Thursday, April 30, 2020

The worldwide race to make solar power more efficient - BBC News

The worldwide race to make solar power more efficient - BBC News



......perovskites - named after Count Lev Alekseevich von Perovski, a 19th Century Russian mineralogist.

These have a particular crystal structure that is good for solar absorption. Thin films, around 300 nanometres (much thinner than a human hair) can be made inexpensively from solutions - allowing them to be easily applied as a coating to buildings, cars or even clothing.
....made from two materials, they get to break through the Shockley-Queisser limit.
The silicon absorbs the red band of the visible light spectrum, and the perovskite the blue bit, giving the tandem bigger efficiency than either material alone.

Coronavirus: McConnell's Right About States Declaring Bankruptcy - Bloomberg

Coronavirus: McConnell's Right About States Declaring Bankruptcy - Bloomberg



Letting States Declare
Bankruptcy Isn't a Dumb Idea

The federal government needs to help states pull through the
pandemic, not to make up for irresponsible decisions on pensions.

By Ramesh Ponnuru

Senate majority leader Mitch McConnell has not been getting
good reviews for his suggestion that state governments be allowed to declare
bankruptcy rather than receive federal aid to “bail out” their pensions.

Representative Pete King of New York called McConnell “the
Marie Antoinette of the Senate.” Maryland Governor Larry Hogan said that
McConnell either regretted his comments or would come to regret them.

And that’s just McConnell’s fellow Republicans. New York
Governor Andrew Cuomo, a Democrat, said McConnell had made “one of the dumbest statements
of all time.” Journalistic commentary was similar, with Vanity Fair blasting
McConnell’s “political nihilism.”

But if you ignore the invective and listen to the points
each side is making, you will see that both McConnell and his critics are
largely correct — and that they’re talking about different things.

What the critics get
right
is that the states’ current fiscal crisis is not primarily a result
of their irresponsibility. We don’t want the states to raise taxes and slash
spending to balance their budgets in the middle of a public-health and economic
catastrophe. The federal government, which has greater borrowing capacity,
should provide them with relief.

McConnell’s stated concern is that the federal government
might pick up the tab for states’ mismanagement of their pensions rather than for the pandemic. Some states have made exorbitant
promises to their employees over the years without providing adequate funding
.
They made up the difference, on paper, by projecting unrealistically high
returns on pension investments.

The Federal Reserve, applying a better projection of
returns, estimates that pensions are underfunded by $4 trillion. McConnell is right to think that it
would be unfair to make Florida’s teachers and firefighters pay for benefits
for their counterparts in Illinois
, and unwise to create an incentive for
further irresponsibility by state officials.

The president of the Illinois state Senate has already asked
for $10 billion in federal help with the state’s pensions. McConnell wants to
prevent states from using the coronavirus crisis as a pretext for a wealth
transfer that enables them to keep avoiding hard choices.

Emotions run high when billions are on the line, and the
controversy turned hotter because McConnell’s comments came in response to
questions about funds for Democratic-leaning states. Summarizing one of his
interviews in a press release, his office highlighted the remarks about
bankruptcy under the heading “blue-state bailouts.” That may have been what
prompted Cuomo to shoot back that New York sends more money to the federal
government than it gets back, while the reverse is true of McConnell’s home
state of Kentucky.

But Cuomo’s shot isn’t really an answer to McConnell. The
fact that federal taxation is progressive — the kind of policy that explains
the pattern of donor and recipient states, and that Cuomo himself favors — does
nothing to justify nationalizing
state-pension shortfalls
.

Federal law currently makes no provision for states to
re-organize their commitments through bankruptcy proceedings. Creating one
would not keep the coronavirus from crushing state budgets. It could, however,
prevent, or at least limit, future federal bailouts for state mismanagement of
pensions.

David Skeel, a law professor at the University of
Pennsylvania and the leading academic proponent of a bankruptcy option for
states, argues that it would also improve state decision-making. Public-sector
unions might push for more up-front funding for pensions, for example, if
unfunded benefit promises run a risk of disappearing in bankruptcy proceedings
.

Some of the arguments against state bankruptcy, such as the
claim that it inevitably favors bondholders over everyone else, are spurious.
The idea would, however, face constitutional challenges, as would other
proposals to condition federal aid on state reforms. In the Supreme Court’s
2012 Obamacare decision, seven justices held that the federal government
could not make states offers that amounted to coercion
. “We’ll help you if
you change your pensions’ accounting standards or file for bankruptcy” might
count.

But the pros and cons of bankruptcy are, at the moment,
somewhat beside the point. As the reaction to McConnell’s comments suggests,
the Democratic House is extremely unlikely to agree to create a bankruptcy
option this year. Skeel tells me that McConnell’s office has not contacted him.
That’s a signal that he does not have bankruptcy legislation in mind.

The purpose served by McConnell’s remarks is to establish
that his tolerance for aid to states has limits and that he will be resisting
any effort to exploit the crisis to secure a general bailout for spendthrift states. If McConnell and other
Republicans are overzealous about this point, they could skimp on needed
funding for state governments. But for all the indignation it has aroused, the
point itself is a valid one.

This column does not necessarily reflect the opinion of the
editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Ramesh Ponnuru at rponnuru@bloomberg.net

To contact the editor responsible for this story:
Tobin Harshaw at tharshaw@bloomberg.net






Coronavirus Should Re-Charge Zero-Carbon Energy - Bloomberg

Coronavirus Should Re-Charge Zero-Carbon Energy - Bloomberg



After The Crisis
Coronavirus Should
Recharge the Push for Zero-Carbon Energy
Developing countries that will drive energy demand and still
rely on fossil fuels have the most to gain from making the switch.

By Nathaniel Bullard
April 29, 2020, 11:00 AM GMT+1

Nathaniel Bullard is Bloomberg NEF's Chief Content Officer.
He writes weekly for Bloomberg Green on energy, transport, technology, climate
and finance.

As the coronavirus
pandemic continues, Bloomberg Opinion will be running a series of features by
our columnists that consider the long-term consequences of the crisis. This column
is part of a package on how to navigate turmoil in energy markets. For more,
see Liam Denning on how to build a more sustainable U.S. energy system and
Meghan O’Sullivan on the strategic challenges the U.S. faces from plunging oil
prices.

