Why This Oil Rally Won’t Last

Authored by Nick Cunningham via OilPrice.com,

After weeks of gloom, the oil market is tightening up once again. But it’s not clear how long the upward cycle will last. OPEC admitted this week that it may need to keep the production cuts in place, perhaps beyond the latest extension, because of soaring production from U.S. shale.

A combination of geopolitical tension in the Persian Gulf, outages in Venezuela and Iran, a pending interest rate cut by the Federal Reserve, and the brewing storm in the Gulf of Mexico has led to strong price increases in oil over the last few days.

The rally might have “further to go,” as Standard Chartered put it in a recent note to clients. “We think the rally is likely to continue, allowing Brent to move well above USD 70/bbl and WTI to test above USD 65/bbl,” the investment bank wrote. “Fundamentals are supportive in Q3; we project a 0.5 million barrels per day (mb/d) global supply deficit,” while data from the IEA and OPEC suggests an even larger deficit, analysts with Standard Chartered said.

They are not alone. The EIA reported an enormous 9.5-million-barrel decline in inventories last week.

“This fourth consecutive weekly decline in US crude oil stocks shows that the US oil market is now tightening too,” Commerzbank said. Storms in the Gulf of Mexico and rising tension in the Middle East are also bullish factors.

“The overall situation points to further rising oil prices in the short term,” Commerzbank concluded.

But, some of these are temporary factors that could dissipate, especially with shale supply still growing quickly. In OPEC’s latest Oil Market Report, the group laid out the challenge facing oil exporters. Demand growth may only reach 1.14 million barrels per day (mb/d) this year, but supply growth from non-OPEC countries alone could top 2.05 mb/d. Next year, non-OPEC supply could jump by another 2.4 mb/d, with demand again only growing by 1.14 mb/d.

In other words, OPEC+ may be stuck with the production cuts, forced to perpetually extend them in a Sisyphean attempt to keep oil prices from collapsing. The supply curtailments do indeed put a floor beneath prices, but that only serves to prop up even more shale drilling.

“Infrastructure constraints – particularly pipeline capacity in the Permian, the downward trend in rig counts, lower activity by service companies and less fracking – indicate a growth slowdown in 2019,” OPEC wrote in its report. “However…[w]ith 2.5 mb/d of expected new pipeline capacity from the Permian to the USGC, production from the booming Permian Basin is forecast to grow without any constraints.” More pipelines means more drilling, which ultimately means more supply hits the global market.

New export terminals also come into play. “The pipeline expansion along with port enhancements for more exports – particularly in Corpus Christi – is expected to increase from a current level of about 1 mb/d to around 2.9 mb/d by the end of 2020,” OPEC said.

OPEC’s conundrum is stark. Although written in the bland language of a typical forecast, OPEC’s July report offered a rather grim outlook for the cartel. “Demand for OPEC crude for 2019 was revised up by 0.1 mb/d from the previous report to stand at 30.6 mb/d, 1.0 mb/d lower than the 2018 level,” the report said. “Based on the first forecasts for world oil demand and non-OPEC supply for 2020, demand for OPEC crude for 2020 is projected at 29.3 mb/d, 1.3 mb/d lower than the 2019 level.”

In other words, as U.S. shale continues to grow at a brisk pace, OPEC is faced with the possibility that its production cuts are insufficient in balancing the market. Is OPEC suggesting that it might not only need to extend the production cuts, but that it might need to slash output even further in 2020? Time will tell, but the initial look into next year’s supply/demand figures are not encouraging if you are a member of the cartel.

via ZeroHedge News https://ift.tt/2LiPd48 Tyler Durden

My New Washington Post Op Ed on How Federalism Became Great Again on the Left

The Washington Post Outlook section has just published my article on “How Liberals Learned to Love Federalism.” Here’s an excerpt:

This is what the battle over federalism looked like in the United States for many decades: Conservatives sought to limit federal power over state and local governments, and liberals tried to expand it….

For many liberals, the ideal of state and local independence was permanently tainted by Southern states’ “massive resistance” to federal attempts to remedy racial discrimination in the 1950s and ’60s. “If one disapproves of racism, one should disapprove of federalism,” political scientist William Riker categorically asserted in 1964.

