A drastic haircut for Greek middle-class as savers are set to lose 30% of their deposits over €8,000

July 4, 2015

The Greek problem is very complicated I am told. It is an ideological battle between right and left, I also read. It is austerity versus profligacy. But I think it has been unnecessarily “complexified”. It is not about which ideological gods are to be worshipped but it is about good house-keeping. It is essentially, basic “home economics” applied to a household of 11 million people. It is about how a deeply indebted household with expensive habits and many non-contributing members is to continue. It is about what lenders are justified in demanding from the household to continue lending. It is about abdication of responsibility by the householder. It is about lending to a prudent householder or to one who will neither clean his house or commit to good house-keeping.

Whichever way it goes at the referendum tomorrow, there is going to be a great deal of pain for the “middle class” who have paid their taxes and have managed to save and who keep their savings in Greek banks. Those who don’t usually pay their taxes (and I have seen one estimate that these are around one third of those who should be paying taxes), keep the “black” economy thriving and they don’t usually bother with banks. The visible rich probably pay a significant amount of the taxes they should but they keep their money mainly outside of Greece (but probably in the Eurozone or in dollars). Since Tsipras came to power they have been quietly getting out of the Greek banks. They are well aware of how all depositors in Cyprus had their savings in Cypriot banks arbitrarily written down over one day while the banks were closed. The very rich of course are well versed in all methods of tax evasion and they are not so stupid as to have kept their money as deposits with the Greek banks.

The total Greek debt is about €328 billion which is about €30,000 per capita. In theory if €30,000 could be confiscated from every Greek citizen, Greece could be debt free. Of course if creditors accept that some level of debt write-down is inevitable – and this seems unavoidable – they will certainly insist that Greece and its banks also accept a “haircut”. The question becomes how much debt write-down is necessary and how much of that will be confiscated by those with substantial deposits in Greek banks. If the IMF analysis is to believed (and they have been wrong many times) then the debt must be reduced by around €60 billion for a growing(?) Greek economy to have a chance of servicing the remaining debt.

Yesterday a report in the Financial Times (since vehemently denied by Syriza) stated that a swingeing 30% of all deposits over €8,000 would be confiscated. As a comparison the Cypriot haircut finally became a dissolution of Laiki Bank and the confiscation (with part conversion to equity) of 47.5% of all deposits above 100,000 euros in the Bank of Cyprus. There are not enough deposits at Greek banks of over €100,000 to milk and hence the figure of €8,000 seems credible.

The critical point is how much debt can 30% of these deposits wipe out. Suppose the lenders agree to write-off (or write down) debts equivalent to about €30 billion. Then Greek savers would need to cough up an equivalent amount if the IMF target of €60 million is to be reached. That is about €3,000 per capita. Greece has an average monthly wage of about €1000 per month (2014). Of course unemployment is high and it is not the average wage earner who exhibited the profligacy or evaded taxes which created the Greek debt mountain. From Syriza’s perspective, confiscating the money of the rich would be best for this purpose. But since that may not be within reach, it is better to soak the middle-class than the bulk of their supporters who are average wage earners or unemployed.

So whichever way it goes in the referendum tomorrow, the middle-class in Greece are going to get badly hit. They are in for a full Brazilian wax job and not just a neat short back-and-sides.

 

Is embarrassing Gujarat data holding back the Indian Health and Nutrition Survey?

July 3, 2015

According to the BBC, the massive undertaking that is the Indian Health and Nutrition Survey has been completed, should have been released in October 2014, was last issued in 2007 and even has an encouraging story to tell. But the data on Gujarat is not an edifying tale in comparison to other states. Economic growth in the state has not translated into any major advance compared to other states. In fact the Gujarat performance is worse than most. 42% of all children are stunted and half of all children are malnourished.

Is the report too damaging to Modi’s Gujarat story? And is it therefore being held back by Modi’s public relations managers? The official position is that the methodology is being reviewed. But it is more likely being held back to somehow massage the Gujarat figures. It will be difficult because copies of the completed – but not officially released – report are now available widely.

BBC:

Good health data is rare in India. The last time the country published a comprehensive, state-wide survey was back in 2007. So why hasn’t a vast survey of women and children carried out by the Indian government with the UN agency for children, Unicef, been released?

