rise per year and over 8 inches per decade. Whoa, sunny day flooding is already becoming a problem. Eight more inches of sea level rise by 2034 would convert sunny day flooding from a major nuisance into a coastal real estate catastrophe. Even if there is another 0.8 inches of sea level rise in 2024, it will be a problem for low lying coastal cities such as Charleston.

However, a close review of the chart indicates that upward spikes occurred in 2011-2012 and 2014-2015 and were both followed by declines in sea level. Thus, reversion to the mean of about 1/8th inch of sea level rise per year seems at least as likely as a continued rise of 0.8 inch a year. 



In conclusion,  the right wing echo chamber is very effective at amplifying climate disinformation. They cherry pick data, utilize obscure data sources, and make a big deal of the wildest faulty predictions made by individual climate researchers which never obtained widescale acceptance. On the other hand, climate science researchers don't need to do any cherry picking as the results of a warming planet are abundant.

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Friday, December 22, 2023

Large US Treasury Bond Auctions May Be Good Gold and Silver Dip Buying Opportunities

The market is starting to choke on the massive size of US Treasury auctions. Auctions sizes are particularly large currently as Treasury refills its coffer after emptying most of the surplus during the close to the wire negotiations on the US debt limit. We're talking $500-600 billion in debt being auctioned off every week to pay off the expiring bonds that fund the soon to be $34 trillion debt, as well as to cover the monthly deficits. And with the US running $100-200 billion monthly deficits, that's an additional $25 billion or more in debt that needs to be raised every week.

On Wednesday demand for the 20 year bonds being auctioned off was underwhelming. So, interest rates went up, the US dollar index (DXY) responded by going higher, and that led the alogos to sell off gold and silver futures. The Wednesday dip in the price of gold and silver futures was reversed the next day.

In a more rational world, weak bond auctions would be a sign of trouble for the US dollar, and the prescious metal futures would go higher. And eventually, that will be the case. But for now, don't be surprised by dips in the price of gold and silver after weak US bond auctions. 

While there are no long term bond auctions scheduled for the rest of 2023, there will be a heavy schedule next month. But with the enormous funding requirements, Treasury auctions can not be completely shut down for the rest of December. There will be 5 and 7 year note auctions next week (12/27 and 12/28), but these auctions are much less likely to lead to fireworks than long term bond auctions

Tuesday, September 12, 2023

Climate Science Deniers Have Uncovered 1,600 Scientists Who Signed A There Is No Climate Emergency Declaration. That is 0.02% of the 8 Million Scientists In The World

Most people know someone that is brilliant yet has no common sense. Thus, the fact that climate science deniers are making a big deal about finding 1,600 scientists from random fields that have signed a declaration that "there is no climate emergency" is little more than fodder for their echo chamber. I'm pretty certain with a sufficient effort I could find 1,600 scientists to sign a declaration stating that "God (or the devil) placed dinosuar bones in the ground to test Christians' faith".

To deny that there is a climate emergency, these 1,600 scientists (0.02% of the total) have to overlook the following:

  1. Hurricanes and typhoons are growing in intensity at rates never experienced during the satellite era. They are becoming increasingly deadly (the climate science deniers talk about there not being a significant increase in the number of hurricanes, but there has never been a consensus among mainstream climate researchers in regard to frequency, only that intensity would increase).
  2. Deadly flooding is becoming increasingly common. A warmer atmosphere holds more moisture—about 7 percent more per 1.8°F (1°C) of warming—and a significant increase in atmospheric moisture is present due to the air holding more moisture as it warms.This added moisture powers heavy rainstorms becoming flooding events.
  3. Sea level is rising by 1/8th inch per year globally and by more in many locations. In the past 20 years, the rate of sunny-day flooding has doubled. Compared to 2000, it's increased 400% on the East Coast and 1,100% on the Gulf Coast. As an example, Charleston SC flooded about 1 out of every 5 days in 2019, and the sunny day flooding problem is worsening.
  4. Some areas of the Middle East are too hot for human survival without the aid of air conditioning, fans or shade. The limit is somewhere between 104 and 122 degrees Fahrenheit if you're sitting perfectly still, according to a study conducted in the United Kingdom. Other research focuses on wet bulb temperatures.
  5. The capability of the oceans to support seafood harvesting is diminishing. 

 A. Coral bleaching is occurring globally  For example, a recent paper shows that around 70% of reefs are now net erosional in the Florida Keys, meaning they are losing more habitat than they build. And the Great Barrier Reef has experienced mass bleaching events in 1998, 2002, 2016, 2017, 2020 and 2022. An estimated 25 percent of all marine life, including over 4,000 species of fish, are dependent on coral reefs at some point in their life cycle. The reefs provides essential food, shelter and the spawning grounds needed for their species’ survival. When their homes disappeared, the fishing industry becomes less productive. 