But in the Trump era, many progressives are rediscovering the merits of federalism. They are finding that state and local governments can serve as an important check on a president whose policies they deplore, and — even more striking, given the history of the debate — that states and cities can provide valuable protection for vulnerable minorities….

Some of the most important legal battles over federalism in recent years are playing out around the question of whether “sanctuary cities” and states that oppose the Trump administration’s immigration policies must help enforce them. So far, judges from across the ideological spectrum have largely sided with the sanctuary jurisdictions. But conflicts between “blue” jurisdictions and the federal government have flared up across a range of policy areas, from drugs to carbon emissions to physician-assisted suicide.

Liberals, in short, are helping to make federalism great again.

Some politicians are surely using federalism opportunistically, as a tool to promote their policy preferences. This new liberal appreciation for a legal doctrine they had long resisted may not last into the next Democratic administration. But Americans of every political stripe have much to gain from stronger enforcement of constitutional limits on federal authority. One-size-fits-all federal policies often work poorly in a highly diverse and ideologically polarized nation. Giving more power to states and localities can make it easier for political adversaries to coexist in relative peace….

Federalism can also enhance Americans’ opportunities to “vote with their feet,” moving to other states or cities whose policies align with their own. With such moves, millions of Americans have, historically, improved their political and economic circumstances….

Of course, it is possible that recent liberal praise for constitutional constraints on federal power will prove to be an example of “fair-weather federalism,” the tendency of both left and right to rely on federalism whenever their opponents control the White House, only to jettison it when they themselves are in power…. But there may be a trend here that goes beyond short-term partisanship….

Liberals and conservatives alike can benefit from stronger constraints on federal power. Each party can gain from protecting local diversity and experimentation, and from the insurance federalism provides in times when its opponent hold the reins of power in Washington. Left and right can agree on the need for substantial constitutional limits on federal power, even if they differ on exactly how tight those limits should be….

Liberals may be tempted to abandon their newfound interest in federalism when and if they regain the White House. The “democratic socialist” wing of the Democratic Party would probably prefer to expand federal power over many issues. But Democrats would do well to remember that Trump may not be the last president whose policies pose a threat to minorities or imperil blue-state priorities on the environment and other issues. Nor are the dangers of overcentralization in a diverse society likely to disappear anytime soon.

Part of the article is devoted to Trump-era legal battles over federalism and sanctuary cities—the area where the shifting political valence of federalism is most strikingly evident. I discussed those cases in greater detail in my recent Texas Law Review article about them.

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The Newest Drama Between Donald Trump and Paul Ryan

A new book excerpt has stirred up a new fight between President Trump and former House Speaker Paul Ryan.

Politico‘s Tim Alberta will release his new book, “American Carnage,” next week. The book advertises a front-row seat to some D.C. drama. Namely, the “Republican Civil War” in the face of Trump’s presidency. For example, readers can follow the reactions to the release of Trump’s controversial “Access Hollywood” tapes, both by his high-profile campaign staff and party leaders.

According to The Washington Post, the book details some of Ryan’s thoughts about Trump’s preparedness for public office.

“I told myself I gotta have a relationship with this guy to help him get his mind right,” Ryan was quoted. “Because, I’m telling you, he didn’t know anything about government…I wanted to scold him all the time.”

The book also suggested that Ryan’s decision to not seek reelection in the 2018 midterms was an “escape hatch” from his highly contentious relationship with the president. A spokesperson for Ryan denied this claim, saying that Ryan retired “because he wanted to spend more time being a father and a husband.”

In response, the president tweet-blasted Ryan over his past leadership and vice-presidential run on the failed 2012 Mitt Romney ticket.

Trump also tweeted that Ryan failed to secure funding to build a southern border wall while Republicans controlled both chambers of Congress.

“He quit Congress because he didn’t know how to Win,” Trump said of Ryan.

Romney responded to at least one of Trump’s claims by tweeting support for Ryan. “The fault for our 2012 loss is mine alone,” he wrote on Friday.

Trump was still defensive on Friday afternoon when he told the press that Ryan was a “terrible Speaker” and a “baby.”

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Pennsylvanian Millennials Are Screwed: Have Most Student Debt, On Average, Than Any Other State

The student debt crisis is rapidly expanding, hitting a new record high of $1.6 trillion in 2019 and surpassing auto loans and credit card debt post-GFC. About 44 million Americans, or 20% of adults, have insurmountable student debts.