A dozen years ago, New Energy Finance founder and CEO
Michael Liebreich asked a room full of California electricity sector executives
and regulators what their strategy would be when a grid flooded with solar
power pushed their power prices below zero
. Replies ranged from “that’s
ridiculous” to “that will never happen” to “what are you talking about?”

Now it’s the sort of thing that happens frequently. The wild
churning of oil markets over the last few weeks, pushing U.S. oil futures and
physical oil markets into negative territory, has brought memories of that
conversation back into sharp relief.

The market gyrations from the impact of the coronavirus (and
an earlier oil price war) ought to unsettle any energy watchers. Even ardent
believers in the inevitability of a zero-carbon world recognize that the
pandemic could strain renewable energy markets, depressing investments by
legacy energy companies in renewables, sandbagging purchases of carbon
allowances, and reducing corporate commitments to clean energy more broadly. In
these topsy-turvy times, executives could be forgiven for seeing
“sustainability” as more about keeping a business going than examining its
electricity mix.

That’s especially true in the developing world, where fossil
fuel-fired power still accounts for most of the asset base and power
generation. Since these countries will also account for most of the energy
demand growth through 2050, their choices will have a decisive impact on global
health and wealth, from climate change to the quality of our air and water. But
how should places that are just entering the contemporary energy economy plan
for tomorrow when today is unprecedented?

I have some suggestions, and they begin with some numbers.
China and other emerging markets already represent a big share of global clean
energy investment. The scale of this market — more than a third of a trillion
dollars invested in each of the past five years — makes clear that clean energy
is hardly a niche thing, nor is it only in rich countries.

It's Not Just China
Clean energy investment by year

Sources: Climatescope, BloombergNEF

The reason for these big numbers is cost: Clean energy is often the lowest-cost
option for new power generation in any country
, regardless of its per
capita income, its level of development or its renewable resources. In India,
for instance, the cheapest two unsubsidized options for new power generation
are wind and solar.

Of course, a global pandemic could set back any sort of
long-term infrastructure and technology planning, energy included. Those
realities just make it all the more important to think in a structured way
about what the energy future could look like in low-income and
developing countries.

Let’s start with what I think of as the three V’s: Vector, Variance and Value.

Vectors create a
sense of direction
that can make predictions easier. And thus far, clean
energy technologies have established a pretty clear direction: Their cost has
gone down, even as their efficiency has gone up. This is attributable to some
key characteristics. First, these technologies are modular and high volume.
They’re distributed: That is, they are deployed many times over per year, in
many locations. And as a result, they benefit from manufacturing economies of
scale and constant improvements.

Consider that only 385 coal-fired power plants are now
under construction
. But this year, tens of thousands of wind turbines will
be assembled and installed, as well as hundreds of millions of solar PV
modules. All of that production and iteration means refinement — improved
efficiency, lower cost, greater reliability — as manufacturers and installers
get better at what they do.

These improvements are reliable enough that investors can
plan on them continuing, too. An example is the spot price for multicrystalline
silicon photovoltaic modules. Notwithstanding some minor variations, the
direction of travel is unmistakable.

Down by 90 Percent
Spot price for multicrystalline silicon PV module

Source: BloombergNEF

The second V to consider is variance. If high-volume distributed clean power technologies
consistently decrease in cost and increase in efficiency, the inverse is true
of fossil fuels. Prices vary based on supply and demand — wildly, in the case
of the last few weeks — while the energy content of fuels is fixed by their
molecular composition.

That variance might be nice if you’re an energy trader, but
it’s hard to manage if you’re making 20-year to 40-year decisions about
building fossil fuel-fired power generation. Planners can’t predict that the price
of any given fuel
will stay in the range that they use when approving
plants, and that bankers use in their financing assumptions. Over just the past
three years, for instance, seaborne coal in Asia has been cheaper on an energy
basis than both gas and oil…and it’s also been more expensive than both of
them. Planners can lock in long-term prices at fixed rates, but they can’t do
so forever; once a plant is built, converting it to another fuel is quite hard
or impossible. The only constant to expect from any new fossil fuel-fired
power generators is variation.
 

Dropping, Plunging, Converging
Prices of oil, liquefied natural gas, and coal in energy-equivalent terms

Source: Dan Murtaugh, Bloomberg

There’s another more immediate variance to take into
account: interest rates. As my colleague John Authers recently noted, research
from the Federal Reserve Bank of San Francisco found that lower real interest
rates follow pandemics (whereas higher real interest rates follow wars). Pandemics see lower real interest rates for a fairly logical, if depressing,
reason: lower economic activity, and no shortage of capital in need of
replacement
.

These lower interest rates can work to clean energy’s
advantage. Power generation assets that rely only on the elements or the
earth’s heat as energetic inputs do not require fuel. As a result, they have
far lower operating expenses than fossil fuel-fired power generation.
Essentially, clean energy assets require investors to carry decades worth of
variable operational expenditure forward into one, fixed capital expenditure.
It requires more money up front, to swap
operating expenses for capital expenses
, but that becomes easier the lower
interest rates fall.

The final V? Value,
as in “value added.” In this case,
value added has a lot of connotations, from the technical and energy-specific
to the financial and the environmental, and they all matter.

In technical terms, clean energy can help lower-income or
developing world energy systems by providing electrons to consumers faster than
building large central station power plants. They deploy in a distributed,
scalable
fashion — from a solar panel charging a lantern to a power plant
energizing a city. They are resilient: A system of smaller clean power
generators can better resist the hurricanes, for instance, that devastated
Puerto Rico’s decrepit, mostly oil-powered central grid.

Financially, clean energy can reduce energy spending. Lower
exposure to variable fuel prices is valuable too. So, too, are jobs created.
The relatively high number of workers needed to install and service
distributed solar energy is a feature, not a bug, in this instance — and it provides
jobs while also providing energy savings.

In environmental terms, clean energy adds clear value.
Carbon dioxide emissions are very low or nonexistent. The impacts from fuel
extraction are minimal. The quality of local air and water is improved.

Of course, the impact of Covid-19 is shaping not just
investor sentiment, but confidence in the future. Both factors make it hard to
plan, but plan we must. Here are three recommendations for policy makers to
keep in mind:

Acquire good data: It seems simple but it isn’t. Energy
ministers, government bureaucrats, politicians and other decision-makers often
operate with technology cost assumptions that are years out of date. Get the
latest price data for renewable technologies; get the latest and most transparent
cost of energy generation analysis; ask yourself what will happen if trends
continue (or if they don’t).

