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While we wait for the October real estate data to start coming out later this week, BNN yesterday reported on Warren Buffett's plan to invest in a new Alberta Wind Farm. "The Rattlesnake Ridge Wind Project" will be located southwest of Medicine Hat and produce enough energy to supply the equivalent of 79,000 homes. Apparently demand is bankable because an "unnamed large Canadian corporate customer has signed a long-term power purchase agreement for the majority of the Rattlesnake Ridge energy output..." The Government of Canada chart mashup shows Alberta to be the 3rd largest renewable energy supplier via wind energy in Canada, and BNN goes on to report that Buffet's Berkshire Hathaway Energy "...also owns AltaLink, the regulated transmission company which supplies electricity to more than 85 per cent of the Alberta population."

​Warren Buffett's firm invests $200M in Alberta wind project
Bill Christensen, V.P. corporate development at BHE Canada, discusses an Alberta wind farm that the company has invested in. BNN Bloomberg OCT 29, 2019

​Neil Young - Four Strong Winds (Live at Farm Aid 1993)
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As the report concludes in part: ​"Governments must stop spending financial and political capital to further the interests of one industry whose aspirations will literally devastate the planet, at the expense of all of us." NEWS ITEMS: OCT 2019 CNN: Russian scientists say they've found the highest-ever 'flares' of methane in Arctic waters OCT 2019 TruthOut.org: ExxonMobil Is Still Bankrolling Climate Science Deniers SEP 2019 CBC News: How 'organized climate change denial' shapes public opinion on global warming. FEB 2019 University of Washington: Early spring rain boosts methane from thawing permafrost by 30 percent JAN 2019 Scientific American: Greenland Has Yet Another Methane Leak JUN 2018 American Geophysical Union: Very Strong Atmospheric Methane Growth in the 4 Years 2014–2017 SEP 2016 Engineering & Technology Magazine: Arctic methane levels reach new heights.

Methane: The Arctic's hidden climate threat.
Natalia Shakhova's latest paper. Jun 23, 2019​

​Even with existing levels of warming and melting of the Arctic region, submarine methane releases linked to clathrate breakdown have been discovered,[32] and demonstrated to be leaking into the atmosphere.[5][34][35][36] A 2011 Russian survey off the East Siberian coast found plumes wider than one kilometer releasing methane directly into the atmosphere.[32] According to monitoring carried out in 2003/2004 by Shakhova et al., the surface layer of shelf water in the East Siberian Sea and Laptev Sea was supersaturated up to 2500% relative to then present average atmospheric methane content of 1.85 ppm. Anomalously high concentrations (up to 154 nM or 4400% supersaturation) of dissolved methane in the bottom layer of shelf water suggest that the bottom layer is somehow affected by near-bottom sources. Considering the possible formation mechanisms of such plumes, their studies indicated thermoabrasion and the effects of shallow gas or gas hydrates release.[4] Wikipedia Arctic Methane Emissions Page

New Arctic lakes could soon be a major source of atmospheric methane. August 20, 2018​

For centuries, a massive store of carbon has been locked underground in the Arctic's permanently frozen soil known as permafrost. As Earth's climate continues to warm, that carbon has begun to leach into the atmosphere, the result of microbes waking up and digesting once-frozen organic materials. A new NASA-funded study focuses on a mechanism that could accelerate the release of this atmospheric carbon, the result of thermokarst lakes. These lakes form when thawing permafrost causes the ground to slump, creating a depression that collects rain and snowmelt and perpetuates a cycle of further permafrost thaw. NASA August 2018

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​While we wait for the June real estate stats to come out, let's look at the relationship between WTI Oil prices and real estate in Canada. The top chart shows the WTI oil prices dropping into month end lows and as the inset seasonal chart shows, the drop is happening when the price variability is at one of the four low points in the year which suggests this year may not be much different. Now look at the Canadian scene via the TSX cash markets in the chart below. As the chart plots since 2015 demonstrate, when the energy sector price drops so does the real estate sector. These cash markets react quickly to changes "on the ground" and are not restricted by the handicap of finding a buyer.  The relationship between oil prices and real estate are clearly seen in the Calgary housing chart with its total sales plot and the TSX Energy plot overlays, both of which have been descending since 2013 while the energy plot itself has been dropping since the July 2008 peak. It also shows up on my chart of TSX indexes for Energy, Real Estate, Financial Services and Gold... and gold is maybe leading the way for another leg down. Gold heading down makes sense since the U.S. Dollar (my chart of Canadian real estate in USD)  has been rising since 3Q 2017 and a high USD/CAD ratio can quickly unwind marketplace sentiment when it comes to a speculative commodity which real estate has been transformed into with the global suppression of leverage costs.   ​

​Oil Breaks Down: Should Stock Market Bulls Be Worried?