According to Douglas McIntyre with 24/7 Wall Street, who examined brand-new student loan data from LendEDU, told KYW Philadelphia that college graduates in Pennsylvania, on average, have highest student loan debts in the US, coming in at $36,000 per graduate.

“There are some other notable things about the state, which is the number of graduates with debt is 67%, which is the fifth highest of all the states,” McIntyre said.

The life-altering impacts of student loan debt on millions of millennials has been astonishing.

Many are financially crippled in the gig-economy, working 2 to 3 jobs while barely affording to service their debts. Home purchasing, weddings, and starting a family have also been put on hold; millennials can no longer afford the American dream.

While the Deep South struggles with high amounts of credit card debt; student loan debt is heavily concentrated in the Northeast.

As the student debt crisis becomes more urgent ahead of the next recession, Democratic candidates have called for debt forgiveness programs that would wipe out student debts.

With the 2020 US presidential election 482 days away, millennials with insurmountable student debts located in Pennslyvania and other states in the Northeast could cast their vote for a Democrat, with hopes that their debts would be erased. 

via ZeroHedge News https://ift.tt/2jEez03 Tyler Durden

Are Young American Jews as Left-leaning as the Media Suggests?

If one reads both the secular and Jewish American media, one gets the impression that a virtual revolution is going on among the younger generation of American Jews. Focusing on various leftist and left-leaning Jewish groups, such as JStreet U, IfNotNow, Open Hillel, and Never Again Action, I’ve read dozens of articles suggesting that young Jews are overwhelmingly extremely progressive, hostile to the mainstream Jewish establishment for being too “conservative” (event though that establishment is overwhelmingly liberal on the standard American political spectrum), and in a state of rebellion against what they perceive to be the Jewish establishment’s failure to adequately “resist” Donald Trump and to challenge “the occupation” in Israel.

This narrative makes some intuitive sense. After all, young Americans in general are more left-leaning than older Americans, and there the omnipresent left-leaning young Jewish cohort would logically be much bigger now than it was in more conservative eras. Top that off with the fact that the Reform movement has come to dominate American non-Orthodox Jewish religious life, and that this movement has increasingly blurred the lines between normative Judaism and left-wing politics.

And yet, a recent survey by the Democratic GQR polling firm, commissioned by the Jewish Electorate Institute, tells a different story. Here is the key chart:

Note that millennials and under-30s approve of Donald Trump at higher rates than older Jews. And that’s not all. The chart mysteriously excludes Orthodox Jews from its data on Trump approval by age group, but only from the younger cohorts. Thanks to high Orthodox birth rates, Orthodox outreach efforts, and widespread assimilation among the non-Orthodox, Orthodox Jews are a much larger percentage of the younger Jewish cohort than of older Jewish cohorts. Orthodox Jews are approximately 10% of all American Jews, but 25% of those under 18. 20% seems a reasonable estimate of the percentage of American Jews 18-30 who are Orthodox. And 57% of Orthodox Jews approve of Trump, but let’s round that up to 60% for the younger cohort, since younger Jews in general are more approving of Trump. That means that while only 22% of “greatest generation” Jews approve of Trump, approximately 37% of American Jews under 30 approve of Trump. By contrast, a recent poll showed that only 33% of Americans ages 15-34 approve of Trump.

If true, this would be especially remarkable because young American Jews tend to not be “religious” and live in coastal urban areas, two demographic indicators that strongly predict hostility to Trump.

Of course, the JEI poll needs to be confirmed by other data. And it’s entirely possible that it’s both true that young Jews are more conservative/Republican/supportive of Trump, and that those who aren’t are more leftist than prior generations. But various groups are pushing a narrative that the American Jewish establishment needs to become even more “progressive” if it doesn’t want to lose the attention of young American Jews. In turns out that, if anything, the opposite might be true.

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Is Climate Change Loading Tropical Storm Barry Up With Extra Rain?

Tropical Storm Barry is expected to make landfall in Louisiana later today. The National Hurricane Center (NHC) projects that the slow-moving storm could drop up to 25 inches of rain on Baton Rouge and 15 inches on New Orleans.