Be a good investment:
Energy assets are fixed in location, long in duration and creatures of capital
markets. Clean energy may be cloaked in virtue, but it’s naïve to think that
such investments should be exempt from the normal governance, process of
policy-making and financial constraints of any country that pursues them.
BloombergNEF’s annual Climatescope analyzes 167 country-level indicators, from
policy and capital markets to technical standards, that enable robust clean
energy investment. They point to what makes investors happy, and what will
attract the patient, engaged capital best suited to long-term assets.

Put more people to
work
: Renewable energy can be much more of a jobs engine than fossil
fuel-fired power generation. Last year, the U.S. solar industry employed more
than 248,000 people; coal- and gas-fired power together employed 202,000.
Solar, in particular, is a significant employer during construction. And these
jobs aren’t just for men, either. Worldwide, the number of jobs in renewable
energy generation rose from 7.3 million in 2012 to almost 11 million in 2018.
Its end product — low-cost, zero-carbon energy — also puts people to work.

Today’s energy market turbulence just makes the long-term
advantages of zero-carbon power generation even more clear, especially for
developing countries intent on supplying more power to their people.
Electricity for everyone has been achieved before; it can be done again – only
cleaner this time.

This column does not necessarily reflect the opinion of the
editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Nathaniel Bullard at nbullard@bloomberg.net

To contact the editor responsible for this story:
James Gibney at jgibney5@bloomberg.net







Covid-19 Oil Collapse Is Geopolitical Reset in Disguise - Bloomberg

Covid-19 Oil Collapse Is Geopolitical Reset in Disguise - Bloomberg








After The Crisis
Oil's
Collapse Is a Geopolitical Reset In Disguise
From Russia to Mexico, U.S. foreign policy makers face new risks
and opportunities.


By Meghan L. O'Sullivan
Be
prepared to change course.

Be prepared to change course. Photographer: USS George H.W.
Bush / Handout/Anadolu Agency/Getty Images
Meghan L. O’Sullivan is a Bloomberg Opinion columnist. She
is a professor of international affairs at Harvard’s Kennedy School and is on
the board of directors of the Council on Foreign Relations. She served on the
National Security Council from 2004 to 2007.
Read more opinion
Follow @OSullivanMeghan on Twitter

As the coronavirus pandemic continues, Bloomberg Opinion
will be running a series of features by our columnists that consider the
long-term consequences of the crisis. This column is part of a package on how to navigate turmoil in energy markets. For more, see
Liam Denning on how to build a more sustainable U.S. energy system and
Nathaniel Bullard on why developing countries should speed up their energy
transition
.

The world is on the cusp of a geopolitical reset. The global
pandemic could well undermine international institutions, reinforce nationalism
and spur de-globalization. But far-sighted leadership could also rekindle
cooperation, glimmers of which appeared in the G-20’s offer of debt relief for
some of the world’s poorest countries, a joint plea from more than 200 former
national leaders for a more coordinated pandemic response and an unprecedented
multinational pact to arrest the crash in oil markets. 

The remarkable effort to address the turmoil in the oil
markets will be critical to oil’s eventual balance — although the past two
weeks have shown that its promised production cuts were too slow and
insufficient in the face of oil demand’s plunge
. The challenges and
opportunities that the collapse in the oil market is pushing to the fore are
perhaps just the first taste of Covid-19 induced geopolitical crises that world
leaders and policy makers will need to grapple with in the coming months and
years.

As history has shown, a big change in energy markets often
precipitates a big change in geopolitics. For instance, the shift from coal to oil catapulted
Middle Eastern countries to strategic
significance
. And the recent technology-driven boom in shale oil elevated
the United States to net oil exporter status, changing its outlook on the
importance of oil in global affairs. We now face a disruption of such
proportions that it, too, will reorder some power relationships
.

Right now, the focus in Washington is on how to save the
U.S. oil industry, much of which is under enormous pressure given the drop in
prices. While this is understandable and necessary, Washington needs to make
room on its list of priorities for a number of strategic shifts that the crisis
has created. For starters, policy makers should consider four challenges and opportunities that are already manifest.

Prepare for more
fragile, or even failed, states
and the risks that can accompany them.

For dozens of oil producers, the plunge in oil prices is
devastating. No major oil producer can balance its budget at prices below $40; according to the
International Monetary Fund, with the exception of Qatar, every country in
the Middle East requires at least $60, with Algeria at $157 and Iran at a
whopping $390. The average Brent price of oil over the past month has been a
hair above $20
.

Of course, fiscal break-even prices are only one factor when
gauging which oil producers are the most vulnerable to deep economic
dislocation and its accompanying social and political turmoil. Those with
(comparatively) more diversified
economies
— such as the United Arab Emirates, Mexico and Russia
are obviously better off. Countries with fixed
exchange rates
— like Nigeria and Saudi Arabia — are at a particular
disadvantage, as they need to use their precious foreign exchange reserves to
prop up their currencies. Some countries have the capacity to cut expenditures, and others to borrow. And some have legitimate
political institutions
to manage the inevitable hardships as subsidies are
slashed, jobs are lost and capital spending is curtailed.

But many do not. And, unlike the last price plunge in 2016,
this shock does not come after a period of stable, high oil prices, which
allowed some countries to bolster their finances. Instead, oil prices have been
middling, as America’s surging shale oil production and OPEC+ production cuts
kept them roughly in the $50-$70 range, below many oil exporters’ fiscal
break-even levels. 

Iraq, Oman, Algeria, Nigeria, Ecuador, Angola, Suriname
— not to mention two countries already on the brink, Iran and Venezuela
— are particularly vulnerable. They
may not all fail in the sense of state collapse, but many could cease to
meet their public sector payrolls, never mind expenditures related to health
care, education and other services, including security
.

The mere prospect of many countries unable to fund their
security budgets should sound alarm bells in the United States and beyond. It
adds urgency to a question that national security professionals, foreign policy
makers and politicians have grappled with since 9/11: How to keep ungoverned
territories from becoming safe havens
for terrorist groups or drug cartels
looking to target the West or
undermine its security in other ways. Of particular concern to U.S. policy
makers should be Iraq, Nigeria and Mexico. Each faces its own looming
crisis, with potentially profound implications for U.S. interests.

