The Market Ticker
Commentary on The Capital Markets- Category [Editorial]
2017-09-19 07:00 by Karl Denninger
in Editorial , 178 references
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What do you get when you reduce diversity of generation of electricity, take offline nuclear plants, demand that nobody use coal any more, and otherwise restrict where power comes from so you have fewer and less-diverse sources of energy?

You get crap when a hurricane shows up, that's what.

Many of those powerless residents are now asking hard questions of the area's power monopoly, which has spent millions of dollars fighting policies that would have strengthened the grid in the event of a major storm like Irma and, more broadly, stemmed the carbon-fueled climate change likely fueling monster storms.

"I am one of the many that has now been without power for more than two days as a result of Hurricane Irma," Elise McKenna, a West Palm Beach resident, told New Times via email. "My confusion came when so many of us lost power during the early hours of the storm that basically avoided us. We've been told time and time again that rate increases were to help prepare us for future storms."


Look, there are plenty of reasons to rag on FPL.  One of them is their insane (and heavily-lobbied for) requirements for connections to the grid for alternative energy sources.  But attempting to blame heavily-lobbied-for requirements on solar installs for the current outages is stupid -- first, there are next to zero solar installs on a home that can start and run an air conditioner, so in this particular instance you'd still have your sweltering heat.  Remember, it's not the running amps that matter it's starting amps and there is no buffer on a solar panel array that comes from the "sag" that a rotating generator has.  This works to your advantage when starting a motor load such as a compressor; a 5 ton AC unit can be successfully started on a ~14-15kva genset -- usually.  No such luck with solar; you need to be able to source the entire lock-rotor rating on the motor for a short period of time without tripping the inverter connected to the panels.  This could be as much as 140 amps, which means you need somewhere on the order of 30kva of solar panels with nothing else running to start that unit.

Now there are "cheats" available, including true PWM-modulated start units.  They cost a few hundred bucks.  Do you have one in your condenser?  The time to figure it out isn't after the hurricane comes, by the way, and they're not standard in any off-the-shelf household units.  Guess how many of those units are likely found around Florida's home A/C units?  What is zero, Alex?

Now let's say you put one of these in.  You're good, right?  Yes, right up until a cloud shades part of your panel array and the output drops below the running amps of the unit momentarily.  Oops.  There's another trip and again with no buffering from the grid off goes the air!

Can you build a fully-independent, buffered power system?  Sure.  How much money do you have?  There are damn few if not zero of those laying around in residential installations simply because they make no economic sense even with tax subsidies if you can connect to the grid.

So yeah, spare me the whines about solar and how FPL "screwed" you, because the typical larger residential solar system delivers something like one quarter what it takes to start that AC unit.  Maybe.

The real issue here is twofold, with the largest issue being a major reduction in the diversity of generation sources.  This hurts bigtime when bad things happen to the grid, because you can have all the power generation capability you wish but if you can't deliver it to customers it's worthless.  In addition concentrating generation sources mean that when one larger system gets taken down due to severe weather it impacts more people since there are fewer, larger generation sources rather than more, smaller ones.  The more screaming you do about Globull BULL**** the more you make this problem worse.

The one place FPL could have done more and better is underground transmission.  But that's not a panacea.  Underground vaults can flood and if they do they can short out the lines, which is just as bad as having them blown over and can be worse if they're energized at the time.  Never mind that it's a hell of a lot harder (takes longer) to fix an underground vault and put it back in service than it is an above-ground transformer!  Not only is it more expensive to run wires underground it requires more and thicker wire too because the heat dissipation capacity of said wire is less.  Combined with less diversity of generation sources you wind up with more "pockets" of material size where restoration takes longer.

If you live somewhere subject to severe weather you need to think about these things in advance.  Yes, it sucks with no A/C in Florida.  Been there done that.  But reality is that it is we, the people who have permitted the scam known as "Globull Warming" to take root, it is we the people who have made demands and then we get upset when the consequences come.

Either cut the crap or buy a generator large enough to start your A/C -- and if you do the latter then marvel at exactly how cheap your power from the utility company really is when you have to feed that biatch with gasoline or diesel.  You'll gain a lot of respect for the power company the first time you actually run one of these things for a while and total up the gas bill along with the required maintenance such as oil changes and the like -- which, when on 24x7, are required every couple of days!

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For a firm to place someone, who happens to be a woman, with a Masters in Music in charge of their corporate data security is not only either an obvious diversity hire or one of the most-obnoxious acts of nepotism or otherwise "paying it backward" of all time.