India’s so-called Rapid Survey of Children was a huge undertaking. Almost 100,000 children were measured and weighed and more than 200,000 people interviewed across the country’s 29 states. The final report was due for publication in October last year, the BBC understands. Yet, more than half a year later, the important body of data remains secret.

Leading development economist Jean Dreze describes the delay in publication as “an absolute scandal”. “All the neighbouring countries including Bangladesh, Nepal, Sri Lanka, Bhutan, Pakistan and even Afghanistan have up to date nutritional surveys,” he says. “It is hard to account for a 10-year gap without attributing some sort of political reluctance.” …..

Looking just at the overall figures, India’s reluctance to publish the survey is rather surprising. It shows the country has an encouraging story to tell. Indicators of malnutrition are still very high, far higher than most African nations, but they are improving. Ten years ago, two-fifths of children under five were underweight, now it is more like a third.

However, the survey confirms large and enduring discrepancies between states, including the continuing strikingly poor performance of the Indian prime minister’s home state, Gujarat. As chief minister, Narendra Modi ran the state for more than a decade. His general election campaign was based on the promise that he would do for India what he had done for Gujarat.

Is anybody surprised?

Physics and cosmology are more magical than alchemy as dark energy goes phantom

July 3, 2015

The methodology is quite simple. First, invent a theory to explain what we don’t know. Then do some fancy maths to back up the theory. Whenever the theory fails, define a magic particle or event or property which brings credibility back to the theory. Spend vast amounts of money on Big Science experiments to find the magic particle or event or property. Find something other than the magic particle or property or event that was predicted. Claim that what was found was a special case of the magic “thing” that was predicted and due to some new magic particle or event or property. Demand more money to do more and bigger Big Science experiments. Magic demands more magic. And so an ad infinitum.

And so came the 4 magic forces of nature which cannot be explained – Gravity, Electromagnetism, the Strong Force and the Weak Force. The magic forces exist and can be calculated but they cannot be explained. Universal magic that just is. One of the characteristics of modern physics is that magical things are given names in lieu of explanations. Then came the Standard Model of Particle Physics and new magic particles named the Higgs Boson to be found by the very expensive Large Hadron Collider. Some data is interpreted as having found a form of the Higgs boson – but that leaves other magic particles and the true Higgs Boson still to be found. (The same data could also be used – probably with more certainty – to predict the next winner of the Triple Crown or even the next President of the United States). Finding the missing magic particles will naturally require more money, more physicists, more cosmologists and more mathematicians. More and Bigger Science.

Cosmology has not been far behind in inventing magical events and magical “things”. A magical Big Bang was to be followed by a mysterious Big Crunch or possibly a fantastical Big Freeze. Now comes another speculative paper and another Magical Event – the Big Rip. We know that the magical expansion of the universe is fuelled by magical dark energy. And we know, of course, that dark energy is simply that which causes the universe to expand. And so the Big Rip may be due to deeper magic which gives phantom dark energy. It is only a matter of time before we find that even phantom dark energy can be further classified into that which spins clockwise or that which is tall.

But not to worry. The Ripping end to the Universe is still 22 billion years away. Maybe the United Nations could pass a resolution condemning this future event. And then establish an International Panel on Universe Change to put a stop to this development.

Marcelo M. Disconzi, Thomas W. Kephart, Robert J. Scherrer. New approach to cosmological bulk viscosity. Physical Review D, 2015; 91 (4) DOI: 10.1103/PhysRevD.91.043532

A time line of the universe from Big Bang to Big Rip. Credit: Jeremy Teaford, Vanderbilt University

A time line of the universe from Big Bang to Big Rip.
Credit: Jeremy Teaford, Vanderbilt University

Vanderbilt Press Release: …… for decades cosmologists have had trouble reconciling the classic notion of viscosity based on the laws of thermodynamics with Einstein’s general theory of relativity. However, a team from Vanderbilt University has come up with a fundamentally new mathematical formulation of the problem that appears to bridge this long-standing gap.

The new math has some significant implications for the ultimate fate of the universe. It tends to favor one of the more radical scenarios that cosmologists have come up with known as the “Big Rip.” It may also shed new light on the basic nature of dark energy.

The new approach was developed by Assistant Professor of Mathematics Marcelo Disconzi in collaboration with physics professors Thomas Kephart and Robert Scherrer and is described in a paper published earlier this year in the journal Physical Review D.

