#Forbes - BIG #OIL Battles #Insurance Over Climate Hoax?

Rift Widening Between Energy And Insurance Industries Over Climate Change

By Ken Silverstein


(Forbes) – Being a big business, the insurance industry is a strong backer of free enterprise and its laissez-faire leaders. But a rift could be developing now that some major carriers are staking claims in the climate change cause while many of their congressional backers have remained skeptical of the science.


For insurers, it’s not about the political machinations but rather, it’s about the potential economic losses. If even part of the predictions hold — the ones released by the Intergovernmental Panel On Climate Change that ascribe temperature change to humans with 95 percent certainty — then the rate of extreme weather events will only increase and the effects would be more severe. That, in turn, would lead to greater damages and more payouts.


“The heavy losses caused by weather-related natural catastrophes in the USA showed that greater loss-prevention efforts are needed,” says Munich Re Munich Re board member Torsen Jeworrek.


He says that the United States suffered $400 billion in weather-related damages in 2011 and insured losses of $119 billion, which were record amounts. In 2012 — and despite Superstorm Sandy — losses were well above the 10-year averages at $165 billion total, of which insurers paid $50 billion. In 2013, insurance companies paid out, globally, $45 billion in claims, says Zurich-based Swiss Reinsurance Co., adding that the United States accounted for $19 billion of that.


Meantime, Standard & Poor’s Ratings Services just issued a report saying that the credit ratings of sovereign countries would be affected by global warming. It pointed to Typhoon Haiyan in the Philippines, heavy flooding in Great Britain and the record cold temperatures this past winter in the United States, all of which caused economic damages and disrupted business practices.

But it adds that the developing nations in Africa and Asia are most at risk, namely because they are low-lying regions that are heavily reliant on farming and agriculture. At the same time, they are not in a financial position to handle catastrophic events. 



Read More 

By the way...

It is all just a Hoax?

 

Doc's Comments:

Two titans are in conflict over the economic implications of climate change. Big OIL takes the sick position that all the science is just a hoax, while Big INSURERS are saying it is very real. We know - because we are paying out the claims that are beginning to rise dramatically.

 

The time has come to nationalize all oil companies worldwide in order to bring a sense of human responsibility to the activities of this industry. The TIME  has come  to slay the Six Evil Dragons. Period!

 

Dr. Peter G Kinesa

May 23, 2014  

Where Have All the Fish GONE?

Where Have All the Fish GONE?

Can you believe it? Not only are we running out of oil and many other non-renewable resources, but soon; it seems, we will also be runnung out of fish. This is much more than a staple, as fish has provided many dietary essentials, including protein, to places food alternatives are in short supply  So if you have some free time this weekend, you may want to do a quick read of the FAO report (linked above) which also covers many other foodstocks.

Recreational fishing may be a thing of the past in a few short decades or years, however the bigger concern is that populations continue to grow, while fish are dwindling in supply. Albeit there are some positive signs that with proper management some stocks have improved.  Nonetheless it is something else to think about.

Dr Peter G Kinesa

July 12, 2013 

WHAT! You mean they ate them ALL??? 

   

Sign in Egypt protest: “Wake up America, Obama backs a fascist regime in Egypt.” (Picture) | AgainstCronyCapitalism.org

Sign in Egypt protest: “Wake up America, Obama backs a fascist regime in Egypt.” (Picture) | AgainstCronyCapitalism.org

LANGUAGE TRANSLATION:

 "Feed them meat and potatoes"

What never ceases to amaze us is how everyone thinks this is all about ideology - what label would you like me to wear? Unless my belly is comfy; whatever politics, theology or economics you preach, you will not convince me or anyone else for that matter. Then once it is full. you have the opportunity to tell everyone why your way is the best way, and how it can and will be done forever. Then it becomes hard to fight the eternal benefits you promise with ideology through the narratives of science or logic. Who wants to give up a shot at eternity? So, almost everyone hedges their bets and buys into a label. Such is a simple view of life, from introspective nutshells -

Back to Egypt. Here again we can see that the real issue is "meat and potatoes." Seems as if they don't have enough to feed their ever expanding masses; they thus are prepared to follow anyone with a here-and-now solution, then worry about a bunch of tomorrows at some other convenient time. That makes sense.