In Iraq, a
caretaker government confronts deep fiscal travails: Its oil revenues — which
make up 90% of budgetary income — plunged by 46% for March, even before the
full impact of the coronavirus on oil was apparent. This fiscal collapse has
dire implications for the country’s struggle to stave off ISIS, for
Iraq’s ability to stand up to interference by its neighbors and for its efforts
to meet the demands of its young and restive population.

Nigeria’s economy
is likewise beleaguered, having just begun to climb out of a recession before
the imposition of strict pandemic containment measures. Signs of social
discontent
are on the rise, and President Muhammadu Buhari — a former
military man — could resort to the army to maintain law and order. That would
undermine the legitimacy and effectiveness of Nigeria’s battle against an Islamist
insurgency
in the northeast of the country, with ripple effects throughout
an already vulnerable region.

With its diversified economy, a hedge on its oil for 2020
and relatively developed institutions, Mexico
is much better positioned to manage the turmoil in energy markets. But
President Andres Manuel Lopez Obrador’s apparent unwillingness to grasp the severity
of the pandemic should be cause for concern. Even as other countries deliver
eye-popping relief to the newly unemployed, Lopez Obrador has barely budged
from earlier pledges of austerity or moved to revisit other elements of his
economic plans. The federal government is struggling to wrest control of parts
of the country from drug cartels, and to meet U.S. demands to contain
Central American migrants heading north. Should Mexico be forced to cut
back spending on security forces as seems highly likely, both those
problems could metastasize.

How might the United
States and its partners prepar
e for more turmoil in these countries, and in
ungoverned territories, particularly in the Sahel or the Middle East where
extremist groups already have toeholds? One answer is obviously the need to
maintain and increase aid and humanitarian assistance to the many
countries that will face existential crises, either from the oil plunge, the
coronavirus, or both. Another answer, strangely enough, can be found in Syria. Far from being the “forever
war” that President Donald Trump called it, the small, behind-the-scenes
contingent of U.S. troops supporting a much larger group of indigenous forces
against extremist fighters
is the sort of arrangement that the United
States — ideally with others — should replicate in countries that ask for help.
Faced with the demands and fears of their own citizens, politicians in North
America, Europe and elsewhere may struggle to justify security and other
support for countries whose institutions wobble or collapse under the combined
weight of low oil prices and the coronavirus. But being prepared to build more
limited military partnerships — and, importantly, to explain to their citizens
why such arrangements aren’t “forever wars” — will be part of managing the
foreign policy fallout of this moment.

Double-down on contingency planning and red-teaming for Iran
and Venezuela.

Both Iran and
Venezuela
were careening before the coronavirus materialized. Under severe
U.S. sanctions, oil exports — a lifeline for both countries — had been
dramatically curtailed before the pandemic and the oil price collapse. The
impact of cratering oil prices will therefore be far less than in the past, but
each will still suffer as foreign exchange dwindles further, constraining
imports even more.

Many in the Trump administration may hope that this
confluence of historical factors leads to the downfall of the Bolivarian
revolution in Venezuela and the Islamic revolution in Iran. Yet is the United
States prepared if either scenario unfolds?

The fall of Venezuela’s
Nicolas Maduro may lead not to the transitional government many have hoped for,
but to complete state collapse and an epic humanitarian and security disaster.
Alternatively, if the country is hit hard by Covid-19, pressures for political
accommodation between Venezuela’s opposition and the government could extend
Maduro’s tenure. Iran’s government
is much more entrenched, and it is hard for outsiders to accurately assess
what’s happening there right now. If the regime is under unprecedented pressure,
the most likely outcome is not for a democratic alternative to emerge, but for
the Islamic Revolutionary Guard Corps to assume more power, heightening
U.S.-Iran tensions
and the potential for hot conflict.

Now would be a good time for the U.S. not only to step up its contingency planning for such
outcomes
, but also to consider whether changes to American policy toward
either country would better advance its interests and mitigate human suffering.
In particular, the United States should reconsider its earlier decision not to
establish some version of an Oil for Food program for Venezuela. Such a program
could save Venezuelan lives, stem the tide of refugees that risks destabilizing
the whole region and bolster the political opposition; in the face of a global
pandemic, these benefits should now outweigh any concerns policy makers may
have had about prolonging the life of the Maduro regime.

Defuse a looming U.S. crisis with Saudi Arabia.

Saudi Arabia and
other OPEC+ members had multiple motives for agreeing on April 12 to curb oil
production. In Saudi Arabia’s case, however, among those reasons was a sharp
increase in hostility from members of the U.S. Congress who in the past
appeared to appreciate the multifaceted relationship between Riyadh and Washington.
Once willing to speak in favor of the U.S.-Saudi partnership, these members
suddenly revealed that they were willing to upend economic, military, and
diplomatic ties if Saudi Arabia did not curb its production to arrest the
free fall of oil prices
(and protect the American oil industry).

Such threats no doubt gave President Trump leverage when
pressuring Saudi leaders to agree to a deep cut. But they also exposed the
fragility in the bilateral relationship. If oil prices continue to fall,
members of Congress may well try to punish Riyadh for a situation largely not
of its own making. It would be a painful pressure point on the kingdom at a
time when neither the United States nor the region can afford any greater
destabilization. To avert that possibility, the administration should work
closely with key members of Congress. It should not cede management of the
bilateral relationship to the legislative branch.

Expand contacts over managing the oil market into more
lasting areas of détente.

Recent efforts to pull the global oil market back from the
brink exposed some new common interests and triggered intense contacts between
leaders. Might this prompt greater cooperation in otherwise fraught
relationships? As President Trump’s about-face on the value of OPEC
demonstrates, now is a time for rethinking old orthodoxies and finding new ways
to approach problems.

Despite Trump’s insistence that the United States needs and
wants a better relationship with Russia,
this dysfunctional dyad so far has been impervious to recalibration. Moscow and
Washington are unlikely to come to any meaningful détente, given President
Putin’s need to demonize the United States and the certainty that Russia is
in for hard economic times
. Putin has repeatedly tried to compensate for
economic bad news by asserting Russia more aggressively on the world stage. He
could well do the same again.