For that to have happened within a company that holds personal data on damn near every single American adult is outright criminal.

That the company appears to have tried to whitewash or even cover it up is even worse.

This calls for not just prison for the executives involved but the corporate death penalty for the company.

Folks, either we all stand in unison and demand that this firm be put out of business now and forevermore, and that for the indefinite future you are able to freeze and unfreeze your credit file without cost, at any time and for any reason or we as a nation deserve to be nuked to ash by the Korean Rocketman.

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2017-09-17 07:00 by Karl Denninger
in Editorial , 192 references
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No, I won't be giving you rat bastards any money in the future....

The venerated Smithsonian Institution’s National Museum of Natural History in Washington, D.C., has announced it will tear down the Johnson IMAX Theater—the premier theater in the United States dedicated to documentary films about nature—in order to sell more fast food.

That's outrageous.

The Smithsonian IMAX is a really cool thing, as are all of these theaters.  But ramping ticket prices have certainly not helped, so now it's would you like fries with that? instead.

Oh, also at outrageous prices.

I suppose it's fitting that our so-called national "historical society" would choose to add more insanely-unhealthy food options while destroying educational opportunity.

It fits right in with Facesucker, Snapcrap and Spoogle.


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2017-09-13 08:22 by Karl Denninger
in Editorial , 1152 references
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Irma was never even an actual Cat 1 hurricane at Naples?

Does it matter?  Sure it does.  Remember, we were told how Irma was a "hurricane for the record books" and "most intense storm on record."

Of course this is all part of the global warming screamfest -- and expected from such jackasses as Rachel Maddow. 

We rely on real news, not "fake news" and made up bull****, however, when we make decisions that save or take lives.

If NOAA and the NHC have become corrupted then there is little left upon which we can rely.

So with that, I offer this, which Eric Hunsader tweeted:

This shows..... a strong tropical storm.

Note that the eye went directly over that location; it's obvious from the graph.

Hurricane wind speeds are defined not by the highest gust recorded but by the highest 1 minute sustained windspeed.  This was - maybe - a Category 1 hurricane at that point in time.  Marco Island might have gotten a Cat 2 impact.  Maybe.

But even as the approaching storm came into the Keys I didn't see anything that looked like Cat 3 sustained winds.  Gusts over 100kts, yes, those were reported.  But sustained winds at Cat 3 speeds?  Nope.

Just as telling and perhaps more-so are the damage pictures I've seen thus far.  The early "drone survey" images posted to Twitter and elsewhere in the Naples area showed moderate destruction -- of mobile homes.  Folks, mobile homes are destroyed by Cat 2 hurricanes -- reliably.  We're not talking about the roofs ripped off or some damage, we're talking about only pieces being left.  Cat 3s usually leave nothing but kindling when it comes to mobile homes.

Well-built structures start to fail (entirely) at Cat 4.

There's no doubt that Barbuda and Saint Marten got it in the face.  But context matters, as do facts.  The claim of 185mph sustained winds isn't backed up by a sub-900mb surface pressure.  That was simply never recorded and unlike anemometers that are often destroyed in heavy winds barometers are not.

Let me further remind you that 185mph sustained windspeeds are roughly equivalent to an EF-3 tornado.  I've seen the damage field from those; they reliably slab even well-built frame houses.

Was Irma a nasty storm?  Certainly.  It had a large circulation and did a hell of a lot of damage.

But lying for political purposes is not acceptable when it comes to such storms, and it appears that both the NHC and NOAA have done exactly that.  If you are making life-safety decisions you need accurate information, whether it is to choose to evacuate (or not), or if you are attempting to plan government or other organizational responses.  Lies for political purposes that exaggerate the severity of an incoming storm do real economic harm to real people -- they cause them to spend money, close businesses and otherwise disrupt their lives in ways that are not justified given the facts.

Finally, if you want something lighter and non-political (at all) head over to Sarah's blog today -- she's getting ready to put some artwork of hers on the block. A fair bit of it is hanging in our house, and it would look nice in yours!

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2017-09-11 06:48 by Karl Denninger
in Editorial , 341 references
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In "The Bar" on the Ticker, where the grandfathered can discuss various topics among themselves (part of what was formerly "Tickerforum") as Irma was approaching I pointed out that if the storm took a somewhat-southerly path and impacted Cuba that due to the terrain there limiting inflow and the organization of the storm it would be materially disrupted -- to the point that would much limit the damage the US would take.

That turned out to be exactly correct.