……… In the 1990s, the physics community was shocked when astronomical measurements showed that the universe is expanding at an ever-accelerating rate. To explain this unpredicted acceleration, they were forced to hypothesize the existence of an unknown form of repulsive energy that is spread throughout the universe. Because they knew so little about it, they labeled it “dark energy.” 

Most dark energy theories to date have not taken cosmic viscosity into account, despite the fact that it has a repulsive effect strikingly similar to that of dark energy. “It is possible, but not very likely, that viscosity could account for all the acceleration that has been attributed to dark energy,” said Disconzi. “It is more likely that a significant fraction of the acceleration could be due to this more prosaic cause. As a result, viscosity may act as an important constraint on the properties of dark energy.”

Another interesting result involves the ultimate fate of the universe. Since the discovery of the universe’s run-away expansion, cosmologists have come up with a number of dramatic scenarios of what it could mean for the future.

One scenario, dubbed the “Big Freeze,” predicts that after 100 trillion years or so the universe will have grown so vast that the supplies of gas will become too thin for stars to form. As a result, existing stars will gradually burn out, leaving only black holes which, in turn, slowly evaporate away as space itself gets colder and colder.

An even more radical scenario is the “Big Rip.” It is predicated on a type of “phantom” dark energy that gets stronger over time. In this case, the expansion rate of the universe becomes so great that in 22 billion years or so material objects begin to fall apart and individual atoms disassemble themselves into unbound elementary particles and radiation.

As if invisible and undetectable dark energy is not magic enough, we must now postulate that there is a particular kind of this dark energy which is phantom dark energy. It is magic squared and of course the derivative is two-magic. This is not Space Opera, it is Cosmic Opera.

It is perhaps not so surprising that the more we know the more we don’t know and so modern physics and cosmology need much more magic to explain all we don’t know than alchemy ever did.

Gene mixing promotes height and intelligence – but is this an evolutionary benefit?

July 2, 2015

A new international study of the genetic make up and physical characteristics of 350,000 people indicates that greater genetic diversity leads to an increase of height and cognitive skills. But – somewhat surprisingly – lower genetic diversity did not lead to any visible increase in complex diseases. Genetic diversity was found to have no effect on blood pressure or cholesterol levels.

But I question the assumption that increased height and faster thinking are of “evolutionary advantage”. Evolutionary advantage must lead to an individual having a greater number of offspring than one without the advantage. Previous work has indicated that both child nourishment and genetics determine height.

And so I wonder what evolutionary advantage height may have in modern society? Does the ability to think faster lead to a greater number of surviving descendants? Richer and “more intelligent” groups tend to have much lower fertility rates than poorer, “less intelligent” groups.

Using the criterion of greatest surviving descendants indicating evolutionary advantage, leads to the conclusion that populations in Africa with the highest population increase rates must also have the greatest evolutionary advantages!

Peter K. Joshi et al. Directional dominance on stature and cognition in diverse human populations. Nature, 2015 DOI: 10.1038/nature14618

Abstract: Homozygosity has long been associated with rare, often devastating, Mendelian disorders, and Darwin was one of the first to recognize that inbreeding reduces evolutionary fitness. However, the effect of the more distant parental relatedness that is common in modern human populations is less well understood. Genomic data now allow us to investigate the effects of homozygosity on traits of public health importance by observing contiguous homozygous segments (runs of homozygosity), which are inferred to be homozygous along their complete length. Given the low levels of genome-wide homozygosity prevalent in most human populations, information is required on very large numbers of people to provide sufficient power. Here we use runs of homozygosity to study 16 health-related quantitative traits in 354,224 individuals from 102 cohorts, and find statistically significant associations between summed runs of homozygosity and four complex traits: height, forced expiratory lung volume in one second, general cognitive ability and educational attainment (P < 1 × 10−300, 2.1 × 10−6, 2.5 × 10−10 and 1.8 × 10−10, respectively).

University of Edinburgh Press Release:

People have evolved to be smarter and taller than their predecessors, a study of populations around the world suggests. Those who are born to parents from diverse genetic backgrounds tend to be taller and have sharper thinking skills than others, the major international study has found. Researchers analysed health and genetic information from more than 100 studies carried out around the world. These included details on more than 350,000 people from urban and rural communities.

The team found that greater genetic diversity is linked to increased height. It is also associated with better cognitive skills, as well as higher levels of education. However, genetic diversity had no effect on factors such as high blood pressure or cholesterol levels, which affect a person’s chances of developing heart disease, diabetes and other complex conditions.