Yet a small opening exists to professionalize a segment of
bilateral U.S.-Russia ties. Russia has long been interested in pulling the United
States into coordinating the global oil market. Although the United States does
not need to join OPEC+ and its pledges to mandate production cuts, having
regular exchanges about global energy trends could create a niche for
constructive discussions between Russian and U.S. officials. It is not crazy to
think that a dialogue around common energy interests could evolve into a more
meaningful conversation about how to deal with Venezuela’s collapse, for
instance.

Similarly, although China
was not a central player in trying to stem the oil market collapse, the United
States and others should bring Chinese officials into regular consultations on
the topic. As the world’s largest oil importer and its sixth largest producer,
China’s interests are mixed. But as the world’s second largest economy, China
may have its own tools to influence global supply and demand. Energy (and
climate) are areas in which the United States and China have common interests
,
and where they have had productive exchanges, even during periods of tension.
Again, it is not crazy to think that such dialogues, if intensified, could be a
net positive in a critical but rapidly deteriorating bilateral relationship.

Finally, by giving Mexico, Saudi Arabia and Russia a
face-saving way to paper over Mexico’s partial compliance with the April 12
production cut agreement, Trump should have secured some goodwill with Mexico’s
president. That could come in handy as both countries, with their intertwined
economies, cooperate to smooth the transition to normalcy, whenever that comes.

Foreign policy makers and leading thinkers do need to
consider how the global order will change in response to the coronavirus. As John Ikenberry pointed out
elsewhere, history suggests that initial moves toward isolation could be
followed by global efforts to re-create needed institutions
. But a U.S.
failure to address the more immediate challenges stemming from the Covid-19 oil
market collapse will not bode well for any larger effort to remake the world
order.

This column does not necessarily reflect the opinion of the
editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Meghan L. O'Sullivan at Meghan_OSullivan@hks.harvard.edu

To contact the editor responsible for this story:
James Gibney at jgibney5@bloomberg.net

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5 things to start your day - btbirkett@gmail.com - Gmail

5 things to start your day - btbirkett@gmail.com - Gmail





Those that love to hate the recent stock rebound are putting their money where their mouth is. As my colleague Claire Ballentine pointed out Wednesday, stock bears are rushing to invest in inverse exchange-traded funds this month, with inflows heading toward record highs. The ProShares Short S&P 500 ETF -- which looks to return the opposite of the performance of the U.S. stock benchmark -- is on pace for its biggest monthly inflow ever. More juiced up peers which target multiples of the inverse performance of stocks -- such as the ProShares UltraPro Short S&P 500 ETF and Direxion Daily S&P 500 Bear 3X Shares ETF -- are also heading toward their best months ever. The U.S. equity rally is now clocking in around 31%, with stocks sitting just 13% below their all-time high from February. If traders see that as enough for now, and the rally corrects, the fresh bearish money could soon see a return. But if stocks continue to push higher, those invested in the leveraged funds could come under pressure to cut their losses -- in the process adding another boost to the upward momentum.

Tuesday, April 28, 2020

Deutsche Bank Gives Us a View of the Credit Abyss - btbirkett@gmail.com - Gmail

Deutsche Bank Gives Us a View of the Credit Abyss - btbirkett@gmail.com - Gmail



...On the face of it, we are able to sustain far more private debt to GDP than we were 50 years ago because taxpayers are prepared to do far more to prevent defaults:



...The positive side to defaults, if there is one, is that it stops inefficient businesses from draining capital, and allows banks and investors to look for projects that have a better chance to grow. An environment with  ever lower rates and predictable intervention to avert defaults is also an environment in which we might expect productivity to endure a steady decline. And Reid’s numbers suggest that that is exactly what has happened:



...In that decade the volume of dollar-denominated bonds has more than doubled, to satisfy the appetite for yield created by the background of virtual zero interest rates. This has happened even though the inventories of big banks that make markets in bonds have collapsed to levels last seen almost 20 years before the crisis, largely as a result of banking re-regulation:

With ever more debt, on ever sketchier terms, against the backdrop of a lackluster economy, it should be no surprise that financial crises are growing more common.
...the era of the two world wars and the Depression saw the heaviest concentration of financial crises in history:
The chart also shows that crises have intensified in recent years. But what sticks out like a sore thumb is the period from the war until about 1970, when Deutsche Bank recorded no financial crises at all. This of course overlaps directly with the Bretton Woods era of exchange rates fixed to the dollar, which was fixed to gold, and heavily regulated banking.
...Until 1951, the Federal Reserve was under orders to keep bond yields down and effectively force everyone to lend to the government at a cheap rate. With timing that cannot be coincidental, the New York Fed published this paper on how financial repression worked earlier this month.
As it stands, the ride toward the abyss is bringing an ever more sluggish economy and an ever deeper sense of injustice in its wake. How might this end other than with capitalists confronting the devils they most fear? Reid suggests the most likely conclusions are either financial repression, or a dose of inflation. And as nobody in the markets is positioned for inflation at present, that might just be the position of maximum pain




U.S. deaths soared in early weeks of pandemic, far exceeding number attributed to covid-19



https://www.washingtonpost.com/investigations/2020/04/27/covid-19-death-toll-undercounted/?arc404=true

Sections
Democracy Dies in Darkness
Investigations
U.S. deaths soared in
early weeks of pandemic, far exceeding number attributed to covid-19
An analysis of federal data for
the first time estimates excess deaths -- the number beyond what would normally
be expected -- during that period.
By Emma Brown ,
Andrew Ba Tran ,
Beth Reinhard and
Monica Ulmanu
 April 27 at 11:11 AM

Sources:
Overall death data comes from the National Center for Health Statistics,
covid-19 death counts come from state health departments and are compiled by
The Washington Post, and estimates for expected deaths come from Yale School of
Public Health’s Modeling Unit.

In the early weeks of the
coronavirus epidemic, the United States recorded an estimated 15,400 excess
deaths, nearly two times as many as were publicly attributed to covid-19 at the
time, according to an analysis of federal data conducted for The Washington
Post by a research team led by the Yale School of Public Health.

The excess deaths — the number
beyond what would normally be expected for that time of year — occurred during
March and through April 4, a time when 8,128 coronavirus deaths were reported.