Unfortunately, Egypt is on the growing list of Nauru Paradigm Countries, whereby the populations have overshot the delivery capacities of their physical economies - leading to shortages of just about everything needed to survive. Sadly, the WTO, IMF, World Bank, EU and leading economists and politicians have placed all of their bets on the abstractionist's economic models and are thereby insanely stoking the flames. When will they ever wake up?

So add Egypt to our coveted list of countries facing the final stages of the Nauru Paradigm, a nation that will now play out the Animal Farm parody for years to come, as long as incoming revolutionary leaders subscribe to outdated neo-classical economic theories - (Stories?) - they are guaranteed short careers in a shrinking world.



Dr Peter G Kinesa
July 5, 2013 

Egypt or Nauru: More Animal Farms?

Feeding the Dragon:Why China's Credit System Looks Vulnerable

Feeding the Dragon: Why China's Credit System Looks Vulnerable

click above

THE BIG MAMA OF ALL CREDIT CRUNCHES

This article reflects a Chinese financial system that is on the brink of a biblical credit collapse   - "The Big Mama of all Credit Crunches"  To be expected, from a system that operates on the outermost margins in every respect and oppresses its population in order to support a elite few who run and control the "party" (pun intended). An oppression that has been well documented by the Epoch Time; Nine Commentaries on the Communist Party, and many others. 

As history has proven regimes like this, (the former Soviet Union being a recent example) fall apart from within, due to inefficiencies, atrophy, and wasteful policies that are unsustainable physically, politically, socially and morally. Briefly, here is a short list of items that should draw deep concerns from all investors, businesses, economists and world leaders.

Oppression of human rights, dignity, freedom of information and expression are the hallmarks of an  evil totalitarian system leading to ruthless atrocities for which there is no accountability. We need to look no further than the controls that are placed over the Internet to see clear evidence of restrictive tactics over information and communication flows as indicators of a totaltarian attitude.

Lack of financial transparency is pervasive to domestic, private and government accounting systems and numeric outputs. No faith, whatsoever, can be placed on any the financial or economic information generated by these entities. They are all students of the Bernie Madoff's School of Accounting - and we know, when unregulated, where that leads. 

China is desperate for non-renewable resources in order to sustain its inefficient economic system and unsustainable growth. Its simple self-evident strategy of exploiting it massive labour pool, to achieve huge pricing advantages on exported goods creating trade surpluses, then realizing billions in US treasuries, that are in turn used to buy resource based entities around the world is clear. China also perverts capitalism's principles, by using Sovereign Funds, that are not comparable to corporations in any way. They have no accountability to stakeholders, markets or financial measures of success - thereby, undermining all concepts of free, fair and open trade and related principles of comparative advantage. Where is Mr. Krugman when we really need him?  Where is the Conscience of a Liberal? 

China's currency is also fixed to the US dollar, given it an unfair advantage in trade that allows it to maintain this economic-political strategy of labour exploitation and oppression, leading to the reserves of US currencies needed to secure supplies of non-renewable resources. It works to the party's primary advantage, with little trickle down to the people of the country. 

Who should complain? Not North America because it too benefits from the cheap exploited labour with lower cost good on the shelves at Walmart, Costco, Target and others, hence containing domestic inflation and low interest at the Fed and other Central Banks. The other big losers however have also been the hard-working American union members and middle class that forged the spirit and heartland of a great nation. Their jobs and way of life were traded away by these unsavoury business practices.

Low interest rates also lead to high asset valuations in Western nations and can thus be tied to the cheap labour exploitation of millions and massive loss of American jobs - so everyone (elites?) had or has an interest in maintaining the status quo of these trade practices, even though they are definitely unsustainable while benefiting so very few on both sides of the Great Wall.

Water shortages are becoming headline news; the importing of water is becoming essential to feeding the Chinese economic machine. Pollution, unbridled and unregulated economic growth are the drivers behind this need. Water and oil are the two essentials of modern industrial-consumer complexes, shortages as Jim Rogers so astutely  noted will lead to wars. There are no reasons to doubt Mr. Rogers conclusions. No reasons.