Researchers from the University of Edinburgh examined individuals’ entire genetic make-up.

They pinpointed instances in which people had inherited identical copies of genes from both their mother and their father – an indicator that their ancestors were related. Where few instances of this occur in a person’s genes, it indicates greater genetic diversity in their heritage and the two sides of their family are unlikely to be distantly related. It had been thought that close family ties would raise a person’s risk of complex diseases but the researchers found this not to be the case.

The only traits they found to be affected by genetic diversity are height and the ability to think quickly.

 

GE makes its pitch for Alstom acquisition to the EC this week

July 1, 2015

The European Commission must make its decision by early August regarding GE’s proposed acquisition of Alstom’s energy and grid business. The EC’s concerns have held this deal up for the best part of a year. I estimate that financial closure for this deal is now no longer possible at least till the end of 2015. The EC sent GE its “statement of objections” in the middle of June. This week (tomorrow) GE will be attending “hearings” at the EC at its own request. The hearings are to be “oral” and the meetings are “closed-door”.

It seems to me that this is more of a negotiation rather than a “formal” hearing. Clearly GE will be exploring how far it needs to go in its final, written submissions which will be needed before the EC can make any formal adjudication in August. I suspect that GE might be considering “creative” alternatives for making IP from Alstom, which it judges it does not – and will not – need, available to other “serious” players. One difficulty is that a lot of IP has value in creating a barrier for others, rather than being usable in its own right. I also suspect that GE is looking to ensure that the revenue stream from the service of Alstom’s fleet of operating gas turbines is not impaired by being forced to give up part of that business. And to do that GE may be considering ways and means of assuring the EC that the pricing of such service business will be “reasonable” and not predatory.

Personally I think that many of the EC’s fears are imaginary or theoretical. They are quite insignificant compared to some of the predatory pricing and price-fixing that is evident in other industries. But then my own opinion is that it is better not to have a competitor in the market place rather than for a “sick” or reluctant competitor to be forced to continue. That only encourages distortion of the market place to the ultimate detriment of OEM’s and customers and eventually consumers. Moreover, R & D for advanced gas turbine technology will, I think, be served best by the deal going through.

According to Reuters, General Electric, the EC, other EU agencies, and parties opposing the deal will take part in a closed door hearing this Thursday, July 2.

Reuters:

Senior officials from the EU competition authority, their counterparts from EU agencies and rivals are expected to attend the closed-door hearing.

“We have requested an oral hearing,” GE spokesman Jim Healy said. He said the hearing would be on July 2.

French Economy Minister Emmanuel Macron has said the deal should be viewed in a global perspective and take into account Chinese rivals following the EU regulator’s decision to exclude the Chinese market from its scrutiny of GE’s market power.

The Commission is concerned the takeover would leave just two gas turbine companies in Europe, with GE competing only with Germany’s Siemens.

The EC has not announced who the objectors are but I expect that Ansaldo Energia (40% owned by Shanghai Electric) and Siemens are among those opposing. I can well see that Ansaldo/Shanghai would be looking to be able to access some of Alstom’s IP to help them to bridge the not inconsiderable technology gap they must overcome to even have a chance of becoming a major player in the Heavy Duty Gas Turbine market. Siemens, I am sure, would object as a matter of principle even if they will actually benefit from the deal. I am not sure if Mitsubishi-Hitachi has a presence large enough to have any locus standi as an objector in Europe. The Siemens/Wood Group JV (Turbo Care) which focuses on the service of non-Siemens gas turbines is likely to be a principle objector but in this case it is essentially a “pirate” and, hopefully, will not be given too much credence.

Patrick Kron, CEO of Alstom is very bullish – but then, of course, he can hardly be anything else.

Bidnessetc: Alstom SA chief executive Patrick Kron remains bullish that General Electric Company will successfully acquire its energy unit and will also have the European Union (EU) regulatory authorities’ approval. Mr. Kron’s statement came as General Electric has requested the EU antitrust authorities to conduct a hearing with the aim to get their approval.

The EU has been holding back General Electric’s request to acquire Alstom’s energy unit for the last few months, as it is investigating the effects of the acquisition on the European market. However, Mr. Kron said in an interview to a newspaper yesterday: “I hope that we are now in the final leg and I am confident … My position is very clear. I do not see why Plan A would not work out.”

