This is really interesting.
We “may” be starting to unwind this bubble as we speak. Rather than “sellers” of stocks or tulip bulbs or crypto, it is governments going back to nuclear, Presidents finally and begrudgingly calling for “more drilling”. Maybe the pain of this bubble is the sky-high energy prices we are seeing around the globe that show no ability or reason to relent any time soon. Maybe the pain of this bubble is government policies aimed at unwinding the record inflation we are seeing and the Fed and other central banks around the world jacking up rates to levels not seen in multiple decades to fight it.
I’ve been saying it for some time now, unless we have one of the mildest winters of all time this year, there will be significant global pain felt by inhabitants. People who cannot cool their homes in the summer are just really uncomfortable, in the winter, they freeze. When this happens, let’s be perfectly clear, this will be solely the fault of governments around the globe and their policies. We HAVE the supply, we just can’t drill for it or transport it efficiently or effectively due to these policies.
Notice the question here is NOT whether or not the globe is warming. Rather, it is over what is the cause and whether have we unintentionally put ourselves, as an occupant of this planet in a very precarious position via our absolute certainty of the cause and then enacting incredibly far-reaching policy in response.
Q3 2022 hedge fund letters, conferences and more
“Davidson” submits:
Market psychology drives prices and even economic activity with little factual basis if enough buy into the fantasy. There have been several periods when themes grabbed investor imaginations and with little beyond that drove entire governments to participate stoking a path which later proved disastrous. History Channel lists 6 prominent financial collapses but periods of mania are present nearly every year. Only recently Theranos promised a leap in blood testing technology that proved a fraud in 2018 involving many intelligent prominent individuals and we should not ignore how the actions of three brothers, Nelson Bunker Hunt and his brothers William Herbert and Lamar. They were billionaires and decided to corner the silver market in 1979 and drove prices from $11oz to $50oz in Jan 1980 only to discover they were the only buyers. Two months later prices with no one else buying the price fell back to $11oz. They declared bankruptcy eventually. Bubbles come in all sizes and durations depending on the percentage of the population who participate. https://www.history.com/news/6-disastrous-economic-bubbles
- Tulipomania collapsed February 1637
- The South Sea Bubble collapsed late 1720 called “world’s first Ponzi scheme”
- The Mississippi Bubble collapsed 1720 another Ponzi scheme
- The Florida Land Boom collapsed late 1928 the original named Ponzi scheme run by Charles Ponzi
- Railway Mania leading to multi-year decline ending 1850
- The Wall Street Crash of 1929
One of the characteristics of each bubble is the lack of information that would normally moderate investor imaginings of enormous returns. Information brings speculation back to reality. When the subject matter requires expert translation into something simpler, regulatory capture by industries, media capture by advertising and individuals who benefit personally can drive non-factual themes that overwhelm society’s perspective. This can cause all to march to the same theme even though there is no supporting evidence. It is fed by the human tendency to trust experts. Such is “Global Warming”. This has morphed into an ESG (Environmental, Social, and Governance) investment drive with everyone having a different definition indicating no one really knows how to define what they mean. Just the same, financial firms have marketed funds, benchmarks and analysis systems for a fee so institutions can prove they are PC (Politically Correct). Advertising dollars have flooded the media and political campaigns adding fuel to this concept. “Global Warming” is a global money maker and the greatest bubble of all time.
The ”Global Warming Bubble” began well before Al Gore’s “inconvenient Truth”, 2006. He certainly brought an issue many discussed to the forefront. The claim that was made in the movie is that a rise in CO2 causes global temperatures to rise causing the poles to melt raising sea levels globally. The researchers globally demanded increases in government funding. Politicians and the media padded their own agendas claiming CO2’s impact is causing drought, crop failures, more violent storms and even earthquakes, tsunamis, and a rise in volcanic activity. The actual weather and event history supports no change or perhaps even a diminished pace. Gore’s claim was based on a chart of CO2 and temperature over less than 1million years and appeared to show a correlation. His claim was CO2 was causal, but the detail did not permit assessing whether CO2 caused temperature change or whether temperature change caused changes in CO2. Ignored was the 600 million record incorporating many decades of research by highly qualified scientists which indicated no correlation whatsoever. https://www.researchgate.net/figure/Geological-Timescale-Concentration-of-CO-and-temperature-fluctuation-Adapted-from_fig3_342589030
In 2002 Daniel H. Rothman, Department of Earth, Atmospheric, and Planetary Sciences, Massachusetts Institute of Technology, with a novel approach had the same conclusion. https://www.pnas.org/doi/10.1073/pnas.022055499Rothman’s conclusion: “The resulting CO2 signal exhibits no systematic correspondence with the geologic record of climatic variations at tectonic time scales.”
