Climate on Wall St. over Trump nixing Paris Agreement

The US participation in the Paris Agreement, which is the United Nations-backed pact on reducing greenhouse gas emissions to combat global warming, was nixed last week, by the Trump Administration as it is written now.

First, let me say I do not agree that climate change is “settled science” since I am old enough to remember when climatologists said in the 1970’s that we were headed into an ice age due to human development .

Secondly, climates don’t change in decades, climate takes 10’s of centuries to work through its progressions. The climate science we are looking at now is similar to looking at one photograph of a marathon runner.

You have no context of how long the race is, or how the runner did in the race. It’s one step in a 26-mile race. And yet some scientist look at this photo and not only know who won the race, but also the time it took the runner to finish.

Thirdly, the climate cycles we have experienced over the last 50 years have all been attributed to man-made emissions whether it was drought or flooding, cold temperatures or warm temperatures, strong hurricanes or weaker storms.

It’s my belief that the sun and the reduction of sun spot activity over the last decade has more influence over our atmosphere than anything we are doing on Earth. However you don’t see that mentioned too much in this debate and I’ll get to why in a second.

So that’s my take on climate change and this is why I agree with the White House on not signing on to the pact as written.

One thing the Paris Agreement does do well is create one of the greatest wealth transfer in history. Through what’s called carbon credit trading the pact sets up an exchanged — run by Wall Street banks — to take cash from US firms and so they can by third-world carbon credits to offset the companies emissions.

It’s a tax on productivity, with Goldman Sachs, Morgan Stanley and other firms taking its piece. Why do you think Goldman’s chief Lloyd Blankfein broke onto Twitter for the first time to denounce Trump’s decision?

Not for fear of warming, but because Goldman is working with former Vice President Al Gore and David Blood, who is the former chief of Goldman Sachs Asset Management, to jump-start this trading platform through their firm Generation Investment Management. And if the largest buyer of your credits is not in the market, how do you make money?

Why would Tesla boss Elon Musk quit the White House advisory role? His whole company is created and funded by no emission vehicles. And if there’s no subsidies or future carbon credits for you and I for his cars than why buy them.

You see the Paris accord is not only aimed at US companies, it will get down to you and I and how we “manage our own carbon footprint”, through additional government fees and taxes.

So why is science not looking at the solar cycle as a cause? How can you tax the sun?

While the Paris Agreement is a feel good issue — who wants to destroy the planet — its mechanisms and funding structures are too one-sided against the US. China has very little restrictions on growth and emissions, despite being the No. 1 consumer of coal in the world.

So for the White House to say no we want a better deal than ex-President Obama agreed to is not out of the question. Besides if this is a treaty, Congress would have to approve it, before Trump could sign off on it.

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What is the GDP impact from California drought?

Generally speaking a 270 point rise in the Dow Jones industrial average — like that on Friday — is a good thing for investors and 401(k)s, generally.

Friday soaring stock averages was not based on a good thing however.

Equities rose on a tepid jobs number for April (223k) and a huge revision downward in March to 75k to celebrate the fact that easy money is in the offering for at least 6 more months. Readers here know I have said all along that there will be no rate rise this year.

So Main Street investors did jump in on this news, no this money came from institutions and overseas. It’s not based on fundamentals, it’s based on return.

The whole rise from the day was in by 10am and churned sideways until the close.

So for all you newly hired bartenders and waitresses, here’s to you. If you had a 401(k) then you could raise a glass with us. But there are no bennies with that job.


I recently put out a question on Twitter, which I will pose here as well.

What are the expectations of GDP, when you figure in the California drought?

Sixth largest economy in the world if it stood on its own, what effect will it have on Q2 and Q3 US GDP?

I’ll venture a guess this will be the newest reason that equities soar when we go negative growth for three quarters this year.