Government
Outsized Yield Swings Defy Bond Traders Bets For Calm
Outsized Yield Swings Defy Bond Traders Bets For Calm
By Garfield Reynolds, Bloomberg Markets live reporter and strategist
Treasuries tumbled…
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By Garfield Reynolds, Bloomberg Markets live reporter and strategist
Treasuries tumbled to undo part of this week’s sharp rally, and once more the longer end of the curve was a key pain point.
Federal Reserve Chairman Jerome Powell’s pushback against the idea that interest rate hikes are done undoubtedly played a role, the spike in yields was the largest for 20- and 30-year notes.
That was more about fresh concerns that investors will struggle to absorb the swelling supply of US government securities.
The result was another day of outsized yield moves, as Treasuries defy traders’ expectations for a calmer market now that the Fed is at the very least close to the end of its tightening cycle. Just take a look at the widening gap between actual and implied volatility for the iShares 20+ Year Treasury Bond ETF.
Actual 30-day price swings for the $42 billion fund keep climbing to make fresh post-pandemic highs, despite the drop in expected volatility to the lowest in September.
International
UN’s ‘global stocktake’ on climate is offering a sober emissions reckoning − but there are also signs of progress
Many countries still plan to increase fossil fuel production in the coming years and are offering big subsidies. Negotiators have their work cut out for…
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When this year’s United Nations Climate Change Conference begins in late November 2023, it will be a moment for course correction. Seven years ago, nearly every country worldwide signed onto the Paris climate agreement. They agreed to goals of limiting global warming – including key targets to be met by 2030, seven years from now.
A primary aim of this year’s conference, known as COP28, is to evaluate countries’ progress halfway to the 2030 deadlines.
Reports show that the world isn’t on track. At the same time, energy security concerns and disputes over how to compensate countries for loss and damage from climate change are making agreements on cutting emissions tougher to reach.
But as energy and environmental policy researchers, we also see signs of progress.
Global stocktake raises alarms
A cornerstone of COP28 is the conclusion of the global stocktake, a review underway of the world’s efforts to address climate change. It is designed to pinpoint deficiencies and help countries recalibrate their climate strategies.
A report on the stocktake so far stressed that while the Paris Agreement has spurred action on climate change around the globe, current policies and promises to cut greenhouse gas emissions still leave the world on a trajectory that falls far short of the agreement’s aim to limit warming to less than 1.5 degrees Celsius (2.7 Fahrenheit) compared with preindustrial temperatures.
Governments worldwide plan to produce twice as much fossil fuel in 2030 than would be allowed under a 1.5 C warming pathway, another U.N.-led report released in early November found.
Limiting global warming to 1.5 C rather than 2 C (3.6 F), may appear to be a minor improvement, but the accumulated global benefits of doing so could exceed US$20 trillion.
Escalating greenhouse gas emissions are the primary factor driving the rise in global temperatures. And fossil fuels account for over three-quarters of those emissions.
To avoid overshooting 1.5 C of warming, global greenhouse gas emissions will have to fall by about 45% by 2030, compared with 2010 levels, and reach net zero around 2050, according to the Intergovernmental Panel on Climate Change.
But emissions aren’t falling. They rose in 2022, surpassing pre-pandemic levels. The global average temperature briefly breached the 1.5 C warming limit in March and June 2023.
The global stocktake unambiguously states that, to meet the Paris targets, countries must collectively be more ambitious in cutting greenhouse gas emissions. That includes rapidly reducing carbon emissions from all economic sectors. It means accelerating adoption of renewable energy such as solar and wind power, implementing more stringent measures to stop and reverse deforestation, and deploying clean technologies such as heat pumps and electric vehicles on a wide scale.
The significance of phasing out fossil fuels
The report underscores one point repeatedly: the pressing need to “phase out all unabated fossil fuels.”
Fossil fuels currently make up 80% of the world’s total energy consumption. Their use in 2022 resulted in an all-time high of 36.8 gigatons of CO2 from both energy combustion and industrial activities.
Despite the risks of climate change, countries still provide huge subsidies to the oil, coal and gas industries. In all, they provided about US$1.3 trillion in explicit subsidies for fossil fuels in 2022, according to the International Monetary Fund’s calculations. China, the U.S., Russia, the European Union and India are the largest subsidizers, and these subsidies sharply increased after Russia’s invasion of Ukraine in 2022 disrupted energy markets.
U.N. Secretary-General António Guterres has stressed the importance of transitioning away from fossil fuels, criticizing the extensive profits made by “entrenched interests” in the fossil fuel sector.