The public, politicians, industry, academia, and advertising ignored this body of evidence and went with “Inconvenient Truth” and the interpretation of a chart which did not reveal the claimed causality. Gore’s wealth has soared to more than $300million from climate advocacy. https://eelegal.org/the-new-american/ Claiming one is virtuous is profitable and many have followed Gore’s lead.
There are many voices speaking to critical analysis of the factual evidence which have not been able to gain recognition. Their funding has dried up, their research is not accepted for publication, and they are vilified as ‘climate deniers’. What is problematic is that the evidence supports the ‘climate deniers’ and not the consensus perspective leading to politicians demanding funding for “The Green New Deal”. The data is there for all to see at NOAA (National Oceanic and Atmospheric Administration) even as some NOAA researchers forecast calamity and demand more funding.
The NOAA data is simple to access and of a long enough duration to see the detail required to analyze the relationship between changes in sea level (warming) vs CO2. NOAA data for sea level from mid-1800s and CO2 from 1958, each scientifically accurate and not in dispute, display ZERO correlation. CO2 is estimated to have been in 280ppm +/- for 1,000yrs prior to 1900. Then a slow rise began, reaching 310ppm +/- in 1913 and remained roughly stable till the mid-1950s when Mauna Loa Observatory began sampling for the official global record. Charting the data makes it simple to visualize whether a correlation exists. There is no correlation. The sea level trend is not even disturbed a little by the rapid rise in CO2. This is as simple and as elegant a proof debunking the concept of global warming in plain sight available. The same lack of correlation occurs with every tide gauge globally. The Maldives government is asking for compensation claiming they fear flooding of their islands averaging elevation of only 2 m above sea level. Global sea level is rising 0.85mm/year. The Maldives are one of the lowest-lying countries in the world. At the current pace, it will take 2,300yrs+ for oceans to inundate this group of islands that is currently seeing a surge of hotel building to accommodate the rise in tourism. The Maldives government is only one of a long line of those demanding compensation from the US and other advanced economies which burn fossil fuels.
Governments are responding emotionally rather than make careful factual assessments. Europe has shut coal and nuclear electrical generation in favor of many billions spend on alternative energy sources which have failed when needed most. Industries have lobbied to expand and participate in this spending. Ignored has been well established record that the earth has been warming since the last glaciation period. Something else is behind the global temperature rise, not CO2. Every decision maker and Al Gore had ample resources to access the geologic record and the recent data. It seems that this was not in their personal interest to do so.
“Climate change’ has so taken over every one’s focus that trillions of dollars are demanded to remediate an issue exaggerated well out of proportion to common sense. “Global Warming” fear of “Climate Change” is today’s Tulipomania. History is replete with investor manias of returns seemingly guaranteed. The longer the build-up, the bigger the mania because it involves a larger percentage of the population. Now that every government, financial firm, media outlet and industry are fully committed with every option to profit being met with a product or a service, the eventual realization of what the facts truly are will catch many unprepared.
‘Global Warming’ will prove the greatest financial bubble ever in my opinion. It will take several years for enough people to recognize the existing facts such is the current momentum. One must exercise caution. One will need to invest or miss out on opportunities that can leave one well behind the market’s return, but one has to be ever vigilant for the turn. It like all bubble collapses will prove very painful.
Links:
https://tidesandcurrents.noaa.gov/waterlevels.html?id=8518750&units=standard&bdate=18560101&edate=20220101&timezone=GMT&datum=MLLW&interval=m&action=data
https://gml.noaa.gov/ccgg/trends/data.html