It wasn't good for Cuba, of course.  We don't know exactly how much damage Cuba took but there are reports that at least one of their airports was destroyed.  It's probably fair to assume that anything on the northern coast or barrier islands where the storm traversed is either severely damaged or gone.  Of course Barbuda, along with other islands in the chain that took the full force were also severely damaged; St. Maarten (which I've visited before) is trashed.

I will also note for the climate screamers that Irma was not the longest-running "Major" in the modern record.  Ivan was.  We got hit by Ivan here.  This is not to denigrate Irma and the fact that as a Cat 5 she was a royal bitch, because she was -- but let's also remember that we've only had the sort of "accurate" watch on these things that we enjoy today since roughly the 1960s, when weather satellites showed up.  Prior to that you knew when there was a hurricane coming when.... well, it "got someone", either a ship, an island, or it got close enough to either that you could see it on radar.  Prior to WWII there was no radar either.  So arguing that Irma broke a record, or that "climate change" is responsible is just flat-out bull****.

A friend of mine in Venice is apparently without water service due to a main break.  I'm sure there are more of those, and of course the power is off in a lot of places throughout the state.  Flying trees and power lines don't get along very well.

The market seems to think hurricane impacts are bullish given the overnight hours.  Frankly, I think that's nuts; destroying capital is never bullish and when the "response" will be to borrow more money we don't have and spend it since there's no capital surplus left anywhere, either among people or governments it's even worse.  Of course among the "reinsurance" stocks everyone thinks it's grand since rates will be going up (and probably a lot) in that regard, which of course is "bullish" too when everyone's homeowner's and business insurance costs will be rising whether they were damaged or not.  Yes, this will be good for "profits", right?

Uh, no.

But boy it is good for certain people.  I have no argument with the linemen and women who are just waiting for the wind to die down so they can start restoring power, and who will be making $30,000 in the next month or so working 100 hour weeks.  Overtime is beautiful when you can get it like that, and it will certainly be good for them.  Think about that one when you local High School is pressuring your kid to go to college; instead, perhaps he or she ought to learn how to string wire.

But the idea that somehow our so-called "free market" will and should cheer events like this is sickening, especially when nobody has put back reserves for these events and nobody will in the future either.  Instead we'll hear about how "wonderful" the market's response is, and why paying $2.65 or more a gallon for gas that was $2.25 a couple of weeks ago is a "good thing" too.  The climate screamers will lie some more about CO2 and its impact (folks, more CO2 is good -- unless you want people to die from starvation, that is!) and kill a few million more birds with their windmill follies (speaking of which, how do they hold up under Cat 3+ hurricane winds?) while Musk will snicker at all the Tesla owners who he "unlocked" for a week while they were trying to flee.  Speaking of that, how's that going to work out for them when they try to return home with no power at any of the "Supercharger" stations?

Then there's the hotels and such who have and will make bank; all good for them, but not so much for those who evacuated and didn't get damaged.  They don't get to claim anything from insurance for that evac; it comes out of their pockets.  How many of them can pay off that credit card at the end of month?  Since we know that 75% of the population lives paycheck-to-paycheck the answer will be almost nobody.  But that's "bullish" too, right?  Wrong.

Anyway, 'nuff said.  The crooners will be "buy stawks, all the time" of course -- that's what they do.  The broken window fallacy will be out in force, as if the only capital goods destroyed were all old and worthless, thus replacing old with new will be a net positive.  There might be an argument for this in limited cases had there been capital surplus people and governments had accumulated over time, but between Obamacare and the rest of the government always spending more than they take in, along with the sorry and in fact near-bankrupt state of most individual Americans' finances, this is utter horse****.

The political aspect has already started and will get worse.  But you might want to consider the perspective of those who have modeled the atmosphere and gotten it provably right instead of all the screamers who have done so and repeatedly gotten it wrong, which is true of all of the so-called "global warming" models and those pushing them like heroin to a credulous population and political class, all of whom demand more of their heroin and fentanyl like good junkies groveling before their pusher.  If we could find two functional neurons between 330 million Americans we'd hang the climate screamers trying to steal by using natural events as their "bait", but we don't and thus they're all safe from said wrath.

Of course any amount of honesty in this regard wouldn't make for neat political headlines and more theft from you, nor can you whip people into a hysterical froth with the truth.

So that won't be what the media does or politicians focus on, nor will it be what you demand.  Enjoy the shoe-size IQ of the typical American in coming weeks and months.

Be well fellow readers, and beware believing the bull**** you're about to have served on your plate with a claim that it's "climate-friendly steak substitute."

I guarantee that if you take a bite it'll taste like bull**** -- because it is.

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