April 2016 – Page 32

Coal Pollution Likely Kills More People Annually Than Will Ever Die from Chernobyl Radiation

ChernobylReactor4 The meltdown and explosion of reactor number 4 at the Chernobyl nuclear power plant site in Ukraine 30 years ago was the worst nuclear accident in history. The reactor explosion and high radiation exposure killed 30 employees a few weeks after the explosion. The crippled plant spewed radioactive particiels across swathes of Europe for days afterwards. An increased risk of cancer is one of the chief concerns about exposure to nuclear radiation.

Greenpeace asserted in 2006 that Chernobyl’s death toll largely from cancer would exceed 200,000. In 2010, a book by Russian researchers estimated the toll as 1 million people. In contrast, the World Health Organization (WHO) had concluded in 2005 that as many as 4,000 people might die of exposure to radiation from the Chernobyl accident.

In its 2008 review, the United Nations Scientific Committee on the Effects of Atomic Radiation (UNSCEAR) noted that emergency and recovery workers and some children exposed to radiation were at higher risk. However, the vast majority of exposed people experienced radiation levels for a short time that were comparable to a few times higher than background radiation. The UNSCEAR review concluded, “Lives have been seriously disrupted by the Chernobyl accident, but from the radiological point of view, generally positive prospects for the future health of most individuals should prevail.”

A 2015 recent analysis by Israeli researcher Yehoshua Socol in the journal Dose-Reponse reconsiders the health consequences of the the Chernobyl accident. Socol argues that using even the most conservative linear no-threshold hypothesis to calculate cancer risk cannot distinguish any increase above normal background rates of cancer incidence and mortality. Assume 50,000 cancer deaths would result from Chernobyl’s radiation. Socol notes, assuming current mortality rates, that over the next 50 years some 50 million people (plus or minus 2.5 million) will die of cancer in developed countries. Given the annual uncertainty of 50,000 deaths per year, it would be impossible to detect what number, if any, of those deaths can be attributed to exposures to Chernobyl.

Socol concludes that “unlike the widespread myths and misperceptions, there is little scientific evidence for carcinogenic, mutagenic or other detrimental health effects caused by the radiation in the Chernobyl-affected area, besides the acute effects and small number of thyroid cancers. On the other hand, it should be stressed that the above-mentioned myths and misperceptions about the threat of radiation caused, by themselves, enormous human suffering.”

A fascinating December, 2015 study by European researchers in the Journal of Geophysical Research-Atmospheres asked what would the health consequences to Europe if the continent had closed all of its nuclear power plants and switched to coal-fired generation between 2005 and 2009? They calculated that there would have been an increase of around 100,000 premature deaths annually owing to increased air pollution (most of them due to cardiopulmonary illnesses). If these calculations are correct, the number of deaths attributable to coal would have been three times higher than even the worst-case Chernobyl cancer scenario being pushed by activists. If the WHO’s estimates are right, coal kills at more than 1,000 times the rate of Chernobyl radiation.

Chernobyl was bad enough, but exaggerating its effects to further an unscientific campaign against nuclear power is ethically sleazy and may have the unintended consequence of killing more people than the activists claim they want to save.

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Mom Lets Her 3 Kids Wait in Car. FBI Agent Tells Her She Can’t.

Cars My friend Julie Gunlock lives just outside of Washington, D.C. She’s a great mom and the author of a book I love, From Cupcakes to Chemicals: How the Culture of Alarmism Makes Us Afraid of Everything and How to Fight Back.

She recently found herself fighting back a particularly stubborn misconception. She’d let her kids, ages nine, seven, and five, wait in the car for 15 minutes while she ran into the store to get dinner. She emerged to find an FBI agent flashing his badge and insisting, “m’am, you can’t do that” because “kids get snatched all the time.”

Julie knew that was untrue. She told him to put away his badge and go find a real crook. Here’s her feisty article. And here’s her note to me:

Dear Lenore: I thought you’d want to see this article I wrote for Heat Street. As you know, this incident rattled me and I am so thankful that I could contact you (actually, I emailed you before even calling my husband!) for comfort, support and accurate information about my rights and the laws currently on the books.

I’m so grateful to you for creating a website where moms can go for solid information and for creating the Free-Range Kids movement. Without it, I would be feeling quite guilty, and probably questioning my own instincts as a mom. It’s nice to know I’m not alone and that there’s a movement to push back on the sort of harassment I experienced. Equally gratifying is seeing my children’s pride in me. They’re thrilled that mom stood up for her rights and didn’t back down when the man tried to throw around his authority. That’s a valuable lesson for them to see and it’s because I knew my rights that I was able to stand up for myself.