The excess deaths are not
necessarily attributable directly to covid-19, the disease caused by the
coronavirus. They could include people
who died because of the epidemic
but not from the disease, such as those
who were afraid to seek medical treatment for unrelated illnesses, as well as
some number of deaths that are part of the ordinary variation in the death
rate. The count is also affected by increases or decreases in other categories
of deaths, such as suicides, homicides and motor vehicle accidents.

But in any pandemic,
higher-than-normal mortality is a starting point for scientists seeking to
understand the full impact of the disease.

The Yale analysis for the first time estimates excess deaths, both
nationally and in each state, in those five weeks. Relying on data that
the National Center for Health Statistics (NCHS) released Friday, the
analysis paints a picture of unusually high mortality that will come into
sharper view as more data becomes available.

The analysis calculates excess
deaths by using a model to estimate how many people probably would have died
absent the pandemic, and then subtracting that number from the overall deaths
reported by the NCHS.

The analysis suggests that the
deaths announced in the weeks leading up to April 4, based on reports
from state public health departments, failed to capture the full impact of the
pandemic. Those incomplete numbers were widely cited at a time when many states
were making critical decisions about closing businesses and taking other
actions to stem the spread of the virus.

The analysis also suggests that
the death toll from the pandemic is significantly
higher
than has been reported, said Daniel Weinberger, a Yale professor of
epidemiology and the leader of the research team. As of Sunday, more than
54,000
people had been killed by the novel coronavirus, according to
numbers reported by state health departments and compiled by The Post.

“It’s really important to get the
right numbers to inform policymakers so they can understand how the epidemic is
evolving and how severe it is in different places,” Weinberger said.

The national tally also shapes
the public’s perception of how serious the disease is, and therefore how
necessary it is to continue social distancing despite economic disruption. The
figure has political implications for President Trump, who initially played
down the threat of the virus and whose administration failed to ramp up
covid-19 testing quickly, allowing the virus to spread undetected for weeks.

Some of Trump’s defenders have
claimed that covid-19 death figures are inflated because they may include
people who died with the disease but not of it.

“The death toll is being
held up by everyone, really, as a pretty direct metric for assessing the competence of the federal response,”
said Jeremy Konyndyk, a former USAID official who helped lead the U.S. response
to the Ebola outbreak and other international disasters during the Obama
administration.

The problem of undercounting
coronavirus deaths is not unique to this pandemic or to the United States. In
many countries, insufficient testing
is a major obstacle to understanding the scale of the pandemic.

In the United States, public
health experts say reporting lags, along with the fact that nearly every state
initially counted only cases in which the coronavirus was confirmed through a
test, contributed to an incomplete picture of deaths in those early weeks.

The NCHS recently started keeping
its own tally of covid-19 deaths, separate from the tallies based on states’
reports to the Centers for Disease Control and Prevention.

The NCHS’s tally, based on death
certificates, attempts to correct for reporting lags and includes cases that
lacked a lab confirmation of the coronavirus. But even the NCHS covid-19 death
total from those early weeks — 10,505 as of Sunday — is only two-thirds of the
excess deaths in the Yale estimate.

No jurisdiction has been as
aggressive as New York City, the U.S. epicenter of the epidemic, in revising
its death counts from those early weeks. As of Saturday, the city had added
2,542 covid-19 deaths to those figures, driving the total from that period up
to 5,085. The newly added deaths were almost equally split between cases that
were confirmed through lab testing and cases that were deemed “probable”
covid-19 deaths based only on symptoms and exposure.

All figures are for March through April 4. New York City
and Washington state have since updated their numbers for this period. New York
state figures exclude New York City.

The revisions brought the
covid-19 total for New York City closer to the Yale analysis’s estimate
of 6,300 excess deaths during that period.

A handful of states have also
begun reporting probable deaths in recent days, generally by adding them to
current tallies rather than by publicly revising figures from past weeks. Most
states have not added probable deaths.
For example, New York state, unlike New York City, has not.

The Yale analysis estimates that,
excluding New York City, approximately 1,700 more New York state residents than
would be expected had died as of April 4 — far more than the 1,022 counted as
covid-19 deaths.

Gov. Andrew M. Cuomo (D)
acknowledged at a news conference last week that his state’s tally is “not an
accurate total number of deaths, in my opinion.”

“That number is going to go up,”
he said. “Those deaths are only hospitalization or nursing home deaths. That
does not have what are called at-home deaths.”

The family of Long Island
resident Adrian Sokoloff say they believe he is one of the uncounted. The
retired owner of a pet products company, he had just celebrated his 99th
birthday when he started showing symptoms of covid-19 on March 19, his daughter
Karen Sokoloff said. His family said his pulmonologist diagnosed him with
covid-19 because of spiking fevers and coughing — and because two of his
caregivers had come down with chills and lost their sense of taste, a telltale
sign of the virus.

Sokoloff’s children had decided
not to take him to a hospital out of fear that he would die there alone. They couldn’t
get him tested for covid-19 at home
.

On March 29, he died at home in
Sands Point, N.Y. His death certificate reads, “congestive heart failure,”
according to his daughter.

She says her father’s death
should be reflected in the covid-19 death toll and fears that an artificially
low count is giving some states license to reopen their economies prematurely.
“You have to have the data to make an intelligent decision, and if you’re not
counting the number of people who died from this, then you’re not making an
intelligent decision,” she said.

Has someone close to you died
from covid-19? Share your story with The Washington Post.

In New Jersey, another hard-hit
state, 9,854 people died during the period covered by the analysis —
approximately 2,200 more than would be expected, according to the Yale
estimates. Of those, however, only 846 were counted as covid-19 deaths.

Marco Navarro, an EMT who works
in three northern New Jersey cities, said that before the pandemic, he could go
two to three weeks without seeing a cardiac
arrest
or a call that required his team to perform CPR. Now it happens two
or three times a day
.

No one knows why. Is the virus
attacking the heart? Are blood clots causing cardiac issues? Are people terrified
they will contract the virus in a hospital
ignoring their symptoms and
staying home until it’s too late, as
many doctors have concluded?

“I don’t really have an answer,”
said Navarro, who works in Union City and sometimes in Jersey City and North
Bergen.

