Baltic Dry Index. 1763 +90 Brent Crude 64.54
Spot Gold 1716
Coronavirus Cases 02/04/20 World 1,000,000
Deaths 53,100
Coronavirus Cases 04/03/21 World 115,769,094
Deaths 2,571,794
"Oh, what a tangled web we weave, when first we practice to deceive!"
Sir Walter Scott, 1808
Another day and it’s all change. Bond yields up again, stocks down. With stock mania under pressure and fading fast, can Fed Chairman Powell talk up stocks and talk down bond yields later today?
And if he can’t? Black Friday?
This is no way to run the casino.
Rising bond yields spook world shares as investors look to Powell
March 4, 2021 12:13 AM By Hideyuki Sano
TOKYO (Reuters) - Resurgent worries about rising U.S. bond yields hit global shares on Thursday as investors waited to see if Federal Reserve Chair Jerome Powell will address concerns about the risk of a rapid rise in long-term borrowing costs.
The spectre of higher U.S. bond yields also undermined low-yielding, safe-haven assets, such as the yen, the Swiss franc and gold.
Benchmark 10-year U.S. Treasuries rose to 1.477% as investors bet U.S. inflation could pick up as an economic recovery gathers steam, driven by government stimulus and further progress in vaccination programmes.
“It is not clear how the Fed wants to deal with bond yields,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities.
“The pace of rises in yields has been far faster than most people have expected and there’s speculation the authorities may be starting to think about tightening their policy.”
The MSCI’s ex-Japan Asian-Pacific shares lost 1.7% in early trade while Japan’s Nikkei fell 1.9%.
E-mini S&P futures slipped 0.4% while the futures for the Nasdaq, the unequivocal leader of the post-pandemic rally, fell 0.6% to a two-month low.
Tech shares are vulnerable because their lofty valuation has been supported by expectations of a prolonged period of low interest rates.
Powell is due to speak at 12:05 p.m. EST (1705 GMT). Many Fed officials have downplayed the rise in Treasury yields in recent days, although Fed Governor Lael Brainard on Tuesday acknowledged concerns over the possibility a rapid rise in yields could dampen economic activity.
The market will have to grapple with a huge increase in debt sales after rounds of stimulus to deal with a recession triggered by the pandemic.
The issue is not limited to the United States, with the 10-year UK Gilts yield jumping back to 0.779%, near its 11-month high of 0.836% hit last week, after the government unveiled much higher borrowing.
Currency investors continued to snap up dollars as they bet on a U.S. economy outshining its peers in the developed world in coming months. [USD/]
The dollar rose to a seven-month high of 107.16 yen.
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Next, once upon a time in a faraway, Democrat run land, they invented free money for all, forever. Or did they?
In Democrats’ progressive paradise, borrowing is free, spending pays for itself, and interest rates never rise
A warning — and a farewell — from our longtime economic columnist
Steven Pearlstein March 3, 2021.
To hear it from liberal economists, progressive activists and Democratic politicians, there is no longer any limit to how much money government can borrow and spend and print.
In this new economy, we no longer have to worry that stock prices might climb so high, or companies take on so much debt, that a financial crisis might ensue. In this world without trade-offs, we can shut down the fossil fuel industry and transition to a zero-carbon economy without any risk to employment and economic growth. Nor is there any amount of infrastructure investment that could possibly exceed the capacity of the construction industry to absorb it.
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https://www.washingtonpost.com/business/2021/03/03/democrats-stimulus-spending-inflation/
In yet more Texas fallout from the Great Global Warming Texas Freeze, more electric companies can’t or won’t pay their bills. Sounds like another bailout is needed, but from whom?
Texas power grid names firms with unpaid bills, cuts off second
March 4, 2021 12:48 AM By Gary McWilliams
HOUSTON (Reuters) - Texas’ power grid operator on Wednesday cited 12 energy companies and two municipal utilities for failure to pay their bills for power and services during February’s deadly blackout that has led to the ouster of the operator’s chief executive.
The companies and utilities owe $2.21 billion for power and services during the storm, the Electric Reliability Council of Texas (ERCOT), which runs the grid providing electricity to 90% of state residents, said.
In response to the blackouts, some of which ERCOT imposed to balance the grid after freezing generators went offline, the operator ousted Chief Executive Bill Magness, following calls for his resignation by state lawmakers.
The winter storm created a surge in electricity demand that overwhelmed the grid at the same time the cold temperatures and other faults knocked out nearly half the state’s power plants. High prices for emergency fuel and power saddled the companies that sell, transmit and generate electricity in the state with about $47 billion in costs, an official estimated.
Texas consumers will see higher prices as the storm-related charges and unpaid fees are passed along to remaining providers.
---- The largest of ERCOT’s 14 debtors, Brazos Electric Power Cooperative Inc, filed for bankruptcy on Monday listing $1.8 billion owed to ERCOT. A Brazos spokesman did not reply to requests for comment.