Thanks again! — Julie Gunlock

Some people wonder why the topic of kids waiting in the car comes up so often in my writing. After all, it’s not like the kids are out playing or delivering newspapers—classic Free-Range activities.

The reason is that the “car wait = death” hysteria is emblematic of our culture’s belief that kids can never be unsupervised, even when all the evidence shows that this activity is extremely safe. It’s not perfectly safe: perfect safety is an impossible goal. But sitting in the car is safer than being driven in one (the number one way kids die) or being dragged across the parking lot, even though that is what the authorities encourage parents to do.

When both driving and dragging are demonstrably more dangerous than a short, unsupervised car wait, and yet are not subject to societal disapproval (including arrest), it’s clear we are dealing with superstition, rather than rationality.

It’s hard to fight a deeply held superstition. But if we want to be able to raise our kids the way we see fit, and especially if we want to give them any Free-Range freedoms, we must fight for the right to parent outside the prevailing Cult of Constant Supervision. This cult keeps manifesting itself in shopping center parking lots, which is why I keep writing about it.

Update: Due to an error, this post initially ran under the wrong byline. Lenore Skenazy is the author of this post.

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Sorry Credit Suisse, The Short Covering Isn’t Over… But You May Be Right About The New “Pain Trade”

In Credit Suisse’s Top 10 market notes from this morning, we found an interesting comments, one which according to the author could mean some semblance of normalcy was returning to the market.

This is what CS said:

No signs of short covering in Energy/Materials yet the spaces outperform — this is a change –Pain trade now down?

Notable that Goldman most short rolling basket (GSCBMSAL) underperforms -0.13%, and our short baskets showing very little signs of covering in energy and materials… This is a change from recent days/weeks where days that energy/crude/materials act well we would see massive signs of covering in these baskets

Pain trade down in Energy? LOs are increasingly becoming more constructive/bullish on the commodity (Oil) from here (and thus the stocks) and our Prime Services data is showing that E&P net is increasing noticeably MTD. So net, net to me short covering is well underway and most getting longer. What folks are NOT considering (fully) is Saudi Arabia and MBS hinting at boosting production higher from here (20mb/d by 2020) or that they are uncharacteristically selling their crude on spot now (headlines out yesterday) and they are possibly beginning a new price war, which could elongate the this down-cycle. Oil going lower from here would ruin the party and thus be the pain trade….not many folks I talk to or have talked to are acknowledging that risk; at least openly.

To this we can only point out that the above is only half right: while CS was correct that the short covering indeed had been muted early on, it has since sprang as, for whatever reason, the shorts got their squeeze tap on the shoulder once again.

As for the second point, we did cover the all too realistic possibility that Saudi Arabia was about to boost its production yesterday in the latest price war with Russia for dominance of the Chinese market, one which has spilled over into the spot market.

But while that had a short-term impact on the price of oil pushing it to a fresh 4 day low, today’s price action continues in an upward direction, driven perhaps mostly by the weak dollar as algos trade on their favorite correlation.

For now this means that oil has reverted to its oil inverse proxy, the dollar which is sharply lower today. However, all that may change in just 24 hours when the Fed reveals its latest statement. If the “risks are balanced” language returns, then and only then will Credit Suisse be right, as it will ignite the Dollar’s next leg higher as suddenly June rate hike odds are repriced and in the process send oil lower, and force all the recently onboarded “weak hands”, this time on the long side, to unwind their positions.

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Who Is The Ravenous Buyer Of All Those Energy Stocks? Here Is The Surprising Answer

While one can blame algos and “macros” for snapping up oil the commodity, as Morgan Stanley did recently, another question is who is the relentless buyer of energy stocks to a level that makes little sense from a forward P/E multiple.

The answer may have been revealed earlier today in Bank of America’s breakdown of what smart money investors were doing. While we already reported that for the 13th, record, consecutive week, hedge funds, institutions and private clients were unloading risk exposure, one other group of client were buying energy stocks in record amounts: Pensions.

This is what BofA said:

Pension fund clients—a sub-set of institutional—were net buyers of US stocks for the second week, led by record purchases of Energy stocks by this group. They were also big buyers of Industrials and Tech. Unlike the other groups, pension fund clients are net buyers YTD.