Interviews and 911 call data from
other cities also suggest a spike in the numbers of people dying at home, a
circumstance that makes them less likely to be tested for the coronavirus or
included in the official death counts. For instance, the updates New York City
has made to its covid-19 death tolls include hundreds of such at-home deaths.

As of mid-April, paramedics for
the Chicago Fire Department were seeing about four times as many calls as usual
in which the patient is beyond resuscitation and pronounced dead at the scene,
spokesman Larry Langford said. Normally there are about four such cases; now,
some days, there are more than 20. In Detroit, as ProPublica has reported, 911
call data show that the number of calls coded “dead person observed” spiked in
the first 10 days of April.

But in dozens of states, the Yale
analysis shows that the reported number of overall deaths are either unchanged
or even slightly down compared with historical patterns.

In some states, the epidemic
started later and spread less quickly and so had killed few people as of early
April. Relatively small numbers of covid-19 deaths may have been offset by
decreases in fatal car accidents or other such traumatic events that are less
likely when people are sequestered in their homes.

Lags in the reporting of overall
deaths could also play a role, Weinberger said. Though the federal government’s
provisional death count through April 4 is more complete than its count for
more recent weeks, it remains incomplete, and the number of overall deaths is
likely to continue to rise in coming months as states report additional deaths
from those weeks. The number of overall deaths nationwide and in each
state won’t be known with confidence until
at least a year from now
, Weinberger said.

In Washington, the first state to
battle a large-scale outbreak, 310 people were originally reported to have died
of the virus as of April 4. The state has since published data showing that, in
fact, nearly 600 people had died of covid-19 as of that date. Because of the
state’s relatively robust testing and contact-tracing infrastructure, experts
say, the covid-19 death count there is likely more accurate than in other
states.

The overall number of deaths in
Washington during those weeks climbed by only about 100 over the number that
would normally be expected, according to the Yale analysis. That could be in
part because fewer people have been dying on the roads. Statewide, there have
been 34 fatal collisions in March and April to date — about half the usual
number for this time of year, according to data from 2018 and 2019.

There are signs that traffic fatalities are declining more
broadly. Data collected by ESO, a company that provides software for about a
third of EMS services nationwide, show a steep decline in calls for motor
vehicle accidents as stay-at-home orders have taken hold.

Crime patterns are changing in
some places, too. Miami did not report a single homicide for seven weeks and
six days, from mid-February to mid-April, police said. The last time the city
was free of homicides for that long was in 1957.

Gov. Ron DeSantis (R) has been
pushing to lift restrictions in Florida as soon as possible to reopen the
economy. According to the Yale estimate, the state had only a small number of
excess deaths through early April, about 200, and that number is almost equal
to the official covid-19 tally.

“We expect there is some level of
undercounting,” said Natalie Dean, a professor of biostatistics at the
University of Florida. “It’s clear we are missing deaths.”

In Louisiana, the Yale analysis
seems to run counter to what might be expected based on news headlines.

The state is enduring one of the
worst coronavirus outbreaks in the country after more than 1 million people
gathered for Mardi Gras festivities in New Orleans in February. The analysis
estimates, however, that although 408 people were reported to have died of
covid-19 by April 4, Louisiana had slightly fewer deaths overall than normal
during the preceding five weeks. According to the Yale team’s estimates,
Louisiana has recently been among the slower states to report deaths.

Joe Kanter, an assistant state
health officer for the Louisiana Department of Health, confirmed that as of the
end of March, the state had not yet seen a surge in deaths overall compared
with prior years. He said he believes that Louisiana’s covid-19 count is as
close to accurate as possible, pointing out that last week, the state began
reporting probable deaths in addition to those confirmed by lab tests.

But some officials in that state
say the coronavirus death toll will end up higher than is currently known,
according to emails obtained by Columbia University’s Brown Institute for Media
Innovation that were shared with The Post.

In an April 4 email, New Orleans
Health Director Jennifer Avegno noted a spike in paramedics’ reports of
deaths on scene and of cardiac arrests requiring advanced life support,

including CPR. The number of such reports in March was 24 percent higher than
it had been in March 2019.

“Thus I would probably add about
15% or so to the known death toll,” she wrote to two city officials. “However —
no city or state will be factoring this in or reporting it, so I don’t think we
should either. We should just assume that the deaths are about 15% more than we can count, but not
include them in official modeling, because we will never really know.”

In a phone interview on Thursday,
Avegno said she is concerned about elected officials across the country
reopening cities and states based on what she believes is an undercount of covid-19 cases and
deaths.

“I worry that the numbers give
them a false sense of security that
they may be communicating to the public,” she said. “They may think the number
of cases is more limited but they are not testing widely enough to know.”

Lenny Bernstein, Lenny Bronner,
Jacqueline Dupree, Aaron Steckelberg and Reis Thebault contributed to this
report.

Methodology

A research team led by the Yale
School of Public Health used historical data on all deaths between 2015 and
early 2020, published by the National Center for Health Statistics (NCHS), to
model the number of deaths that would normally be expected each week from March
1 to April 4. The estimate takes into account seasonal variations, intensity of
flu epidemics, as well as the expected increase in deaths due to overall
population growth.

Details on the team’s statistical
approach estimating seasonal baseline deaths can be found in an article posted
online at the preprint server medRxiv. The method used for this analysis
differs in that researchers did not attempt to correct for data reporting
delays, as they did for their previous article. Instead, the analysis for The
Post relied only on reported deaths, a more conservative approach to estimating
excess deaths.

The number of overall deaths in
the United States and for each state was obtained from provisional death data
published weekly by the NCHS, part of the Centers for Disease Control and
Prevention. Figures for Connecticut, North Carolina and the District were not
up-to-date, and those jurisdictions are not included in this analysis.

Those data are collected from
state health departments, which report deaths at different rates. It usually
takes about three weeks for death data to stabilize, but even then, they are
still not complete. As a result, it is expected that the numbers of total
deaths as of April 4 will continue to increase as states continue reporting
additional data to NCHS.

The number of excess deaths was
calculated by subtracting the expected seasonal baseline from the number of all
deaths. Because the seasonal baseline is an estimate, there is some uncertainty
associated with the excess-death figure of 15,400. Based only on the deaths
reported so far, there is a 90 percent chance that the actual number of excess
deaths is greater than 12,000, and a 70 percent chance that it is greater than
14,000.(There is a 2.5 percent chance that the actual number of excess deaths
is lower than 10,000, and an equal chance that it is higher than 20,000.)