African countries also made their view of subsidies clear in the “Nairobi Declaration” at the first Africa Climate Summit in 2023, where leaders called for the elimination of inefficient fossil fuel subsidies and endorsed the idea of a global carbon tax on fossil fuel trade.
The global stocktake highlights the significance of eradicating fossil fuel subsidies to eliminate economic roadblocks that hinder the shift to greener energy sources. However, it’s important to note that the report uses the phrase “unabated fossil fuels.” The word “unabated” has been contentious. It allows room for continued use of fossil fuels, as long as technologies such as carbon capture and storage prevent emissions from entering the atmosphere. But those technologies aren’t yet operating on a wide scale.
Solutions for an equitable transition
Several initiatives have been launched recently to expedite the move away from fossil fuels.
In July 2023, Canada unveiled a strategy to terminate inefficient fossil fuel subsidies, becoming the first G20 nation to pledge a halt to government support for oil and natural gas, with some exceptions.
The European Union is broadening its carbon market to include emissions from buildings and transport, targeting decarbonization across more sectors. Concurrently, the United States’ Inflation Reduction Act commits US$10 billion to clean energy projects and offers $4 billion in tax credits to communities economically affected by the coal industry’s decline.
To help low-income countries build sustainable energy infrastructure, a relatively new financing mechanism called Just Energy Transition Partnerships is gaining interest. It aims to facilitate cooperation, with a group of developed countries helping phase out coal in developing economies that are still reliant on fossil fuels.
South Africa, Indonesia, Senegal and Vietnam have benefited from these partnerships since the first was launched in 2021. The European Union, for instance, has pledged to support Senegal’s shift from fossil fuels to renewable energy. This includes managing the economic fallout, such as potential job losses, from shutting down fossil fuel power plants, while ensuring electricity remains affordable and more widely available.
By COP28, a comprehensive plan to help Senegal aim for a sustainable, low-emissions future should be in place. France, Germany, Canada and various multilateral development banks have promised to provide 2.5 billion Euros (about US$2.68 billion) to increase Senegal’s renewable energy output. The goal is for renewables to account for 40% of Senegal’s energy use by 2030.
To align with the Paris Agreement objectives, we believe global initiatives to reduce fossil fuel dependency and invest in developing nations’ sustainable energy transition are essential. Such endeavors not only champion reducing greenhouse gas emissions but also ensure economic growth in an environmentally conscious manner.
The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.
subsidies economic growth pandemic oil africa india canada european france germany russia ukraine chinaInternational
AstraZeneca’s Q3 financial report bodes profit growth
This is the third consecutive quarter that the company came in ahead of analyst predictions. Chief executive officer (CEO) of the Cambridge-based pharmaceutical…
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This is the third consecutive quarter that the company came in ahead of analyst predictions. Chief executive officer (CEO) of the Cambridge-based pharmaceutical enterprise, Pascal Soriot, said:
Our company continued its strong growth trajectory in the third quarter with Total Revenue from our non-COVID-19 medicines up 13% compared to last year.
To boost its future growth prospects further, AstraZeneca announced it bought an exclusive licence for a weight-loss candidate from Eccogene, a China-based pharmaceutics outfit that focuses on metabolic and auto-immune diseases. This deal of an estimated $2bn launches AstraZeneca into the rapidly growing anti-obesity market.
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As one of the top performers among listed European pharmaceutical businesses, AstraZeneca’s third-quarter profits came in at $11.49bn, narrowly beating the market forecast of $11.47bn. A year-on-year comparison shows an increase in total revenue of 15%.
China sales made up 13% of the company’s revenue in 2022. The Q3 report shows a 1% increase in these sales. Although not much, it is the fifth consecutive China-based quarter of growth. Expressing his satisfaction with the financial performance, Soriot further commented:
I am excited about the acceleration of our cardiometabolic and obesity pipeline with today’s licensing agreement for ECC5004, a potential best-in-class, oral GLP-1RA2. This molecule could offer an important advance, as both a monotherapy and in combinations, for the estimated one billion people living with cardiometabolic diseases such as type-2 diabetes and obesity.
The post AstraZeneca’s Q3 financial report bodes profit growth appeared first on LeapRate.
european china covid-19Government
Running On Censorship: A California Candidate Seeks To Ride The Anti-Free Speech Wave
Running On Censorship: A California Candidate Seeks To Ride The Anti-Free Speech Wave
Authored by Jonathan Turley,
It is not easy to unseat…
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It is not easy to unseat an incumbent in Congress, but Will Rollins believes that he has hit on a guaranteed winner to galvanize Democratic support in California’s 41st congressional district.