Add further, the climatic chaos created by the growth economic mantra and you do nothing but reduce the supplies of fresh water through pollution, warming and upheaval of the natural systems of the planet. Without fresh water supplies, you cannot feed people, armies or politicians - the final outcome is not hard to figure out.

Gorbachev recognized that the Soviet Union was doomed and could not compete with the West because it did not have the accounting measures to manage responsibility centres at all levels of enterprise. Without management accounting measures, you cannot manage what is not measured; leading to sloth, inefficiencies, moral bankruptcy and wide-spread corruption. Ultimately, the Soviet Union's system collapsed and Glasnost was needed to bring transparency, democracy and accountability to its economic and political systems.

Today, there is growing evidence that the Chinese system also suffers from the lack of accountability along with the management and financial yardsticks needed to properly manage its economic, social and environmental activities. Ghost cities, tell us that there is little expectation of economic payback or return on investment for such projects. Pollution pervades all aspects of life, leading to huge long-term health and environmental concerns; eventually they impede all forms of industrial and agricultural activity. Add to this, the poor management of national finances such as, gold purchases at historically high prices, over-exposure to US treasuries and above market purchases of resource companies by Sovereign Funds, are a few of the disconcerting practices that infer a lack of financial controls and understanding. 

Synthesizing the analysis, we should bear in mind a number of considerations:

One, at the meta-economic level the hard constraints of a finite planet will prevail on exponential economic growth in resource depletion and over-population. No nation can escape the consequential  pending disaster to occur when the fragile balance of populations, resources and the bio-sphere is broken and lost forever. 

Two, the business cycle of expansion and contraction comes into play sooner or later, with its unavoidable reversion to the mean theory. Thus, when China faces this mathematical reversion, after extreme growth rates - the other side of the equation could be just as powerful to the detrimental contraction side of activities .

Three, leverage is a useful and beneficial way to spark accelerated growth making everything look easy at the time. But, the when the wheels come off, the downward push is even faster and harder. Every generation, it seems, must relearn the perils of debt and how their related bubbles have created untold pain and suffering when the party came to an end.

Four, societies where oppression and corruption are everyday parts of life, with little in the way of transparency and accountability, do not survive. Internal and external forces historically come to bear, that results in dramatic social, political and economic changes - this is a law of nature that returns systems back to the their equilibrium. In China's case; this could be termed as a return to a balance between its cultural Ying and Yang!   

What we see then is a system that has many deep troubles, where possible unrests and breakages could occur at any moment, with its credit leverage fuelling a " The Big Mama of all Credit Crunches" that changes and brings about a long overdue Glasnost  to a nation that has been operating far beyond its equilibriums of Ying and Yang in so many respects. That, by rules of nature, must revert to the mean.

The rest of the world should be prepared for major adjustments when this dragon lies slain by the consequences of its unsustainable beliefs and practices. To be forewarned, is to be thusly forearmed.

Dr Peter G Kinesa
May 10, 2013      

Chinese Credit Crunch - Dragon Slayer

Against Crony Capitalism -The gap between rich and poor will continue to grow until we give up on QE

Against Crony Capitalism - The gap between rich and poor will continue to grow until we give up on QE

Let me just say that this is an interesting read, but I do not believe that there is any cause and effect relationship between QE and the wealth gap. This is a gap that has been growing long before QE was a glimmer in Bernanke's eyes. 

American social decay has been going on since WW II and shows no signs of abatement. Look at the disgraceful conditions of their cities, physical infrastructures and superficial cultural Combined suggesting there is little hope in the context of its current frameworks and leadership anything will ever change. In fact even if they wanted to, there is no more pie to pass around and share as humanity is past "peak everything" . 

How really dumb is the situation? Well America continues to encourage more immigration that creates larger ghettos of poor folks, knowing full well the resources needed to feed these tens of millions more; just won't be there in ten years or so. But the Rich do enjoy interim benefits. So, expect a class war leading to a possible reconfiguration of the states into sovereign regional governments - this is starting to look more plausible as the gap between rich and poor grows. Also when you think about Texas's lone star ambitions.

Historically, feeding cake crumbs does not stop the barbarians at the gates. Storms are beyond control when the wealth gap is too big, for too long. Winds of revolution are stirring.