The covid-19 death toll as of
April 4 comes from figures reported by state public health departments and
compiled by The Post.

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Saturday, April 25, 2020

Trump's Covid-19 Protest Response Is Unpresidential Even for Him - Bloomberg

Trump's Covid-19 Protest Response Is Unpresidential Even for Him - Bloomberg





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relates to Brazil Deserves Better Than Jair Bolsonaro

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relates to Branson Has Billions He Can’t Even Touch
relates to Can the U.S. Government Survive the Next Disaster?
relates to What Could Be Worse Than Coronavirus? Plenty
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relates to This Pandemic Is an Opportunity For Radical Simplification
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relates to Coronavirus Has Popped the Boeing and Airbus Bubble
relates to Developing Countries Shouldn’t Waste This Crisis
relates to Brazil Deserves Better Than Jair Bolsonaro

relates to Branson Has Billions He Can’t Even Touch
relates to Can the U.S. Government Survive the Next Disaster?
relates to What Could Be Worse Than Coronavirus? Plenty
relates to Kominers’s Conundrums: The Warden Has a Brainteaser
relates to Post-Pandemic, Governments May Rethink Everything
relates to This Pandemic Is an Opportunity For Radical Simplification
relates to Coronavirus Has Exposed the EU’s Creeping Irrelevance
relates to Coronavirus Has Popped the Boeing and Airbus Bubble
relates to Developing Countries Shouldn’t Waste This Crisis

Politics & Policy
Trump Is Breaking the Presidency to Save His
Re-Election
The presidency
was designed to unite the states, not further divide them.
By 
President Trump in the
foreground, President Jackson behind.

 Photographer:
Oliver Contreras/Getty Images
Noah Feldman is a
Bloomberg Opinion columnist and host of the podcast “Deep Background.” He is a
professor of law at Harvard University and was a clerk to U.S. Supreme Court
Justice David Souter. His books include “The Three Lives of James Madison:
Genius, Partisan, President.”

President
Donald Trump’s encouragement of protests against states’ stay-in-place orders
is un-presidential in the colloquial sense: it’s unbecoming of a president. But
Trump’s latest gambit is un-presidential in a much deeper sense, too. It
contradicts the very constitutional justification for why we have a president
in the first place.
The whole
point of the presidency is to have an elected official who represents the
interests of the entire country, not of a specific state or electoral district.
That is, the purpose of the presidency is unification. Trump’s goal, to the
contrary, is to drive state-by-state division. He’s undermining the very ideal
of a unified United States in pursuit of electoral advantage.
To
understand why we have a president, it’s useful to consider why we 
don’t have
a prime minister. After all, the founding fathers were creating a republic, in
which all officials would be elected and nobody would be above the law. If the
United States of America was not to have a king, it would have made logical sense
for its executive to be a member of the legislature, first among equals.
But the
framers of the Constitution wanted to create a different version of the
separation of powers than Britain’s. The president would not be a king, but he
and his executive branch would play some of the role that the king played in
the British constitution.
And the
chief advantage of a king, according to a theory that had gained prominence in
18th century Britain, was that he would promote the interests of not merely one
faction of the people, but of the whole country. A king who stood for everybody
was a “patriot king,” ruling for the greater good of the 
patria, or
nation. “To espouse no party, but to govern like the common father of his
people, is so essential to the character of a Patriot King, that he who does
otherwise forfeits the title,” wrote Henry St. John, First Viscount
Bolingbroke, in his aptly named book, “The Idea of a Patriot King.”

The framers of the U.S. Constitution designed a system in which
members of both the House of Representatives and the Senate were chosen from
the states. Although the framers expressed the hope that these legislators
would think of the whole nation, not just the districts they represented, they
were also realists. They understood that members of Congress would want to be
re-elected, and would therefore favor the interests of their home states and
districts.
The
president, in contrast, was elected nationally. He (along with the
vice-president) was the only elected official who could claim to have been
chosen by the whole people. The president was therefore supposed to be a
patriot president, above party or regional faction.
It turned
out to be too much to ask for presidents to eschew political parties. Even
George Washington, whom the framers expected to pull off that lofty goal, came
to be seen as a partisan Federalist by his second term in office.
Yet
presidents have, for the most part, managed to govern with an eye to national
interests, rather than regional ones. That may be attributed mostly to their
desire to be re-elected, which ordinarily takes a national coalition. But it
also stems from the nature of the office itself: The president is the chief
executive of the whole country, and usually understands himself as such.
The
classic example is Andrew Jackson, whom Trump claims to consider a hero.
Jackson was partisan and ideological, not to mention an advocate of killing
Native Americans and driving them from their ancestral lands. But when South
Carolina tried to nullify federal law, threatening the union, Jackson firmly
rejected the very idea, going so far as to intimate that any serious attempt at
disunion would be met with vigorous force. Jackson put union first.
Trump,
however, is now doing the very opposite. Instead of embracing the idea of a
unified national policy on stay-in-place orders, he is fomenting protests that
are meant to force certain states to break the mold by opening sooner than
others. The aim of the protests is precisely to create a national patchwork,
with different states adopting different policies. And Trump’s motives seem
straightforwardly partisan: he wants to motivate his base, and he wants to take
credit for any opening that eventually occurs.
The
problem isn’t that Trump wants to get re-elected. It’s that to get there, he is
actively seeking to break any semblance of coordinated, unified national
policy. He is, it seems, prepared to break the traditional presidency in order
to hold onto the office.
If the
presidency becomes a bully pulpit not to hold the country together but to break
it apart, we’d be better off having no president at all. Somewhere, the shade
of Andrew Jackson is roiling with disapproval.
This column does
not necessarily reflect the opinion of Bloomberg LP and its owners.
To contact the author of this story:

Noah Feldman at nfeldman7@bloomberg.net
To contact the editor responsible for this
story:

Sarah Green Carmichael at sgreencarmic@bloomberg.net
https://bcp.crwdcntrl.net/map/c=12392/tp=BLPI/tpid=67b520fb-5ef9-4c6d-bd84-d318a1ccf123https://bcp.crwdcntrl.net/map/c=12393/tp=BLGA/tpid=UA-11413116-1