For comparison, since 1898 only four downpours in New Orleans have exceeded one-day totals of more than 10 inches. Yearly rainfall totals for New Orleans and Baton Rouge average just a bit over 60 inches in each city.

Consider also that over 16 inches of rain fell on Houston on August 27, 2017. Records going back to 1921 show that Houston had never before experienced such a double-digit daily rainfall total. That was during Hurricane Harvey, which dropped more than 60 inches of rain while it dawdled over the Houston area for several days. That was the greatest amount ever recorded in the continental U.S. from a single storm.

It is now customary for reporting on big weather events to include speculation on how man-made climate change may be affecting them. In its story about Barry’s impending landfall, The New York Times quotes Lawrence Berkeley National Laboratory researcher Christina Patricola: “Regardless of the methodology that you use, we’re starting to see more and more evidence that climate change so far has been enhancing the rainfall on some of these recent hurricane events.”

Patricola is co-author of a 2018 Nature study that applied climate models to observational data to calculate how much warming added to the precipitation in a suite of recent hurricanes. Among other things, that study found evidence that warming boosted rainfall amounts in Gulf Coast hurricanes Katrina, Irma, and Maria by 6 to 9 percent. Another 2018 Nature study found that since 1949 tropical cyclones have slowed down by about 10 percent; it suggested that human-caused climate change might be contributing to the change. Slower hurricanes tend to dump more rain on the areas over which they linger. However, other researchers think the alleged slow-down may be an artifact deriving from changes in the way cyclones have been detected over time.

Interestingly, another 2018 article, this one in the Bulletin of the American Meteorological Associationfound that “since 1900 neither observed [continental United States] landfalling hurricane frequency nor intensity shows significant trends.” Hurricanes hitting the U.S. may be getting wetter and slower, but their winds are not stronger and they are not more frequent. That said, in May the World Meteorological Organization comprehensively reviewed the scientific literature and concluded that “it is likely that greenhouse warming will cause hurricanes in the coming century to be more intense globally and have higher rainfall rates than present-day hurricanes.”

Meanwhile, a 2018 article in Nature Sustainability reports that normalized losses due to hurricanes remain basically flat. The researchers “normalize” the losses by attempting to estimate direct economic losses from a historical storm as if that same event were to occur under contemporary social conditionsThe upshot we’re losing more buildings and infrastructure, but only because there is much more property to be destroyed along the Atlantic and Gulf coasts than there used to be. Once you adjust for that, the proportion of assets damaged by hurricanes even possibly amplified by climate change is not increasing.

Whatever the effect of climate change may have on Barry’s destructive potential, let’s hope that the people in the storm’s path stay safe.

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The Newest Drama Between Donald Trump and Paul Ryan

A new book excerpt has stirred up a new fight between President Trump and former House Speaker Paul Ryan.

Politico‘s Tim Alberta will release his new book, “American Carnage,” next week. The book advertises a front-row seat to some D.C. drama. Namely, the “Republican Civil War” in the face of Trump’s presidency. For example, readers can follow the reactions to the release of Trump’s controversial “Access Hollywood” tapes, both by his high-profile campaign staff and party leaders.

According to The Washington Post, the book details some of Ryan’s thoughts about Trump’s preparedness for public office.

“I told myself I gotta have a relationship with this guy to help him get his mind right,” Ryan was quoted. “Because, I’m telling you, he didn’t know anything about government…I wanted to scold him all the time.”

The book also suggested that Ryan’s decision to not seek reelection in the 2018 midterms was an “escape hatch” from his highly contentious relationship with the president. A spokesperson for Ryan denied this claim, saying that Ryan retired “because he wanted to spend more time being a father and a husband.”

In response, the president tweet-blasted Ryan over his past leadership and vice-presidential run on the failed 2012 Mitt Romney ticket.

Trump also tweeted that Ryan failed to secure funding to build a southern border wall while Republicans controlled both chambers of Congress.

“He quit Congress because he didn’t know how to Win,” Trump said of Ryan.

Romney responded to at least one of Trump’s claims by tweeting support for Ryan. “The fault for our 2012 loss is mine alone,” he wrote on Friday.

Trump was still defensive on Friday afternoon when he told the press that Ryan was a “terrible Speaker” and a “baby.”