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From CHRIS KIMBLE, technical market analyst:

A couple of weeks ago, I wrote an article about crude oil’s recent correlation to the S&P 500 (stock market) and that its initial move lower may be sending a bearish signal to stocks. Since then, crude oil has fallen sharply through its up-trend line, sending a bearish message to Oil bulls.

Is the S&P 500 the next to fall?

Below is an updated chart of Crude Oil showing the multi-month downtrend (1), and the ultimate break down through its near term up-trend line (2).

More importantly, from a pattern perspective, Crude Oil is putting in a large weekly reversal bar (bearish). This warrants watching as Crude Oil and the stock market remain highly correlated since their peak in October. Stay tuned!

Thanks to Chris Kimble for the chart above; get a FREE TRIAL to his work.

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While we wait for the March 2019 housing data the IEA notes that CO2 emissions have more than doubled since the early seventies and increased by around 40% since 2000 and they rose by 1.7% in 2018. ​ ​

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Chris Hayes All In with AOC
The Green New Deal March 29, 2019
​

​Top 10 Climate Change Myths - April 2018
Peter Hadfield (Youtube handle "potholer54")
a British freelance journalist author, geologist
​

The impact of exposure to air pollution
on cognitive performance

Over 92 per cent of the world’s population are continually breathing in unsafe air, which has led air pollution to be designated a public health crisis. 

Conclusions
This paper estimates the contemporaneous and cumulative impacts of air pollution on cognition by matching the scores of verbal and math tests given to people age 10 and above in a nationally representative survey with local air quality data according to the exact dates and locations of the interviews.

​We find that accumulative exposure to air pollution impedes verbal test scores. As people age, the negative effect becomes more pronounced, especially for men. The gender gap is particularly large for the less educated.

Our findings about the damaging effect of air pollution on cognition, particularly on the aging brain, imply that the indirect effect on social welfare could be much larger than previously thought. A narrow focus on the negative effect on health may underestimate the total cost of air pollution.

Full Report from the Proceedings of the National Academy of Sciences, September 2018

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As I have been pointing out on my chart of TSX INDEXES for Energy, Real Estate, Financial Services, Gold and the Bank of Canada Commodities in $CAD, that...

...the Thompson Reuters CRB chart embedded in the chart shows that global commodities measured in USD has been dropping since 2008, although recently since September (2018), there has been a near term rally in commodities... BUT

CLICK TO GO TO ORIGINAL POST

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China’s Slower Credit Growth
Underscores Worries Over Economy
​Bloomberg, Aug 2018
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It's a big day in the Oil Markets as the price of crude slips below the sentiment price of US$50 the list is growing of oil majors who are withdrawing from further investment in Alberta.  Also yields in the bond markets are continuing their rising trend; ie: the cost to finance is rising.  ​

Al Gore on the Solar Revolution - TED Talk Clip 1.50 min
2 solar home systems sold every minute in Bangladesh

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Zombie real estate in Vancouver BC is a problem. The owners have placed a high value on keeping them empty when vacancy rates are at historical lows. See the Beautiful Empty Homes  Vancouver archive. ​In March 2016, theGeorgia Straight reported some 10,000 condos were vacant. The city now wants to tax the owners between a ½% and 2% of the assessed value; CBC News Sept 14, 2016.

​The Democratization of Production
​Be lazy like a fox. WikiHouse

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​Tesla's Powerwall 2 and Solar Roof Launch

The sun provides more than enough energy in just one hour to supply our planet’s energy needs for an entire year. Your home can capture this free, abundant energy source through rooftop solar tiles, turning sunlight into electricity for immediate use or storage in a Powerwall battery. Tesla, October 28, 2016

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Grim expense report: Alberta's debt soars to $10.9 billion
​CTV NEWS August 24, 2016 

MEANWHILE: Tesla Master Plan Part Deux July 20, 2016
The Grand Opening of the Tesla Gigafactory 
Building the world’s largest battery factory
to accelerate a sustainable energy future. July 30, 2016

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While we wait for the April real estate data to dribble in, let's look at the commodity sector that peaked in 2011 and is now threatening to break a major uptrend channel and possibly retest the 2006 lows; a time when the Yield Curve inverted and soon after the BoC and U.S. Fed etal went on a ZIRP to NIRP bender in an effort to spark inflation. Clearly low rates have not produced CPI inflation but a speculative frenzy for Yield.

