Comment of the Day
Video commentary for August 31st 2022
A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: India posts double digit growth, Nifty and Rupee rebound, Europe natural gas extends decline, Wall Street and bonds continues to trend lower.
GDP Jumps in 2Q, But Masks Sequential Slowdown
This article for Bloomberg Economics may be of interest to subscribers. Here is a section:
India’s GDP growth vaulted higher in the second quarter, primarily aided by a low base as the second virus wave cratered output in the year-ago period. The data, however, masks a sequential slowdown. Quarter-on-quarter output contracted at a larger pace than the typical seasonal drop, while year-on-year growth was sharply lower than the Reserve Bank of India’s forecast, suggesting the central bank might be nearing the end of rate hikes.
GDP growth jumped to 13.5% year on year in 2Q 2022, up from 4.1% in 1Q. That was lower than both the Bloomberg Economics forecast of 14.0% and consensus estimate of 15.3%.
Growth in gross value added -- which strips out tax and subsidy transfer payments -- came in even lower at 12.7% year on year, below both our forecast of 13.3% and the consensus estimate of 14.0%.
My view - Double digit GDP growth in a major economy is a standout event even if the headline figure was below expectations. There are not many countries where outsized growth is achievable and it is exceptionally unusual that Indian inflation is lower than either the US or EU at present.
Email of the day on European electricity prices
I wonder if it's possible to add the French and German electricity contracts in the chart library? thanks!
My view - Thank you for this suggestion. European energy has certainly become topical this year. Historically we have only updated prices for Nordpool contracts because so many Danish and Swedish electricity traders have come to The Chart Seminar. I do hope they remember acceleration is a trend ending.
A substantial stratospheric cooling event is now being observed over the Southern Hemisphere following a massive injection of water vapor
This article from Severe-weather.eu maybe of interest. Here is a section:
The submarine Hunga Tonga volcano in the South Pacific erupted violently on 15 January 2022. Tonga produced a massive volcanic plume that briefly reached 58 km (36 miles), touching the mesosphere. Below we have infrared satellite imagery of the eruption. We can see the warmer (green-yellow) cloud in the stratosphere and the colder (black-white) cloud in the troposphere.
And
Like sulfur, water vapor has a cooling effect, but not at the surface. Instead, it actually cools the stratosphere because it reflects the incoming solar radiation. It also prevents the heat from escaping, thus actually warming the surface.
So how much water was injected into the stratosphere? Based on observations and measurements, the normal amount of water in the stratosphere is around 1560 Teragrams.
Following the eruption of Hunga Tonga, the total amount of water increased to over 1700 Teragrams, which is a 10% increase in total stratospheric water vapor content. This is a large amount, coming from just one event.
And
The image below was made by Simon H. Lee and also shows the July 2022 mid-stratosphere temperature anomaly. The cross markings in the southern hemisphere mark the record minimal temperatures, which span in a belt around the whole southern hemisphere.
And
A negative NAO pattern means higher pressure over the north Atlantic and Greenland and lower pressure to the south. The image below shows the temperature pattern of a negative NAO winter season. You can see colder temperatures over the northern and eastern half of the United States and Europe.
My view - This Tonga volcanic eruption is likely to have a multi-year effect on the weather. The southern hemisphere is already experiencing a colder than normal winter. If that translates into a colder winter for Europe it will contribute to even more volatile energy pricing.
Greenland ice melt has already locked in 10 inches of sea level rise
This article from NewAtlas may be of interest. Here is a section:
To understand how this melting ice will impact sea levels around the world, scientists use computer models of ice flow and complex climate interactions. According to the authors of this new study, this approach has shortcomings in that they are imprecise and don't account for a number of factors scientists are observing in the field. These include more rain that is accelerating the melting of surface ice, an influx of tropical ocean currents into Greenland's fjords, and the darkening of the sheet surface that causes it to absorb more heat.
"We’re observing many emerging processes that the models don’t account for that increase the ice sheet’s vulnerability," study author Alun Hubbard, Professor of Glaciology at University of Tromsø, writes in an accompanying piece for The Conversation.
My view - So if we change shorten the average from 40 years to 20 years and then linearly project that higher number forward, we get a headline grabbing doomsday prediction.
The problem with making such bombastic predictions is the capacity of the general population to sustain a feeling of terror is not infinite. Eventually people settle down into a fatalistic emotional state where they just don’t care anymore. Sea levels rising 10 inches by 2100 is not going to put food on the table today.
It surprises me that there is still no widespread acceptance that improving living standards are the solution to just about every social or environmental problem.
When people are better educated and have solid working conditions, they have more regard for luxuries like a safe, clean environment. Take care of people and everything else takes care of itself.