Juggling Dynamite

The most highly valued realty in the world is built along continental coasts, and climate change will continue to devalue and erode it;  believe it or not.

The Science Guy himself Bill Nye was brought in to CNN’s New Day this morning to examine some of the devastating effects of the flooding in Louisiana that has left over 60,000 homes badly damaged.  Here is a direct video link.

Note the last minute of Ney’s comments are the most useful in terms of initiatives available to address these issues “if we just decided to do it, right now.” He also points out: “At CNN, you have essentially a climate change denier meteorologist, and knock yourselves out, but this is a big problem and it’s not going to go away.”

The anchor offers the usual head in sand response saying “a bigger conversation for another day…”  Off to a word from the sponsors!

No surprise there, having accepted an estimated $73,294,380 in contributions from fossil fuel companies, there are 182 climate deniers in the 114th Congress in 2016–144 in the House and 38 in the Senate. According to the U.S. Census, that means 202,803,591 people are represented by a climate denier in Congress. See the details here:  Most Americans disagree with their congressional representatives on climate change.

At the age of 80, David Suzuki admits we’ve won some battles in the fight against climate change, but so far, we’ve lost the war. Still, the Canadian scientist and environmental activist says it’s not too late. In an interview with Bloomberg TV Canada’s Amanda Lang, Suzuki says we’re devastating the planet at the peril of future generations, and both women and a reformed Senate could be part of the solution to stop it.

Here is a direct video link.

The world’s largest fossil fuel companies, Exxon Shell, BP and Chevron have more than doubled their debt levels since oil prices turned down in 2014.

Unfortunately they have not borrowed to proactively reinvent themselves into cutting edge energy companies focused on a diverse range of smart, clean resources and technology–nope, these dinosaurs have borrowed to maintain antiquated operations, share buybacks and dividend payments to shareholders.

See Big Oil Companies Binge on Debt:

Here is madness that any small business owner could recognize:  the companies spent more than 100% of their profits on dividends last year.  Sound management?

This year, the problem got worse. In the April-June period, Exxon paid $3.2 billion in dividends and had just $1.7 billion in net income, according to S&P Global Market Intelligence. Shell paid $1.26 billion in interest in the first half of 2016, compared with $726 million in the same period a year earlier.

The c-suite says it’s confident they should be able to maintain current operations and dividend payments so long as the oil price stays between $50 and $55 a barrel next year.  There is no plan B.  And of course, none of these experts ever expect price declines.

As usual management has been incentivized to focus on boosting share prices and dividends rather than smart business operations, and are taking another page from the Kodak playbook. (see:  We’re paying CEO’s all wrong). No need to evolve or innovate or embrace the future, just maintain the status quo, keep borrowing and hope that price turns up before the companies go bankrupt. How much did you pay for that MBA diploma again?

Bond funds and managers desperate for income have been buying the debt to date, but it seems already highly exposed banks, are finally getting nervous and pulling back.  See:  Oil patch taps funds for credit as Canadian banks pull back.