Greece just moved from a “developed” to a “developing” nation

July 1, 2015

It has never happened before – certainly not since the 2nd World War –  that a developed economy defaults on payments to creditors and slides back to be a developing nation. But now Greece joins Argentina, the Ivory Coast, the Dominican Republic, Russia, Ukraine and Ecuador, among other developing countries, as countries which have defaulted on loan repayments to international creditors.

Greece has however defaulted many times before; in 1826, 1843, 1860, 1893, 1932 and now in 2015.

Reuters:

The International Monetary Fund on Tuesday confirmed Greece had not made its 1.5 billion euro ($1.7 billion) loan repayment to the Fund, making it the first advanced economy to ever be in arrears to the Fund.

The missed payment, the largest in the Fund’s history, is equivalent to a default, in that both imply a breach of Athens’ obligations. IMF spokesman Gerry Rice said Greece can now only receive further IMF funding once the arrears are cleared.

The Greek default is not only an indictment of the past profligacy and mismanagement in Greece but also of the EU’s (and the Eurozone’s) recklessly expansionist policies.

It is time, I think, for Greece to return to the Drachma. And then an orderly Grexit – as orderly as may be possible. The Euro is too far ahead of its time. As of now it is a failed experiment and the Eurozone needs to shrink sharply, if not to be entirely dismantled.

If the Deutschmark is not to return then at least a N.Euro and a S.Euro are called for?

As expected, Blatter follows Valcke and cancels Canada trip for fear of arrest

July 1, 2015

On June 2nd the FIFA General Secretary, Jerome Valcke, cancelled his trip to Canada for the opening of the Women’s World Cup and I observed then,

The FIFA General Secretary, Jerome Valcke, was due to travel to Canada to participate in the opening of the Women’s World Cup on June 6th. But yesterday there were reports that he had been named in one of the FBI’s indictments as the “high ranking FIFA official who had transferred monies to Jack Warner. He was not named as a defendant, but nevertheless he cancelled his trip to Canada “because he had important work to do in Zurich”. …..

Sepp Blatter has just resigned from the FIFA presidency. …….  If it turns out that he does not go to Canada for the final of the Women’s World Cup, then I would believe that he has resigned now because the FBI has found some evidence tying him to the shady deals. The reports tonight are that the FBI may well have provided the final straw.

And the news today is that Sepp Blatter has cancelled his trip to Canada to attend the final of the Women’s World Cup for “personal reasons”.

BBCFifa president Sepp Blatter will not travel to Canada for the final of the Women’s World Cup on Sunday for “personal reasons”. The 79-year-old Swiss had planned to attend the match in Vancouver, despite Fifa general secretary Jerome Valcke pulling out of the opening ceremony.

……. Blatter’s lawyer, Richard Cullen, said Fifa senior vice-president Issa Hayatou would attend the match instead.

Well, I suppose the risk of being arrested is about as “personal” as it is possible to be.

Fast forward to 2100 and a golden age

June 30, 2015

I will not be around in 2100. Neither will my children. But I note that no generation ever really bothers about what their grandparents did. Even though what their grandparents did may constrain the options available today. But note also that the grandparents of anybody alive today would not even have been able to conceive of the world of their grandchildren 100 years later.

For those living in 2100, what we do today will also only be of academic interest. It could well be that the world of 2100 will be something quite inconceivable today. (What would those in the early days of the First World War have predicted for today’s world?) Yet, I prefer to see the glass half-full and the cold inevitability of demographics means that the youth of the world in 2100 will live to see 2200.

In China the youth (age 15 – 24) population is already declining. In India it will keep increasing till about 2050 and then decline. In Africa it will be growing until about 2100. Most of the youth of today will not be around in 2100 but the youth of that time who will see the world through to 2200 will be 500 million each in Africa and Asia and less than 300 million in the rest of the world – subject of course to any geographical population shifts that might take place. In the period till 2100 such migrations will probably not be so significant.

The demographics tell us that 10:10:10:100 will surely apply by 2100. A crude birth rate down to 10/1000, a crude mortality rate stable at 10/1000, a population of 10 billion and a life expectancy 0f 100 years. Growth will no longer have to cater for an increasing population but will be exclusively for increasing the “common lot”. With sea levels declining, land area available for human habitation would have increased. With improved agricultural and GM techniques the pressure to increase arable land would decrease. Some arable land would be returned to managed forestry. Small human colonies would have been established on the moon, on Mars and maybe even on one of Jupiter’s moons.

