Wind
Energy Now Competes Directly with Coal on Cost - (www.wolfstreet.com) Moody’s
Investor Services now estimates that
the falling costs of wind power directly threatens 56 GW of coal power, out of
87 GW surveyed. Moody’s report estimates the MW-hour cost of wind in the Great
Plains region at around $20, while coal comes in at $30. Total U.S. wind energy
capacity grew 19 percent in 2016 and reached 5.5 percent of total generating
capacity, outstripping hydroelectric as the nation’s largest source of
renewable energy. Much of the surge in added capacity came from power companies
and utilities eager to take advantage of the PTC before it is cut from 80
percent to 60 percent. The author of the report noted that it was economic, not
environmental logic that is driving utilities to adopt wind power, as Xcel
plans to do. “Yes, it’s good for the environment and the consumers benefit from
having cleaner power at a cheaper price, but at the end of the day, it is
pursued by the utility because it is much more cost-effective.”
NYC
Retail Vacancies Soar Prompting Massive Rent Concessions - (www.zerohedge.com) It used to be that taking a 10-minute walk
around SoHo meant passing by at least a dozen upstart, trendy fashion retailers
eager to sell you a $500 hoodie or $1,000 pair of sneakers. But these
days you're much more likely to see a whole bunch of this: As Bloomberg points
out this morning, in the wake of Manhattan's retail drought, commercial
landlords, who have seen retail occupancy levels plummet over the past 12
months, are doing everything possible to avoid big price cuts. Instead,
like residential landlords, commercial real estate owners are providing
massive rent concessions through things like interior redesigns and moving
expenses to keep storefronts from going empty.
Health-Care
Industry Debt Turns into “Systemic Recession Risk” - (www.wolfstreet.com) This
time, three sectors stand out where “a similar pattern of unsustainable growth
has driven rapid expansion” since the end of the Great Recession: technology,
automotive (whose current travails I keep dissecting), and health care. But health care poses the
biggest “systemic recession risk” to the US economy, according to the report.
After employment in the sector has soared 113% since 1990, it accounts for 16%
of private sector jobs, up from 10% in 1990. As so many times, it has to do
with debt. Health-care sector debt has soared 308% since 2009, the depth of the
Great Recession which elegantly bypassed the sector. Over the same period, GDP
has grown 30%, and overall jobs have grown only 18%. Thus health-care sector
debt has grown 10 times faster than GDP and 17 times faster than private-sector
jobs, “exceeding multiples of prior finance and energy sector boom-and-bust
cycles.”
Critic
of World Bank and IMF eyed for key role at Treasury - (www.ft.com) Conservative
economist Allan Meltzer has railed against the World Bank and the International
Monetary Fund for decades and in Donald Trump’s nomination of a former protegee
he sees hope that Washington may finally be heeding his calls for reform. While
Mr Trump’s naming this month of Adam Lerrick as the next assistant secretary
for international finance at the Treasury has yielded a nervous reaction inside
both the IMF and the World Bank, Mr Meltzer is effusive. “There is not to my
knowledge a person in the world better qualified for that job,” he says. Mr
Lerrick, a former investment banker, served as Mr Meltzer’s top adviser on a
1990s congressional commission examining the role of the two institutions in
the global economy. The “Meltzer Commission” report that Mr Lerrick went on to
help draft called for a more limited IMF that focuses exclusively on plugging
the short-term liquidity needs of countries facing crises rather than
protracted bailouts.
How
China's Bank Behemoths Make Money on the Debt War - (www.bloomberg.com) As
China ramps up its quest to conquer leverage, the banking sector is finding out
that being a big fish pays -- literally. While smaller lenders grapple with
soaring money-market rates -- some are said to have defaulted amid
the tight liquidity -- their larger counterparts are poised for a windfall.
Bigger banks are benefiting from higher borrowing costs given their status as
net lenders in the interbank market, a situation that has Citigroup Inc. to
Morgan Stanley favoring their shares. Large bank stocks have already returned
double that of their smaller brethren so far this year. “Investors can long big
banks, while shorting the small ones,” said Hao Hong, chief strategist in Hong
Kong at Bocom International Holdings Co., a brokerage owned by Shanghai-based
Bank of Communications Co., a medium-sized bank. “Large lenders might be
secretly happy at what’s going on, while the smaller ones are hoping the
central bank will always save them during cash squeezes.”
America's Housing Inventory Problem, Explained in Four Charts - (www.bloomberg.com)
Here are the nation’s healthiest—and unhealthiest—housing markets - (www.cnbc.com)
Bundesbank's Weidmann calls for "less expansive" ECB policy - (www.reuters.com)
Time to Redo the Math on Tax Reform Prospects - (www.wsj.com)
Forget Trump v. Congress. The Real Political Danger’s Still in Europe - (www.wsj.com)
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