...the energy high-yield default has soared to a record 13% rate, surpassing the 9.7% mark set in 1999, according to Fitch Ratings.

AND THIS from Bloomberg May 1, 2016 Saudi Arabia's determination to keep pumping more oil into global markets brings to mind its former oil minister Sheikh Yamani, who said back in 2000 that the Stone Age did not end for a lack of stones, and the oil age will not end for a lack of oil.Those working for him at the time, interpreted this as a warning to OPEC about the pursuit of high oil prices: namely, that it would just speed up the development of alternative technologies and drive away customers, leaving oil sitting beneath the ground without buyers.Sixteen years later, the kingdom's leaders seem to have heeded his warning. Both Deputy Crown Prince Mohammed bin Salman and oil minister Ali al-Naimi have said they will no longer subsidize high-cost oil production by limiting supply. If there's oil to be left under the ground, they're determined it won't be Saudi Arabia's.

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Battery Powered Homes

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The aging boom in real estate has been fabulous for sellers unloading risky and depreciating assets. A recent study of "good and bad booms" (abstract below) suggests that as productivity declines over an aging boom, the risk of insufficient collateral becomes evident. The U.S. productivity chart has momentum relative to Canada's.

Abstract: ​Good Booms, Bad Booms
​​by Gary Gorton and Guillermo Ordoñez, February 2016
NBER Working Paper No. 22008 

Credit booms are not rare and usually precede financial crises. However, some end in a crisis (bad booms) while others do not (good booms). We document that credit booms start with an increase in productivity, which subsequently falls much faster during bad booms.

We develop a model in which crises happen when credit markets change to an information regime with careful examination of collateral.

As this examination is more valuable when collateral backs projects with low productivity, crises become more likely during booms that display large productivity declines. As productivity decays over a boom as an endogenous result of more economic activity, a crisis may be the result of an exhausted boom and not necessarily of a negative productivity shock. We test the main predictions of the model and identify the component of productivity behind crises.

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​Canada needs stronger business investment
Glen Hodgson, Conference Board of Canada
​
“2015 was another mediocre year for the Canadian economy, growing by only 1 per cent in 2015 after a technical recession in the first half of the year. The weakest aspect of Canada’s economy this year was the feeble performance of private investment, projected by the Conference Board of Canada to contract by nearly 8 per cent compared to 2014 levels. Much of this contraction is due to the sharp pullback in investment in the oil patch, now expected to decline by 40 per cent over the course of the year. That result for 2015 is depressing enough—but as the chart shows, Canada’s poor private investment performance in 2015 was not a one-time thing.
​
There’s more to this story than just low oil prices as Canadian firms continue to sit on mountains of cash embedded in their balance sheets. As a result, it is no surprise that we are in the midst of a multi-year period where growth in private investment is weak—the lagging edge of our economy—with little sign of a significant turnaround in 2016. A prolonged period of little or no real growth in private investment is bad news for productivity growth, since it suggests we are missing opportunities to invest in new technology, build our productive base and boost the competitiveness of the Canadian economy. What could prompt stronger investment growth? The growing U.S. recovery should boost demand for Canadian exports and eventually cause firms to invest in order to expand their productive capacity and seize the available export opportunities. But until there is evidence that Canadian firms are responding to a stronger order book, private investment will remain the lagging edge of our economy.”

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​Global GDP is slumping
Bob Hoye, Institutional Advisors
​
“The graph of global nominal GDP runs from 1981 to date and covers another “new era” of financial manias. Our era has been fabulous as reckless adventurers have dominated financial markets as well as central banks. As with previous examples, the action has been mainly in financial assets with real estate prices soaring in the financial centres. Although the experiment in ambitious policy has seemed without limit, there was a severe setback in 2009.

​The alert to the “Great Recession” was classic. Credit spreads reversed to widening in June 2007 and commodities reversed to weakening in June 2008. The rest as the saying went, was history. At -5 per cent, the current slump in global GDP is almost as severe as the one in 2009. This was preceded by the reversal in credit spreads and weakening commodities that began in June 2014. Central bankers have been charged with preventing contractions. This diminishes perceptions of risk and accounts get leveraged. Throughout history margin clerks have always trumped central bankers. This time around, central banks are highly leveraged.”
​

Bob Dylan - Things Have Changed