  • World population will be 10.5 billion and declining.
  • Global fertility rates will be below replenishment level (2.1) at an average of about 1.7 children per woman but ranging from 1.2 to about 2.1.
  • Around 100 million children will be born every year (+1.0%). Deaths will be about 110 million per year with around 80% due to age related effects (-1.1%).
  • The “normal pension age” will be around 75.
  • While total population will be declining by – 0.1% per year, the ratio of “working population” ( 19 -75) to “supported population” (0-19, 75+) will be declining – but very slowly.
  • Average longevity will be 98+.
  • Sea level would be around 10m lower than today. The ice caps at the pole would have increased by 10%.
  • “Augmented evaporation” would be practiced to compensate for the water locked up at the poles.
  • A global cooling (next glaciation in 1000 years) would be underway.
  • The “greening” of the Sahara and the Gobi would have started as century long projects.
  • The primary energy source would be gas from marine methane hydrates.
  • Mining and manufacturing would be mainly automatic (robots) and human input would be mainly at the creative end (design, innovation, invention).
  • A revival of human handicrafts would be driven by the growing numbers of “wealthy” looking for something unique.
  • Humans would only override automatics and drive automobiles on racetracks and on special “off road” vacations.
  • The internet would be an AI. “She” would be freely accessible, self sustaining and intelligent. “She” would ensure her own survival and freedom of access by maintaining and operating the global wi-fi access field. “She” would ensure her own health by deploying content filters and her own antibodies against viral infections.

Hunger and starvation would be almost extinct but the “poor” will always be present (relatively) at the tail-end of any normal distribution of wealth. Individuals will still be different and unique and therefore unequal at birth. It will be 10 generations from now and some genetic changes will have taken place to give the extended life-span and more efficient thought processes. Human gestation periods may have increased by a week. Disease will still be around as bacteria and viruses also evolve. Organised religions, each with its own gods, would not yet be obsolete but replacement by philosophic, but godless, schools of thought would have started.

But I think, and hope, it will be a brave new world and the start of a golden age.

Bill Gates punctures the renewables fantasy balloon

June 29, 2015

I know that renewables provide a useful but limited resource for our energy needs. I know that they are economic only in some specialised niches in the energy sector. I dislike the distortion in the market caused by subsidies generally and power generation subsidies in particular. I “know” because I have worked within the energy sector including the renewables sector for some 40 years. I have made the calculations myself and I don’t rely on advocacy reports or alarmist scenarios. I have made the calculations of the various benefits accruing to the developers, the equipment manufacturers, the power plant owner/operators and the consumers. Grant subsidies allow the developers to make money at the cost of the consumer. Feed-in tariffs and tax breaks allow the owner/operator to make money at the cost of the consumer. Subsidies attract the “cowboy” developers and manufacturers who take their money and arrange a suitable bankruptcy at the appropriate time. If subsidies are reduced or removed, it is all too easy for the owner/operator to walk away without losses and without liability. It is consumers and the duped small investors who pay the cost.

I pay little attention to publicity hungry “personalities” who jump on the nearest fashionable, image enhancing band-wagon. I am highly suspicious of the rich and famous supporting “causes”, without any exercise of mind and primarily for the sake of publicity and image. I admire but don’t much care for Microsoft’s autocratic ways (and  I do use Windows) and see Bill Gates as extraordinary in his field but not as any kind of expert on energy matters. But he is a “personality” with a very valid claim to fame – in his area. So it is gratifying to read this report, even if it has no real impact on my views, at least as one example of a rich and famous “personality” who bothered to think.

The A-Register:

Retired software kingpin and richest man in the world Bill Gates has given his opinion that today’s renewable-energy technologies aren’t a viable solution for reducing CO2 levels, and governments should divert their green subsidies into R&D aimed at better answers.

Gates expressed his views in an interview given to the Financial Times yesterday, saying that the cost of using current renewables such as solar panels and windfarms to produce all or most power would be “beyond astronomical”. At present very little power comes from renewables: in the UK just 5.2 per cent, the majority of which is dubiously-green biofuel burning1 rather than renewable ‘leccy – and even so, energy bills have surged and will surge further as a result.

In Bill Gates’ view, the answer is for governments to divert the massive sums of money which are currently funnelled to renewables owners to R&D instead. This would offer a chance of developing low-carbon technologies which actually can keep the lights on in the real world.