B. The acidity of the ocean has increased by 26% since the beginning of the industrial era. For oysters, scallops and other shellfish, lower pH means less carbonate, which they rely on to build their essential shells. As acidity increases, shells become thinner, growth slows down and death rates rise.The shellfish industry is experiencing higher mortality rates. Many shellfish farmers have had to add soda ash to their hatcheries to permit the seed clams, oysters and geoduck to thrive. 

Conclusion

The social conservative echo chamber is very effective at amplifying climate disinformation. They cherry pick data, utilize obscure data sources, and make a big deal of the wildest faulty predictions made by individual climate researchers which never obtained widescale acceptance. The amount of coverage of a declaration by 0.02% of scientists from an assortment of fields is a good example of how effective the social conserative echo chamber is at promoting their denial of climate science.


Thursday, August 17, 2023

Will Climate Change Suppress The Price of Tech Stocks Due to Crop Failures Keeping Food Costs and Inflation High?

In the financial markets, it seems stunning how nonchalant the vast majority of investors and commentators are to the risks to stocks and bonds from climate impacts. However the world's largest  investor, Norway's sovereign wealth fund, is cutting their tech exposure due to global warning.

For reference, Norway's sovereign wealth fund, the world's largest stock market investor with $1.4 trillion in assets under management,made a stunning profit of $143 billion for the first half of 2023, due to the growth of U.S tech companies (the AI craze).

But they are cutting back on tech exposure. Their CEO stated that global warming is lowering food harvests, and thus increasing food prices. The fund expects it will be difficult to reduce inflation worldwide due to high food prices. And high inflation leads to high interest rates. High interest rates produce a poor risk reward for owners of pricey tech stocks versus earning substantial interest fees from bonds. This makes tech investments signifiantly less attractive and far less likely to increase in price.

While food shortages may be the first climate impact to hit the financial markets, the markets seem oblivious to the multitude of long term impacts that are likely to wreck economies worldwide (along with potentially causing mass starvation and making large swathes of the globe unlivable).

Saturday, July 8, 2023

Got A Climate Change Denial Opinion Piece For The WSJ? No Need To Worry About Editor Fact Checking - Global Temperature

Climate change deniers have a couple of go-to websites; temperature.global and UAH Global Temperature. The deniers cherry pick data from these two websites and ignore the fact that the information these two sources provides is at odds with all other credible global temperatures, land air temperatures, marine air temperatures, sea surface temperature, sub-surface ocean temperatures, lower atmospheric temperatures, sub-surface land temperatures, and sea level rise as a metric of a warming climate system. A sampling of the more credible sources are NOAA, NASA, the UK Met Office, and the Japan Meteorological Agency.

In a July 8 Opinion article published in the Wall Street Journal, the author claims "Hottest Days Ever? Don't Believe It". Steve Milloy's data source supporting his claim is the obscure weather.global website. Milloy suggests that the University of Maine's Climate Reanalyzer report that July 3 and 4 were the hottest days on record is not believeble because it is not comfirmed by temperature.global. However, Milloy conveniently fails to mention that NOAA also confirmed this factoid (The National Oceanic and Atmospheric Administration is a scientific  agency within the United States Department of Commerce), And given that killer heatwaves are scorching the US Southwest and Louisiana, Mexico, China, India, and the Middle East, it's challenging to give credence to a data source that has failed to measure a July temperature spike.

The WSJ's editors seemingly failed to catch this bit of hypocracy. Milloy argues that temperature stations utilize corrupted data. But guess what the temperature.global site utilizes to compile it's reports? Yup, surface temperature measurement versus the satelite data utilized by Climate Reanalyzer. And NOAA's methodology is provided on the following webpage: https://www.ncei.noaa.gov/products/land-based-station/noaa-global-temp

It's long past time for the WSJ to stop allowing their "Opinion" section to be filled with misleading climate change editorials featuring manipulated data and cherry picked data sources.

Saturday, May 6, 2023

Fed Chair Powell's Attempt At Stand-Up Comedy

Guest post by OtareMilclub, a frequent contributor to Reddit.

At his May FOMC press conference, Mr. Powell tried his hand at stand-up comedy by saying "banking conditions have broadly improved since March." Could it really be possible that he can be so blind to what is actually happening within the banking system?

A banking system can only function properly when certain parameters are in place. Banks need to pay depositors a rate that is close to what they can receive from short-term Treasuries and that interest rate should also be above the rate of inflation. Most importantly, the rate paid on banks' liabilities (deposits) needs to be below the rate it receives on its assets (loans). A steep yield curve, where short-term rates are several hundred basis points below long-term rates, is conducive for a healthy banking system to exist.

