What we’re reading (3/26)
“The Bond Market Losing $2.6 Trillion Is Actually Good News” (Washington Post). “most investors expect —and market indicators such as breakeven rates on bonds corroborate — that the recent and expected future rate increases by the Federal Reserve will bring slow inflation to the long-term benefit of bondholders. There is a nightmare scenario for bonds in which the Fed cannot control inflation, leading to steep price declines in bonds and sharply reduced purchasing power of the income generated by bonds. But this is a feared future loss, not the past loss. And if you fear it, unhedged foreign bonds are an attractive option
“Big Oil Is No Longer ‘Unbankable’” (OilPrice.com). “It’s an open secret within energy circles that the eventual death of oil and thermal coal won’t come from environmentalists or even directly from renewable energy, but rather when big banks decide to stop financing it…[b]ut the lure of those juicy oil and gas dollars amid an energy boom has been proving hard for Wall Street banks to resist, leading to many throwing their ESG pledges out of the window.”
“U.S. Oil Boom Towns Risk Ghost Town Future” (Bloomberg). “For America’s small oil communities, getting the timing right can mean the difference between losing out on the last great boom and turning into a ghost town. At stake is not only hundreds of thousands of U.S. jobs, but also more than $138 billion generated annually through tax revenues for localities, states, tribes, and the federal government.”
“Scientist Who Predicted Arab Spring: Skyrocketing Wheat Prices Are Creating A Global ‘Regime of Risk’” (Vice). “[In 2010] Dr. Yaneer Bar-Yam, president of the Cambridge, Massachusetts-based New England Complex Systems Institute, sent a note to the U.S. government predicting exactly that a wave of protests would unfold in the Middle East in response to sudden spikes in global food prices. By mapping a range of factors that influence social unrest, he and his team tracked earlier riots to peaks in global food prices, identifying a price threshold above which protests become likely, and delivered an ominous message that a tipping point into conflict was near.”
“SEC Climate Disclosure Proposal Looms As Litigation Risk” (Wall Street Journal). “A U.S. Securities and Exchange Commission proposal that would mandate strict climate reporting from public companies could dramatically increase the exposure of these businesses to costly securities litigation. Lawyers that represent corporations and investors said that the proposal, released earlier this week, could be a potent source of securities fraud litigation, which targets companies over alleged lies or even half-truths told to the investing public.”
