Juggling Dynamite

Over the last two months, through liquidity interventions they insist are not ‘QE’, the US Fed has effectively reversed 40% of the quantitative tightening they had attempted over the preceding 21 months.  Relentlessly easier monetary conditions have enabled spending and record debt to continue longer than it otherwise would have this cycle, but the hangover now weighing on future spending and investment returns is also unprecedented.

Record corporate debt, especially in sectors like retail, real estate and energy, now pose concentrated risks for lenders and the economy overall.  See Oil and gas producers aim to slash spending for the second year in a row in 2020 to raise profits.  There is a reason that the Saudis are desperate to raise cash now by offloading shares in Aramco before oil prices fall further.

Danielle DiMartino Booth, CEO of Quill Intelligence and former Dallas Fed advisor, discusses U.S. retail sales beating expectations and why she thinks the Fed may never normalize its monetary policy.  Here is a direct video link.

Danielle was a guest on The Financial Survival Network with Kerry Lutz, talking about recent developments in the world economy and markets. You can listen to an audio clip of the segment here.
Listen to “Sorry to be Boring (Company That Is) – Danielle Park #4568” on Spreaker.
You can see a video explaining The Boring Company projects here.

For a good overview of cost and longevity comparisons between EVs and traditional internal combustion vehicles, see Electric cars are changing the cost of driving.

Greengate Power is building the largest solar project in Canada and one of the largest in the world in Alberta, Canada. This week on CKUA Radio’s Green Energy Futures we talk to CEO Dan Balaban who started Greengate less than ten years ago in Calgary, Alberta.  Here is a direct video link.

We have a lot of work, clean up and productive investment to do.  Many countries, cities and states are seeing the huge upside and getting on with it.  Canada needs to do likewise.  See some relevant points in Stop blame game; Alberta’s plight is our own doing:

Despite 15 years of prices from $50/barrel to $100/barrel (inflation-adjusted) there is little to show in the public purse to buffer our recession. Alberta’s Heritage Trust Fund is sitting under $20 billion, unlike Norway, which started its fund 15 years after Alberta and now has $1 trillion as insurance against the future. That is leadership in the public interest.

Royalties have declined from roughly 30 per cent in Lougheed’s time to close to three per cent in the last few years; and yet the Big Five (Suncor, CNRL, Cenovus, Imperial and Husky) continue to post billions in profits. Albertans aren’t told that most companies operating in Alberta are foreign-owned, taking those profits elsewhere!

Anyone close to industry knows the Western Sedimentary Basin is virtually empty and conventional companies have been losing money since 2009, transferring low-producing wells to junior companies, with growing numbers taking what they can and walking away from clean-up obligations; now totalling $260 billion.