Dr Peter G Kinesa
May  16, 2013 

When will they storm the Bastille?

FIRST FINANCIAL INSIGHTS: TOP TEN INTERNATIONAL FINANCE AND ECONOMIC BLOGS

FIRST FINANCIAL INSIGHTS: TOP TEN INTERNATIONAL FINANCE AND ECONOMIC BLOGS:

TOP TEN INTERNATIONAL FINANCE AND ECONOMIC BLOGS "journeying to co-existing realities" Less than two years ago we s...

Sustainable? Longevity? The issues we face are common sense, but have been ignored for too long. Perhaps the problem with common sense it is that it is just not that common. Or we live in different co-existing realities. Pick your reason.

Dr Peter G Kinesa
April 16, 2013

Ever wonder who's right? 

The Boston Globe - Chief of US Pacific Forces Calls Climate Biggest Worry

Chief of US Pacific Forces Calls Climate Biggest Worry 

click above

When the US military realizes and states that climate change is one of the greatest threats to security we should be very concerned. Particularly, when we considered that often coined oxymoron " Military Intelligence" . Think about how much it takes these guys to figure things out, after all these years?

Enough said,  and let's have Admiral Samuel Locklear tell us about their profound "Ah Ha" moment -  I don't want to rain on their parade.

Dr Peter G Kinesa
April  15, 2013   

"Folks, you will never believe what I am about to tell you... " 

China Feels Inflation, CPI Spikes

China Feels Inflation, CPI Spikes

Before getting into the deeper issues - the first thing to put on the table is the CPI number itself. Who believes any financial number coming out of China?
Who believes that an economy can grow at 5,7 or 10% without experiencing any inflation? Who believes that an economy with excessive liquidity can hold prices down? Then there's the growing need to import more and more commodities... well, you can decide this one.

The real concern is whether currency games are going to become the new form of protectionism - a new form of trade war. With so many countries debasing their currencies - global inflation is certain to follow as more funny sovereign paper will be needed to buy real things. Now if we take the abstracts out of all this and remember that we are past peak everything  - prices of all commodities are sure  to climb dramatically. Some will be more intense than others.

Chinese inflation - you can bet the farm on it. But it is the new protectionism we are most concerned about and the trade of cheap, oppressed labour for scarcer resources. Who will level the playing field now?

Dr Peter G Kinesa
April 14, 2013

How's about a level playing field too?

  

Marc Faber BLOG: The Market will push Interest Rates Higher

Marc Faber Blog : The Market will push Interest Rates Higher

In this video interview with Marc he suggests that markets could push rates higher regardless of what the FED does. So far, the FED has been winning the war with the markets as it throws liquidity into the banking system. And as Marc observes, little has trickled into the real economy. Raising the question as to whether the bank bail-outs are still on-going?

Are Bonds in a bubble? Let's try some simple calculations assuming that in ten years rates will normalize back to 6.4% and inflation averages a modest 4.2% over this period. We will use 30 year treasuries that are currently yielding 3.2% on a simple interest basis.

Cash yield from $10,000 Bond @ 3.2% =    $320
Inflationary cost of holding @ 4.2%       =    $420   
Principal loss due rate mean reversion =    $500 

EXPECTED LOSS HOLDING IN 10yrs =  $600?

Wow! This means on a simple interest basis, the bonds pay a negative 6% a year, assuming a modest inflation rate and a return of interest rates to normal levels. This may be a best case calculation, as higher inflation rates are more likely to occur, with the pundits expected shortages in key raw industrial materials along with the climatic impacts on food and water costs. 

Anyway, something to think about along with using shorts on Bonds as an inflation hedge. Hmm.

Dr Peter G Kinesa
March 15, 2013

When will it Burst?

Marc Faber - A Correction Could Start Any Day

Marc Faber - A Correction Could Start Any Day

But remember, no one rings a bell at bottom nor blows a horn at the top. So what's likely to trigger a real sell off of in the markets? Our best guess is: Bonds, Bonds, Bonds - so how goes the bond market should bring the equities along with them. However, equities appear to be discounting earnings at a 5-6% cap rate with overall PEs hovering near multiples of 18 . Whereas, if the bond markets were expected to hold rates at 2-3%, then PE multiples should be approaching 35 to 40 times earnings. Hmm...