In other words, as virtually all other institutions are exiting the market at a record pace that has surprised even Bank of America, one specific subset of “clients” is buying energy stocks with reckless abandon at multiples that only make sense if oil was back at $80: the same group who is tasked with the fiduciary duty of protecting your pensions, dear retired readers.

Which provides a convenient scapegoat for why pensions are set to be wiped out even faster than has been the recent case: blame it all on oil.

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Treasury Sells $34 Billion In 5 Year Paper In Another Mediocre, Tailing Auction

Yesterday’s 2 Year auction was surprisingly poor because, among other things, it was the first tailing auction since 2014. Moments ago the US Treasury sold $34 billion in another lackluster auction which saw the high yield print at 1.41%, tailing 0.2 bps through the When Issued.

The Bid to Cover was 2.41, modestly better than last month’s 2.38, if in line with the 6 month average.

The internals were modestly better, with Indirects taking down 63.4%, 10 bps higher than a month ago, while Directs took down 6.8%, leaving 29.8% for the Dealers, a rather conventional distribution.

To be sure, the weakness was not unexpected: not only was the OTR not trading special in repo this morning suggesting little short overhang, but with the Fed announcement in just two days, we doubt many were eager to put down capital in an auction that may see substantial whipsawing in just over 48 hours.

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Settlements in Tamir Rice, Zachary Hammond Cases Illustrate Elusiveness of Police Accountability

The family of Tamir Rice will receive $6 million from the city of Cleveland in a settlement arrived at this week over the death of the 12-year-old Rice, who was shot and killed by Officer Timothy Loehmann in a city park moments after the officer exited his vehicle.

Meanwhile, the family of Zachary Hammond will receive $2.15 million from the city of Greeneville, S.C., for the death of the 18-year-old Hammond, who was shot and killed during a drug sting over a small amount of marijuana. The settlement was approved by a state judge last week.

In both cases the police departments admit no fault in the deaths of the unarmed victims. Loehmann and another officer also failed to offer Rice any medical aid after shooting him. The most recent settlement, in 2015, between the Department of Justice (DOJ) and Cleveland police (there have been two in the last four years) requires cops, among other things, to offer medical care to their victims. Seven months after agreeing to those reforms, the city sent a claim demanding $500 for emergency medical services from the Rice family.

“There is no price that you can put on the life, on the loss, of a 12-year-old child,” Cleveland Mayor Frank Jackson. He had previously apologized for the wording of a city filing in the Tamir Rice lawsuit that claimed the 12-year-old boy was at fault for his own death (he had a toy gun on him in the park where he was shot—a 911 called identified the toy gun as such) and that sought immunity for the city. He also apologized for the medical bill, saying it was supposed to have been sent to the insurance company.

While such settlements can help move toward closure, they make it easier for local governments to evade responsibility. Cities that arrive at no-fault settlements will often insist, if their officials make public statements at all, that they settled to avoid the uncertainty of a trial.

In Cleveland, the police union responded by suggesting Rice’s family use a part of the settlement money “help educate the youth of Cleveland in the dangers associated with the mishandling of both real and facsimile firearms.” Union officials in cities like Cleveland can be so brazen because they know their political power is secure. Whether in one-party cities or two-party cities, challenging police unions, which protect bad cops like Loehmann, is rare in politics. If the union in Cleveland were interested in protecting its cops, it should demand something like a police offenders registry to prevent proverbial “bad apples” from joining.

In Greeneville, meanwhile, the police say they will be “reinforcing training” on alternatives to the use of deadly force and the state law enforcement agency is asking for more money for more training on deadly force, citing the Hammond case.

While Loehmann, who had a history of being unqualified to be a police officer, resigned before the department took any action, Mark Tiller, who shot and killed Hammond, is still on the force. Both officers avoided any criminal charges. A grand jury declined to indict Loehmann while the prosecutor in Greeneville declined to bring charges against Tiller, saying a video showing Tiller shooting at Hammond’s vehicle while he was trying to flee offered no evidence Tiller broke any laws while killing Hammond. The prosecutor responsible for the Tamir Rice grand jury was voted out of office in the Democratic primaries last month.

Effective police accountability, and actual reductions in police violence, will require relief somewhere between convictions in criminal courts and administrative slaps-on-the-wrist. That requires police departments and local governments have the will, and more importantly, the authority to terminate officers who use deadly force in controversial situations without having to meet the standard of criminal conviction.