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The World Acquires More Gold While China Is Dumping Treasuries

Authored by Rory Hall via The Daily Coin,

We are told China’s economy is hurting, the “trade wars” are working and bringing China to it’s knees. From where I sit nothing could be further from the truth.

Currently China holds well north of $1 TRILLION in U.S. Treasuries – debt – that you and I, the tax payers of this country, send interest payments to month after month for them to continue holding our debt. It’s like the mortgage on your house, student loan or car note you have but instead of you getting anything for the debt payment you get to know the warmongers are going to purchase more bombs, weapons of all kinds and create more destruction. China, on the other hand, takes the payment and is building out the Belt and Road Initiative around the world. So, while we are working like slaves to pay our taxes, China is using our labor (taxes) paid to them to build a better global economic and financial system that does not include you and I. Pretty cool, aye?

While this is happening on one side of China’s national ledger sheet, on the other side something completely different is happening.

China reentered the gold market seven months ago, in December 2018 and has added a little less than 74 tons to their official gold holdings of approximately 1,935+ tons of gold. Please keep in mind this does not count the known 80-100 tons per annum that is flowing in from Russia. While this is not a large volume of gold in the grand scheme, this has been going on since 2016 so we are now talking about upwards of 240 – 300 additional tons. This changes their “official” gold holdings from approximately 1,935 tons to somewhere north of 2,175+. It could be as high as 2,235 or more tons of gold.

With more and more central banks continuing to add to their gold hoards did China see the pipeline tightening? China made their exit from the market in October 2016, the same month the yuan / renminbi was added to the IMF basket of currencies accounting for the SDR global trade note. Then fourteen months later decided to jump back in and have been adding to their horde ever since.

Last year, central banks bought 651.5 tons, 74% up on the previous year, the World Gold Council said in January. Official sector purchases could reach 700 tons this year, assuming the China trend continues and Russia at least matches 2018 volumes of about 275 tons, Citigroup Inc. said in April. Buying from central banks in the first five months of this year is 73% higher than a year earlier, with Turkey and Kazakhstan joining China and Russia as the four biggest buyers, according to data released on Monday by the WGC. Source

If 2018 saw national / central banks acquiring more than they have since 1968 and this they are outpacing last year by 73% will this be the biggest year for gold national / central bank acquisitions in history? If not history it would have to be much earlier than 1968 since that record has already been breached.

With the global economic changes that are occurring we have been calling for some type of gold trade settlement for a number of years. We believe that Russia and China are on the cusp on making this change. We have no proof this going to happen this year or next, but all the signs are pointing in that direction. We believe, especially if China continues acquiring more “official” gold on the open market, there will be a gold trade settlement note announced before 2025. Possibly much sooner if the warmongers in Washington DC continue with the war drums over Iran. If President Trump listens to the war-pigs in the Pentagon this will not fare well for the U.S. economy and gold will be much in demand at all levels – from retail to government and everything in between. We pray this does not happen.

via ZeroHedge News https://ift.tt/2LiRgFi Tyler Durden

Are Young American Jews as Left-leaning as the Media Suggests?

If one reads both the secular and Jewish American media, one gets the impression that a virtual revolution is going on among the younger generation of American Jews. Focusing on various leftist and left-leaning Jewish groups, such as JStreet U, IfNotNow, Open Hillel, and Never Again Action, I’ve read dozens of articles suggesting that young Jews are overwhelmingly extremely progressive, hostile to the mainstream Jewish establishment for being too “conservative” (event though that establishment is overwhelmingly liberal on the standard American political spectrum), and in a state of rebellion against what they perceive to be the Jewish establishment’s failure to adequately “resist” Donald Trump and to challenge “the occupation” in Israel.

This narrative makes some intuitive sense. After all, young Americans in general are more left-leaning than older Americans, and there the omnipresent left-leaning young Jewish cohort would logically be much bigger now than it was in more conservative eras. Top that off with the fact that the Reform movement has come to dominate American non-Orthodox Jewish religious life, and that this movement has increasingly blurred the lines between normative Judaism and left-wing politics.