This is an interesting case where the equities are pricing in real inflation and telling us the bond market isn't, and thereby as everyone pretty much knows - overprices the Bonds. The downside on equities should therefore not be as gruesome, unless a much more dramatic move in rates occurs. 

Still remember too, that interest rate increases pose a double hazard to stocks as they attack earnings and cap rates, concurrently. Such are the perils of "Valuation Traps" and explain why countries look to debase their currencies in order to hold notional asset values domestically while retaining global trade advantages. Be sure to keep a eye on Japan as they have been trying to find an escape hatch from the trap for more than a decade. 

Dr Peter G Kinesa
March 4, 2013 

So who has the horns?  

INVESTORS' INSIGHTS - Marc Faber - 2013 Gold Price Prediction

INVESTORS' INSIGHTS - March 1, 2013

When the staffers over at First Financial Insights sent me this post before its release earlier today, I almost died from the laughing. I don't know what is funnier: seeing ole Bernie in his new digs or the idea that Mr Faber has painted himself into a golden corner. We now expect regular updates on his holdings, along with an audit report from one of the Big Firms, this time.

Anyway, I got such a big kick out of it - I wanted to be fair by sharing it with my fellow "Kinesanites."

Dr Peter G Kinesa
March 1, 2013

P.S.  Thanks to the staffers over at  FFI for the laugh - keep it coming. Pete.

Laughing Kinesanite.

Marc Faber - 2013 Gold Price Prediction

Now this video gives us a little insight into why he is carrying so much Gold in his own portfolio -25%. So now, you can see why he is so eager to have us buy more and protect his position. Otherwise, if we do the opposite and sell all our holdings - then our poor Mr. Faber faces unkind losses and embarrassment. All this could also lead to a career change for our dearest unbiased advisor.

By the way, will you tell us Marc when you decide to sell or reduce this position before you actually do? Hmm...

Madoff get back in the cage -

First Financial Insights
March 1, 2013 

"Believe me, I told you 25% is in Gold"

Home Sweet Home

What could go wrong with the housing recovery in 2013?

What Could go Wrong with the US Housing Recovery in 2013?

Lots. Read and analyze these charts for yourself in the linked blog. Housing bubbles, particularly like the kind leading up to 2008 meltdown, do not correct themselves in just a few short years. This is at least a decade long struggle, that will be further hindered by increases in rates at some point, collapsing all asset values. And hence, all forms of construction.

Then there's the ripple effects on renovations, big box retail, industry employment and so on. This is a huge hangover for Main Street, caused by he biggest party of drunken Wall Street sailors in history. Yet, NO ONE WENT TO JAIL...

Ain't that America. Little pink houses for you and me.

Dr Peter G Kinesa
February 25, 2013

Ain't that America, for you and me?

Detroit Continues Its Descent into the World of Mad Max

Detroit Continues Its Descent into the World of Mad Max

WHAT HAPPENED?

Want to look into the future? America's future? The global future? Then look no further than Detroit. Or Newark, Buffalo. Akron, New Orleans or many other American cities. And we can ask so many questions? Like why do they look like Third World nations? Is this really the richest country on Earth? Or how's about a simple; What happened to America?

If anything tells us that the metrics used by economists; measures such as GDP, are meaningless as a means of managing real world activties, then these everyday examples of inner city decay, should prove the point beyond any doubt. Sure it is well documented that Americans migrated to the cozy suburbs miles from the cities, as the automobile provided a means of escape. But add to this, the stripping away of the industrial heartland by Walmart and China, the shifting to a service-based economy, and the conversion of homes into ATM machines; these all created and contibuted to this civil destruction. So the crabs that are now left in the inner-city barrel, have  little hope of rising above theses dark depressed streets of despair - the streetcar named desire does not travel their anymore. Stellaaaa...

Some believe that these cities will be revived when gas prices drive the automobile to its inevitable extinction. But will the jobs return  to these cities? Will the manufacturing base return back from China? Unlikely, as the scarcity of  raw materials is going to make any sort of manufacturing anywhere on this planet difficult. In the end, the only thing still missing from this permanent picture of the American Dream and Global future is - MAX!