It’s harder in the U.S. to fire a police officer who kills a child, or any unarmed victim, than it is to expel a student accused of assault from college. If the DOJ exerted half the pressure on local police departments, government agencies often directly or indirectly supported by federal funds, that it does on institutions of higher education, it could lead to substantive reforms. But that would require addressing the strength of police unions in creating an environment hostile to accountability, something neither major party has so far been willing to do, even as one has targeted other unions, private and public, while the other pays lip service to the problem of police violence.

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Could Trump Beat Clinton in New York? Yes.

One thing Clinton supporters remain in complete denial about (other than the fact most Americans who don’t identify as Democrats find her to be somewhere in between untrustworthy and criminal), is that a significant number of Sanders supporters will never vote for Hillary. Forget the fact that I know a few personally, I’ve noticed several interviews with voters who proclaim Sanders to be their first choice but Trump their second. Are they just saying this or do they mean it? I think a lot of them mean it.

– From the post: Why Hillary Clinton Cannot Beat Donald Trump

I continue to see Hillary Clinton as one of the most overrated political figures in American history, and Donald Trump as one of the most underrated. This is why I think “the experts” are wrong about the outcome of a potential Clinton vs. Trump showdown in the general election.

Hillary’s weaknesses are obvious. I’ve highlighted new shameless transgressions or scandals on these pages virtually every day for several months now. Furthermore, the fact that the grassroots campaign juggernaut known as the Sanders movement seemingly came out of nowhere, proves there’s a huge ideological vacuum on left just asking to be filled in light of Clinton’s neoconservative candidacy.

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Venezuela Starts Power Rationing, Oil Production Likely To Fall

Submitted by Charles Kennedy via OilPrice.com,

Venezuela – home to the largest oil reserves in the world – will for the next 40 days experience a four-hour blackout every single day, and there are fears that the rationing could lead to unrest and trigger a decline in oil output at a time when the country is barely hanging on.

The decision to ration electricity was brought about by a severe drought that has rendered the level of the Guri dam – the country’s major source of power generation – so low that if the weather doesn’t change, the authorities will have to shut it down.

The blackouts will affect households and industrial users alike–and it’s very likely that oil production will drop. This drop, however, will not be too significant, especially in the current state of oversupply.

The Financial Times last week quoted analysts as estimating that irregular power outages could lead to a daily decline in oil output of between 100,000 and 200,000 barrels. That’s a little less than 10 percent of the average daily output in the country for last year, according to OPEC data.

Besides the power outages and the 40-day power rationing, the Venezuelan oil industry has been hit extremely hard by the recession that Venezuela has plunged into because of the oil prices crash. No cash for investments and infrastructure deterioration are the main problems of the industry and they are unlikely to get a solution anytime soon.

Venezuela’s economy is entirely dependent on oil revenues, which is why the country was so insistent on agreeing to a production freeze with other OPEC members. Unfortunately for the South American nation, no freeze was agreed upon, so it has been left to take care of its problems on its own.

To top it all off, crude oil benchmarks started the week with losses, after a three-week rally that was largely the result of bullish hedge fund activity, speculation, and forex movements, according to Morgan Stanley. These factors can’t help Venezuela. What it needs is a fast and sustainable improvement in oil’s fundamentals that would prop up prices. Such a development, however, is nowhere on the horizon.

The International Monetary Fund (IMF) has warned that this year, inflation could jump to a staggering 481 percent, up from 122 percent last year. The economy is expected to contract by 8 percent. Whatever action the government takes, it seems ineffective. Limiting access to foreign currency, food and essential item shortages, as well as price controls have been all deemed as failures by observers.

The effectiveness of power rationing is also questionable. One Venezuelan sector analyst told Bloomberg that rationing will make matters even worse, deepening the chaos; though many parts of the country aren’t likely to notice because they’ve been suffering from day-long power outages already.

So, this is where the world’s top oil reserve holder is: three-figure inflation, the worst recession in the world and no light in sight for oil, the commodity that Venezuela depends on for its survival.

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China Commodity Bubble Bursts As Exchanges Curb Goldman’s “Biggest Concern”

During the last week we have highlighted the frightening similarity between the speculative spike in China commodity trading (which has sent industrial metals prices soaring in yet another 'error' signal for real supply and demand) and the pump-n-dump in Chinese stocks. Specifically, as Goldman warns the factor that "concerns us the most is the increased speculation in the Chinese iron ore futures market," and now, as Bloomberg reports, it appears that bubble is bursting as Steel and Iron Ore prices tumble most in 21 months after Chinese exchanges raise margins in an attempt to curb speculation.