In this scenario, deposits are sticky because there is no motivation to leave the banking system for the relative safety of T-bills; and banks can easily turn a profit due to the positive-sloping yield curve. The situation we have today is the exact opposite. Banks are now paying depositors far below what they can receive from a risk-free, short-term Treasury Bill, and that rate is nowhere near the increase in the Consumer Price Index. The risk of bank runs increases when the deposit rate cannot compete with that of inflation and the rate offered on T-bills. It just does not make any financial sense at all to keep your money in a place where the risk is greater, and the reward is far less.

Case in point, the FDIC placed First Republic Bank (FRB) on Receivership last Friday. It is the 4th such bank since early March to fail. The list so far is Silvegate Bank, First Republic Bank, Silicon Valley Bank, and Signature Bank. These are not all insignificant financial institutions. Excluding Silvergate, they were the 2nd, 3rd, and 4th largest bank failures in history. The deposits and assets of the erstwhile FRB bank were sold to none other than Jamie Dimon's JP Morgan (JPM). Of course, the shareholders get wiped out; but JPM gets their assets for dimes on the dollar, and the deal comes with a government backstop on potential losses as an added incentive.

I'm sure there's nothing to see here, though; these collapses are just aberrations. So, just buy, buy, buy stocks. But please indulge me while I inject some reality into the evaluation. Do you want to know what is really plaguing the entire banking system? It is actually very easy to understand once you open your mind to the simple truth. A plethora of high-risk loans were made when money was virtually free during 10 of the last 14 years. This secular system of free money led to a 40-year-high rate of inflation. CPI at over 4x the Fed's target compelled Mr. Powell to jack up interest rates by over 500 bps in just over one year. Hence, bank assets, and the income stream they provide, are worth far less than T-bills.

For example, one of a bank's largest assets is mortgages. The Fed pushed the overnight interbank lending rate to the floor and bought $2.6 trillion in mortgage-backed securities to push the cost of buying a home to a record low. In fact, the 30-year fixed mortgage rate was below 3% from July of 2020 thru March of 2021. Rates even plunged to a record low of 2.65% by early 2021. And, 30-year Fixed rate mortgages have been below the current Effective Fed Funds Rate (EFFR), which is now just over 5%, since May of 2010. This was not an issue for banks as long as inflation remained quiescent, and both the EFFR and T-bill rates were near zero percent. But that all changed when the CPI soared to 9% by the summer of 2022, and the risk-free rate on short-term government debt climbed to match that of the Fed Fund's target rate of 5-5.25%.

The problem is banks cannot pay depositors anything close to what they can now receive from a risk-free T-bill yield. Otherwise, they would be paying depositors more than they are currently receiving from a good percentage of their assets, and their profit margins would disappear. However, if banks don't begin offering much better rates to their customers' liquid deposits, it will lead to more money fleeing the banking system, which is a drain on reserves and curbs banks' ability to lend. This exacerbates the drain on reserves already occurring from the Fed's ongoing QT program. Banks are then forced to sell assets to meet liquidity requirements, which then puts further downward price pressure on these same assets and attenuates banking reserves further. Thus, expediting and intensifying the recession that is already in progress. In the end, the size of the bank is irrelevant. All banks suffer under this same dynamic—even the bigger ones—just to different degrees. Banks have already significantly tightened lending standards. And now, they will be forced to tighten lending practices even further due to the escalating deposit flight and increased regulatory oversight. Of course, mortgages are not the only loans made to consumers and businesses during the Fed's ZIRP regime that would face margin pressure if banks deigned to pay depositors a rate that is even close to what they can receive from T-bills. Net interest margins would shrink across the board.

The deep state of Wall Street is desperately trying to convince investors that the current array of banking failures is idiosyncratic and isolated. That is the new definition of insanity. Think about it…what do you think will happen to banks' assets when the unemployment rate begins to rise? Or, how much damage will be done to the commercial mortgage-backed securities market when the $2.5 trillion worth of "vacant" commercial real estate loans have to be refinanced? How about the Trillion-dollars' worth of collateralized loan obligations that will falter as the economy begins to contract?

In other words, we have yet to see the recession become manifest, which is so very clearly predicted by the National Federation of Independent Business' small business survey, the Index of Leading Economic Indicators, plunging money supply growth rates, the soaring net percentage of banks that are tightening lending standards, and inverted yield curves. The Fed's additional 25bp rate hike after the May FOMC meeting will serve to exacerbate and expedite the coming recession. And, once that economic contraction finally does arrive, we can expect the stress in the banking system to greatly intensify. The mainstream financial media is ignorant of this fact, but the regional banking index is not. The KRE regional bank ETF is down over 40% since February 7th of this year.

Sorry, Mr. Powell, the trouble in the banking system has only just begun. Investors would be wise to stay extremely defensive with their asset allocations until the Fed and Treasury are able to adequately re-liquify the financial system. But let’s see them try doing that without causing inflation to run intractable.

r/SilverDegenClub - Must Read if you have the time ex Pento