And how sad, this all is...

Dr Peter G Kinesa
February 21, 2013   

Who will run our cities?

  

Paul Krugman - Currency War Confusions

Paul Krugman - Currency War Confusion  OR Just the Same Old BS

(click here)

The New York Times, February 15, 2013 

Why do I state over and over again that all the leading economist just don't get it? In fact, they are all wrong? Take this declaration, phrased as a question by Paul Krugman in his OP/ED, and you will understand why I remain appalled at how these leading experts show a lack of foresight or understanding of the human predicament. The blatant discounting of the laws of physics and exponential mathematics drives one to frustration. And I could go on and on and on...

Enough weeping, here it is:

"Expansionary policy is what the world needs, so why is this a bad thing?"

Because it is the last thing the world needs. The world does not need to use its scarce non-renewable resources more rapidly. The world does not need to grow its population and feed more hungry mouths. The world does not need to add further pollutants into the fragile bio-sphere.The world does need, as a result, to pollute and use its fresh water supplies and contract the long-term capacity of its agricultural lands - lands needed to feed those expanding populations. In short Paul, the last thing the world needs is an expansionary policy because it is a very bad thing that accelerates humanity's march towards a premature extinction.

Of course all of these things are just caused by the constraints created  by physics, biology, mathematics -  those technical concerns. They cannot be negotiated, legislated or dreamed away, so why should the contraints of these constructs have anything to do with economics? Gets me! 

To tell everyone a personal secret - I spend many late restless nights in bed wondering two things; one, do these so-called experts really not understand the inter-face and integration that exists with the constraints of science, logic and mathematics, and their resultant consequences? Or two; if they do, do they have any guilt or human remorse about  promoting and writing all their outdated "Bullshit" that leads humanity into the insane abyss of self-destruction. I wonder.

Again, just telling it like is.

Dr Peter G Kinesa
February 16, 2013

"From Madison Square Gardens, in NewYork, this is Peter Kinesa telling it..."

Jim Rogers : I have my money invested mainly in natural resources and currencies

Jim Rogers : I have my money invested mainly in natural resources and currencies

Jim what happened to your farms in Iowa? Noticeably there is no mention of stock and bonds. 

Why? Despite what John Bogle from Vanguard professes, stocks and bonds are set for an unprecedented collapse in values once the inflation demons and rising interest rates ravage their valuations back to never never land. John has no touch with the physical realities of our times and cannot see the onset of a market collapse that few investors may ever recover from. 

So John stick to your charts, trends and speculations and we will bet on the existential realities that determine the real values required to sustain the human enterprise. Values that operate under the governing laws of physics and mathematics. Laws that cannot be negotiated, regulated or speculated away by Vanguards, Buffets or Goldman Sachs. Laws that will dictate the few winners and many losers.

Oh yeah, by the way, we like Jim's approach; but where's the farm?

Dr Peter G Kinesa
February 7, 2013 

Vanguard to launch new FARM FUND?

 

Marc Faber : In a Negative Real Interest Environement Some Assets could go Ballistic on the upside

Marc Faber : In a Negative Real Interest Environment Some Assets could go Ballistic on the upside

Think about what this means in a practical way. Investors and savers are now paying banks, governments and institutions to hold their money. Are there no real investments or savings vehicles that provide a risk free return? Why are there no such vehicles? Quite simply, one could conclude that there are few legitimate investment and business opportunities  -  and they expect the ones available, to lose more than the negative returns offered by the banks etc.

There is a profound message here. Nobody believes that the economy in abstract terms will improve, while high expectations also exist for asset values to collapse, Well, the mathematics supports this conclusion, as when the rate on 30 year bonds rises from 1% to 2%, 3% or worse; the market value of these bonds stumbles by 50% or more.

Moreover, we all know that rates cannot be sustained at this level forever, as lurking behind the curtains is a bogey man-- cost driven inflation caused by fewer resources and higher populations' demand. The whole situation just does not pencil out using the abstract conventions of failed neo-classical economics.

Buying a farm is beginning to look like the most prudent course - just make sure you control the country too.

Dr Peter G Kinesa
December 12, 2012

Ole MacDonald had a farm...