He is pledging to push for greater censorship to stop those “profiting by spreading division based on lies.”
Of course, the former assistant U.S. Attorney suggests that he will know who is lying and who should be allowed to speak freely.
Rollins is also running on his role “prosecuting insurrectionists” from January 6. While most of us condemned the riot on that day and supported the prosecution of those who broke into the Capitol, polls show that most Americans do not view what occurred as an actual insurrection or rebellion.
That, however, is a legitimate matter of debate and people of good faith can differ in how they view the crimes committed that day. What is far more serious is the embrace of censorship as a political cause.
Rollins pledged to stop people saying things that “erode our democracy.” His policy platform promises “accountability” for tech platforms that “spread conspiracy theories” and do not yield to demands for censorship. It appears to be a pitch to restore censorship systems on sites like X but also pledges to go after “media outlets.”
He is not alone in such efforts. Democratic members caused a firestorm previously by writing to cable carriers like AT&T to ask why they are still allowing people to watch FOX News. Rollins promises to crackdown on “propaganda networks to protect the public’s right to be informed.” He does not identify which networks would be targeted, but the assumption is that it is not MSNBC. (For full disclosure, I am a legal analyst on Fox News). However, he wants ramped up penalties for anything that he considers “harmful lies and conspiracy theories.”
Of course, one person’s “conspiracy theory” is another person’s news. It is again unlikely that Rollins will be pursuing the Washington Post which recently reaffirmed that it is standing by past false claims made about Lafayette Park, the Hunter Biden laptop, and Russian collusion. Rollins is not likely referencing the false conspiracy theories funded by the Clinton campaign like the Alfa Bank allegations.
As someone who was raised in a liberal, politically active Democratic family in Chicago, I remember when the party championed free speech as a touchstone of the party. Now it is often treated as an existential threat to democracy.
In recent hearings on the government’s censorship programs, Democratic members and pundits attacked witnesses as “Putin lovers” or supporters of “insurrectionists” in opposing censorship.
President Joe Biden is now arguably the most anti-free speech president since John Adams. His administration is unabashedly and unrepentantly pursuing the silencing of those with opposing views. Jen Easterly, who heads the Cybersecurity and Infrastructure Security Agency, extended her agency’s mandate over critical infrastructure to include “our cognitive infrastructure.” That includes combating “malinformation” – described as information “based on fact, but used out of context to mislead, harm, or manipulate.”
Democratic members have warned social media companies that they will not tolerate any backsliding after Elon Musk dismantled the massive censorship system at Twitter.
In one hearing, tech CEOs appeared before the Senate on past censorship. Sen. Chris Coons (D-Del.) pushed back on statements from the witnesses suggesting an effort to protect free speech and reminded them that “the pandemic and misinformation about COVID-19, manipulated media also cause harm” as well as “climate change misinformation policy” and “climate denialism.”
It did not matter that many censored over their views on the efficacy of masks or the necessity of shutting down schools have been vindicated. Even raising the lab theory on the origin of Covid 19 was denounced as a conspiracy theory. Even after the theory was embraced by government agencies as possible or the most likely explanation, science and health reporter for the New York Times, Apoorva Mandavilli, continued to denounce the theory as “racist.”
The concerning aspect of Rollins’ campaign is that censorship was largely used as a political tactic in Washington to silence critics and opposing views. It is now an actual political campaign. It shows how speech regulation has become popular with the rank-and-file in the party. It now defines the party.
Campaigning for censorship should be a warning sign of the breakdown of democratic values. Limiting free speech is akin to cutting off oxygen to the body politic. It produces atrophy in a system, the breakdown of our political tissues. That is also reflected in a recent poll that shows that 52% of Biden supporters say Republicans are now a threat to American life while 47% of Trump supporters say the same about Democrats. Roughly 40% of both parties believe violence is now justified and roughly a quarter of both parties now question our system of government.
Politicians fuel that anger by running on silencing their opponents in the name of disinformation or malinformation. It is of course popular. Rage is often popular. Indeed, it can be addictive. Yet, what remains is release from reason in the blind pursuit of those with opposing views.
Will Rollins is right that this is a popular pitch for an age of rage. However, it is the political version of the Dead Sea Fruits that were irresistible to pick but would turn to ashes in one’s mouth. Silencing others creates an insatiable appetite for combating an ever widening circle of “lies.” Until, that is, when you find yourself encircled by your own truth police.
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