This is what the commodity insanity looked like!!

Bloomberg notes that:

Goldman Sachs has expressed its concern about the surge in speculative trading in iron ore futures in China, saying that daily volumes are now so large that they sometimes exceed annual imports.

The increase in futures trading in the world’s largest importer was among factors that have lifted prices, according to a report from analysts Matthew Ross and Jie Ma received on Tuesday. Iron ore volumes traded on the Dalian Commodity Exchange are up more than 400 percent from a year ago, they said.

“While increased fixed-asset investment in China, a bring-forward of steel production (ahead of a government curtailment) and mining disruptions help to explain the strong rally in the iron ore price, the one driver that concerns us the most is the increased speculation in the Chinese iron ore futures market,” they wrote.

As we said ast week, eventually, the excesses will need to be curbed and maybe that starts a new phase of risk-off within China: As one local trader put it:

“The market is moving so quickly, yesterday felt just like the stock market in June last year before the crash… I think how it goes up, that’s how it will come down."

“There have been two days in the past month where futures volumes have been greater than the total amount of iron ore that China actually imported for the whole of 2015 (950 million tons),” the Goldman analysts wrote.

And so, as Bloomberg adds,

To slow trading activity, the Dalian exchange has announced it would be increasing margin requirements and transaction costs on iron ore futures, they said.

nd that has sent commodity prices tumbling…

The most-active Iron ore futures contract dropped as much as 4.4 percent on Tuesday after the exchange doubled trading fees.

The benchmark spot price for ore with 62 percent content delivered to Qingdao fell 5 percent to $62.78 a dry ton on Tuesday, up 44 percent this year, according to Metal Bulletin Ltd.

Other raw materials in China were also in retreat on Tuesday. Coking coal futures, which trade in Dalian, reversed early gains to lose as much as 5 percent to 777.5 yuan ($120) a ton.

As Goldman concluded:"the commodity rally is not sustainable" and along with it the Baltic Dry's misplaced confidence signals.

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Iconic Hedge Fund Brevan Howard Slammed With $1.4 Billion In Redemption Requests

It had already been a very bad several years for hedge funds with 2016 starting off especially brutally, as Goldman’s own Hedge Fund VIP basket demonstrates…

… when moments ago we learned that it is about to get even worse for one of the most iconic names in the macro hedge fund space, Brevan Howard, which according to Bloomberg has been served with $1.4 billion in cash redemption requests.

Brevan Howard co-founder Alan Howard

As Bloomberg writes, investors in Brevan Howard Asset Management have asked to pull about $1.4 billion from the firm’s main hedge fund after successive annual declines followed by losses during the first quarter, according to two people with knowledge of the matter.

The Brevan Howard Master Fund, which bets on macroeconomic trends to invest across asset classes, will have to meet the redemption requests by the end of June, said the people who asked not to be identified because the information is private. The fund managed $17.6 billion at the end of March, down from about $27 billion two years ago, according to a company website.

While the firm’s billionaire co-founder Alan Howard has previously said that there will be “exceptional opportunities” to make money this year, those have so far failed to materialize. What is odd is that Brevan’s losses are once again not even that material: the Master Fund closed the first quarter down 0.97 percent after losing 2 percent in March. It dropped almost 2 percent in 2015 and 0.8 percent in 2014, people familiar with the matter said earlier this month.

This, however, appears sufficient for many LPs to send in their redemption papers.

Investors disappointed by hedge funds’ performance during recent market turmoil pulled the most money last quarter since the tail-end of the financial crisis, according to Hedge Fund Research Inc. Money managers betting on macro economic trends suffered $7.3 billion in outflows.

The recent trend of pulling funds away from hedge funds is not new: recently New York City’s pension for civil employees, whose money managers included Brevan Howard, voted this month to pull $1.5 billion from hedge funds. Clients of Tudor Investment Corp. have asked to withdraw more than $1 billion from the firm founded by billionaire Paul Tudor Jones after three years of lackluster returns, while Och-Ziff Capital Management Group LLC saw its assets fall by about $1 billion in March to $42 billion on April 1, according to a company filing.

As central banks continue to take over capital markets and make fundamental-based investing impossible, we expect even more hedge fund casualties who collect 2 and 20 in a worldin which activist central bankers have become the Chief Risk Officers of broader markets, and better yet, they do it for “free.”

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