And yet, a recent survey by the Democratic GQR polling firm, commissioned by the Jewish Electorate Institute, tells a different story. Here is the key chart:

Note that millennials and under-30s approve of Donald Trump at higher rates than older Jews. And that’s not all. The chart mysteriously excludes Orthodox Jews from its data on Trump approval by age group, but only from the younger cohorts. Thanks to high Orthodox birth rates, Orthodox outreach efforts, and widespread assimilation among the non-Orthodox, Orthodox Jews are a much larger percentage of the younger Jewish cohort than of older Jewish cohorts. Orthodox Jews are approximately 10% of all American Jews, but 25% of those under 18. 20% seems a reasonable estimate of the percentage of American Jews 18-30 who are Orthodox. And 57% of Orthodox Jews approve of Trump, but let’s round that up to 60% for the younger cohort, since younger Jews in general are more approving of Trump. That means that while only 22% of “greatest generation” Jews approve of Trump, approximately 37% of American Jews under 30 approve of Trump. By contrast, a recent poll showed that only 33% of Americans ages 15-34 approve of Trump.

If true, this would be especially remarkable because young American Jews tend to not be “religious” and live in coastal urban areas, two demographic indicators that strongly predict hostility to Trump.

Of course, the JEI poll needs to be confirmed by other data. And it’s entirely possible that it’s both true that young Jews are more conservative/Republican/supportive of Trump, and that those who aren’t are more leftist than prior generations. But various groups are pushing a narrative that the American Jewish establishment needs to become even more “progressive” if it doesn’t want to lose the attention of young American Jews. In turns out that, if anything, the opposite might be true.

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Is Climate Change Loading Tropical Storm Barry Up With Extra Rain?

Tropical Storm Barry is expected to make landfall in Louisiana later today. The National Hurricane Center (NHC) projects that the slow-moving storm could drop up to 25 inches of rain on Baton Rouge and 15 inches on New Orleans.

For comparison, since 1898 only four downpours in New Orleans have exceeded one-day totals of more than 10 inches. Yearly rainfall totals for New Orleans and Baton Rouge average just a bit over 60 inches in each city.

Consider also that over 16 inches of rain fell on Houston on August 27, 2017. Records going back to 1921 show that Houston had never before experienced such a double-digit daily rainfall total. That was during Hurricane Harvey, which dropped more than 60 inches of rain while it dawdled over the Houston area for several days. That was the greatest amount ever recorded in the continental U.S. from a single storm.

It is now customary for reporting on big weather events to include speculation on how man-made climate change may be affecting them. In its story about Barry’s impending landfall, The New York Times quotes Lawrence Berkeley National Laboratory researcher Christina Patricola: “Regardless of the methodology that you use, we’re starting to see more and more evidence that climate change so far has been enhancing the rainfall on some of these recent hurricane events.”

Patricola is co-author of a 2018 Nature study that applied climate models to observational data to calculate how much warming added to the precipitation in a suite of recent hurricanes. Among other things, that study found evidence that warming boosted rainfall amounts in Gulf Coast hurricanes Katrina, Irma, and Maria by 6 to 9 percent. Another 2018 Nature study found that since 1949 tropical cyclones have slowed down by about 10 percent; it suggested that human-caused climate change might be contributing to the change. Slower hurricanes tend to dump more rain on the areas over which they linger. However, other researchers think the alleged slow-down may be an artifact deriving from changes in the way cyclones have been detected over time.

Interestingly, another 2018 article, this one in the Bulletin of the American Meteorological Associationfound that “since 1900 neither observed [continental United States] landfalling hurricane frequency nor intensity shows significant trends.” Hurricanes hitting the U.S. may be getting wetter and slower, but their winds are not stronger and they are not more frequent. That said, in May the World Meteorological Organization comprehensively reviewed the scientific literature and concluded that “it is likely that greenhouse warming will cause hurricanes in the coming century to be more intense globally and have higher rainfall rates than present-day hurricanes.”

Meanwhile, a 2018 article in Nature Sustainability reports that normalized losses due to hurricanes remain basically flat. The researchers “normalize” the losses by attempting to estimate direct economic losses from a historical storm as if that same event were to occur under contemporary social conditionsThe upshot we’re losing more buildings and infrastructure, but only because there is much more property to be destroyed along the Atlantic and Gulf coasts than there used to be. Once you adjust for that, the proportion of assets damaged by hurricanes even possibly amplified by climate change is not increasing.

Whatever the effect of climate change may have on Barry’s destructive potential, let’s hope that the people in the storm’s path stay safe.

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