The second-largest ERCOT debtor, Entrust Energy Inc, on Wednesday became the second electric provider cut from the grid in five days. It owed nearly $234,000. Entrust did not reply to a request for comment after normal business hours.
The first company dropped from the grid, Griddy Energy LLC, had its customers moved to other providers after failing to pay an undisclosed amount.
Vinnie Campo, the general manager of renewable power marketer Bulb US, said this week that he supports a proposal before the state’s Public Utility Commission to roll back some $2 billion in service fees.
Bulb was cited on Tuesday as being $30,800 short on grid payments. However, a company spokeswoman said that amount was paid. Wednesday’s list of debtors showed Bulb was $5.1 million in arrears on its ERCOT bills.
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Finally, who needs the bureaucratic EUSSR? Inward investment flows where investors perceive an attractive risk/reward balance.
I’m sceptical on carbon capture, but the nat. gas to hydrogen twist makes this project more interesting.
Japan's Mitsui to invest in UK carbon capture project
March 3, 2021 12:13 PM By Reuters Staff
LONDON, March 3 (Reuters) - Japanese trading house Mitsui & Co Ltd said on Wednesday it would invest in the development of a carbon capture and storage (CCS) project in Britain.
The Japanese company will take a 15.4% share in Storegga Geotechnologies which is developing the Acorn CCS project to store carbon dioxide emissions in depleted North Sea oil and gas reservoirs.
CCS traps emissions and buries them underground but is not yet at the commercialisation stage.
The project is being led by a wholly-owned subsidiary of Storegga Geotechnologies, Pale Blue Dot Energy, with support from Macquarie Group with a 21.5% shareholding and Singapore sovereign wealth fund GIC with a 15.4% shareholding.
The project is expected to be operational by the mid-2020s and will capture some of the 340,000 tonnes of CO2 emissions at the St Fergus gas terminal.
There will also be a project there to convert North Sea natural gas into hydrogen and the CO2 emissions will be captured by CCS. The hydrogen will be used in transport applications, and in gas grids to decarbonise heating in homes and industries.
https://www.reuters.com/article/mitsui-co-ccs-idUSL2N2L10YV
Hydrogen Is ‘Jump Ball’ in Global Clean-Energy Race, Kerry Says
Jennifer A Dlouhy March 2, 2021
The U.S. oil and gas industry should embrace “huge opportunities” in producing and transporting hydrogen, with the potential for that cutting-edge energy source to fuel long-haul trucks and supply power globally, presidential climate envoy John Kerry said Tuesday.
“That’s jump ball right now,” Kerry said during the second day of the CERAWeek conference by IHS Markit. “The test is going to be how do we produce the hydrogen in a way that isn’t so damaging and carbon-intensive.”
President Joe Biden has extolled the climate potential of hydrogen, which is widely seen as a lower-carbon alternative to natural gas in fueling power plants and vehicles. While most of it is currently extracted from gas, there’s a push to use renewable energy to make the fuel from water, which wouldn’t generate carbon emissions. Oil and gas companies have “incredible infrastructure” to transport hydrogen, Kerry said.
Kerry, who is leading U.S. efforts to encourage more aggressive emissions-cutting commitments under the Paris agreement, said the Biden administration will push China on the issue, even as it confronts the world’s top greenhouse-gas emitter over trade and intellectual property concerns.
“There are tensions today that did not exist back then,” but “we can deal with this as a compartmentalized issue,” Kerry said. “The climate crisis is not something that can fall victim to those other concerns and contests, because China is 30% of all the world’s emissions.”
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But is hydrogen really “green” and is it real or a mirage and a bottomless money hole?
Why the hydrogen hype may be overblown
For those who lived through the tech bubble of the late 1990s, the renewed enthusiasm for all things hydrogen has likely brought a sense of déjà vu.
Two decades after fuel cell mania sent shares of companies such as Vancouver-based Ballard Power Systems Inc. soaring – only to crash when the technology failed to live up to its promise for commercialization – investors are betting that the time has finally come for the universe’s most abundant element to play an important role in tackling climate change.
“It really is a case that 20 years ago hydrogen looked interesting but was ahead of the time,” said John Bereznicki, an analyst with Canaccord Genuity in Calgary. “The political will to decarbonize has evolved.”
In December, the federal government released its hydrogen strategy – an ambitious vision for Canada’s low-carbon future that foresees clean hydrogen providing 30 per cent of the country’s energy needs by 2050. That’s the target year the Trudeau government has set for Canada to meet its goal of achieving net-zero emissions.
Hydrogen is already widely used in industries to refine petroleum, process metals and produce fertilizer, though the source of that hydrogen is far from clean. Known as grey hydrogen, most is produced by burning natural gas, which emits carbon dioxide into the atmosphere.
“Hydrogen only makes sense if it is low- or zero-carbon energy source,” said Simon Dyer, deputy executive director of the Pembina Institute. “Hydrogen by itself is not a climate solution, unless you can deal with the emissions associated with its production.”
More
https://www.theglobeandmail.com/featured-reports/article-why-the-hydrogen-hype-may-be-overblown/
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