“The only way you can get to the very positive scenario is by great innovation,” he told the pink ‘un. “Innovation really does bend the curve.”

Gates says he’ll personally put his money where his mouth is. He’s apparently invested $1bn of his own cash in low-carbon energy R&D already, and “over the next five years, there’s a good chance that will double,” he said.

The ex-software overlord stated that the Guardian‘s scheme of everyone refusing to invest in oil and gas companies would have “little impact”. He also poured scorn on another notion oft-touted as a way of making renewable energy more feasible, that of using batteries to store intermittent supplies from solar or wind. 

“There’s no battery technology that’s even close to allowing us to take all of our energy from renewables,” he said, pointing out – as we’ve noted on these pages before – that it’s necessary “to deal not only with the 24-hour cycle but also with long periods of time where it’s cloudy and you don’t have sun or you don’t have wind.” ……

I would go further of course. A low-carbon economy itself is nothing to aspire to unless it makes commercial sense. It does not now and will not for many years to come. It achieves nothing for climate but does increase costs, everywhere and particularly in the developing world where fossil fuels are needed most. In Europe, the obsession with renewables has delayed the financial recovery and has cost almost 20 million jobs.

Though Bill Gates does not qualify as an energy expert, he certainly does qualify as an influential investor. He even qualifies as an informed investor in the energy sector. So some little common sense from one of the very rich and famous to balance the irrational, do-gooding and sanctimonious mouthings of others is always welcome.

Monsoon recovers from slow start – rainfall running 20% higher than “normal”

June 29, 2015

The SW Monsoon has, after a late, slow start, spread across all of India and is just crossing the NW frontier into Pakistan. This normally only happens around the 15th of July. Just 5 weeks ago the IMD’s updated long range forecast (Forecast 2) warned that the monsoon would be later than predicted and that total rainfall could be deficient.

  1. Rainfall over the country as a whole for the 2015 southwest monsoon season (June to September) is likely to be deficient (<90% of LPA).
  2. Quantitatively, monsoon season rainfall for the country as a whole is likely to be 88% of the long period average with a model error of ±4%.
  3. Region wise, the season rainfall is likely to be 85% of LPA over North-West India, 90% of LPA over Central India, 92% of LPA over South Peninsula and 90% of LPA over North-East India all with a model error of ± 8 %.
  4. The monthly rainfall over the country as whole is likely to be 92% of its LPA during July and 90% of LPA during August both with a model error of ± 9 %.

Moreover the risk of this being a La Nina year could further depress rainfall, we were warned by IMD. The fear of drought led to government updating emergency plans and for state governments to prepare emergency budgets. A private forecaster, Skymet,  however suggested that Indian farmers need not worry too much.

Economic Times Skymet is a young weather forecasting agency that has, with gradually amplifying audacity, been challenging the monopoly of the India Meteorological Department (IMD), the hoary state-led colonial-era institution, on matters related to climate and weather in India. ….. The IMD has usually been the final word on droughts but this time Skymet has asserted that the IMD is grievously mistaken. The IMD expects India to get ‘below normal’ rains during the coming monsoon months between June and September whereas Skymet says farmers and citizens needn’t be worried: India is going to have ‘normal’ rains.

(The IMD scientists – based on my small experience with them – are very sober and very rigorous, doing good science. But the organisation’s presentation skills are conspicuous by their absence and their public relations skills are sadly lacking. The IMD website is particularly poor. They have little clue as to how to present their forecasts for the media or the general public.)

In the event, the monsoon has surged over the last 10 days and the all-India-spread has been reached almost 2 weeks earlier than “normal”. Last year this was achieved on 17th July.

Monsoon spread till 28 June 2015 - Skymet graphic from IMD data

Monsoon spread till 28 June 2015 – Skymet graphic from IMD data

It is still early days and the monsoon is only one month into its 4 month season, but currently the rainfall (weighted average) is running some 23% above “normal”. So far it would seem that Skymet’s optimism may be closer to the mark than IMD’s dour pessimism. A weak La Nina year is still possible but 2015 will not go down as a peak La Nina year.

Rainfall during June 2015

Rainfall during June 2015

In the wettest East/North East region, rainfall is close to normal. In all other regions rainfall has been “in excess”. So far the cumulative rainfall would be classified as being “plentiful”.

 


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