Juggling Dynamite

As I wrote last June in Trump catalyst: thinking people moved to action at last? the upside of a Trump Presidency was the potential prod to individual action among complacent masses.  And happily, that seems to be happening.  See Watch the growth of cities using 100% renewable energy:

“There’s been a sharp rise in environmental reporting since the last time we did this,” says Kyra Appleby, head of CDP’s cities program. “There has been a lot of momentum in U.S. cities in the absence of federal leadership on climate change. You are seeing large cities across the U.S. making the switch.”

U.S. cities already over 70% include Seattle; Eugene, Oregon; and Aspen, Colorado. Burlington, Vermont, is the most renewable, with fully 100% clean electricity already. Atlanta, Georgia, and San Diego, California, are the latest to commit to going to 100% of renewables, joining about 50 others, according to separate figures kept by the Sierra Club.

The role of cities is crucial for fighting climate change, as they account for about 70% of the U.S.’s emissions. The Sierra Club says if the whole U.S. Conference of Mayors, representing 1,481 cities, committed to 100% renewables, it would have a bigger impact than if the whole U.S. followed through on the Paris Agreement

Danielle was a guest on The Financial Survival Network with Kerry Lutz talking about recent developments in the world conomy and markets.  You can listen to an audio clip of the segment here.

Some $4 trillion in share buybacks by corporations since 2009 have been a indiscriminate force levitating stock prices to valuation extremes this cycle.  It’s also been a non-productive waste of funds enabling asset bubbles, piling on reckless debt and financial alchemy at the expense of long term investment, innovation, strength and stability.  We have been down this destructive road before which led to the banning of buybacks as illegal market manipulation.  And very obviously, we need to ban them again.  This is a huge pillar of the change that must occur to get businesses focused on productive investment once more and stop the debt plague that ails us from metastasizing further.  See more here The end of the low volatility regime (continued):

Until the early 1980s, buybacks were illegal in the U.S. due to concerns executives would use them to manipulate share prices. Today, politicians on both sides of the aisle are threatening restrictions, if not a reinstatement of the ban. Democrats have already made it clear buybacks will be a primary attack point as they seek to sway public opinion about the tax law and take back the House and Senate in the midterms. If rising interest rates and market volatility don’t curb buybacks, politicians may step in and do the job anyway.

One way or another, as the low-volatility regime winds down, buybacks appear destined for a day of reckoning. They have played far too big a role in the QE era not to cause complications as QT progresses. In the words of Warren Buffett: “Only when the tide goes out do you discover who’s been swimming naked.”

The IMF estimated in 2017 that 22% of US corporations were at risk of default when interest rates rise.  No surprise there.  Bankruptcy probability has risen with debt (in red) used for share buybacks (blue) here since 1990.