Financial Review

The Accord

Sinclair Noe — May 31, 2017

Podcast: Play in new window | Download (Duration: 13:15 — 7.6MB)

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DOW – 20 = 21,008
SPX – 1 = 2411
NAS – 4 = 6198
RUT – 1 = 1370
10 Y – .02 = 2.20%
OIL – 1.03 = 48.63
GOLD + 5.80 = 1269.60
BITCOIN + 3.27% = 2406.36
ETHEREUM – 1.46% = 228.19

President Trump could pull the United States out of the Paris climate accord. Trump refused to endorse the landmark climate change accord at a summit of the G7 Saturday in Italy, saying he needed more time to decide.

The accord, which has been agreed to by 195 countries and ratified by 147 countries since it was signed in December 2015, established a specific set of tools to help countries cut greenhouse gas emissions over time.

Its goal is to hold global warming below 2 degrees Celsius and to avoid the worst risks of a warmer planet. While it’s certainly not the end-all, be-all scheme to reverse global warming, the agreement is the most comprehensive international effort yet to tackle the climate problem, even though compliance is voluntary.

Trump has been dithering on the decision for months, thanks to a tug-of-war playing out among his advisers. He’s already rolled back the policies that would ensure we might make our commitment to Paris, so effectively, he’s stepped out of the accord before officially doing so.

Scientists have been warning us for years that a rise in global average temperature more than 2 degrees Celsius will mean widespread stresses on food and water, sea level rise, and conflict and suffering. To try to avert the worst of these threats, countries agreed to dramatically cut emissions as part of the Paris accord.

But it is essentially a nonbinding agreement and wasn’t ratified by the Senate. So, leaving could be pretty simple, though it will take about four years to formally do it. In the meantime, US officials could stop participating in climate talks. And Trump could pull out of the underlying UN Framework Convention on Climate Change.

That could happen in a just a year’s time and would send the message that the US is done with international cooperation on climate change. A third option is that Trump could declare that the Paris deal is a legal treaty that requires Senate approval.

Such a vote would fail, and then Trump would have Senate backing to not abide by the deal, which he deems a treaty. A letter that 22 Senate Republicans sent to Trump this week urging him to withdraw from the deal, increases the odds of this happening.

Pulling out of the Paris accord could cause serious diplomatic damage. The countries of the world care about climate change. They see it as a profound threat. A decision to withdraw would also fly in the face of nearly across-the-board support for Paris among top American companies, in sectors ranging from oil and gas to retail, chemicals, utilities, agriculture, finance, information, and autos.

The CEOs of ExxonMobil, Apple, Dow Chemical, Unilever and Tesla were among those urging Trump to remain in the agreement, with Tesla’s Elon Musk threatening to quit White House advisory councils of which he is a member if the president pulls out.

Business leaders know climate change is real. They know Paris is an agreement they can work with. They know having US negotiators at the table to protect their interests on matters like intellectual property and trade is crucial.

They know that the transition to clean energy is one of the biggest economic plays of this century, that climate change is a major driver of this transition, that the United States is perfectly positioned to lead with our unmatched culture of innovation, but that opting out of Paris will undermine this opportunity to expand markets, create jobs and build wealth.

In late 2015, Exxon came under fire when New York’s attorney general opened an investigation into whether Exxon misled investors about the effects of climate change. Exxon’s scientists had allegedly been telling company leadership that climate change was an issue as early as the 1970s and ‘80s, but Exxon executives cast doubt on the idea publicly for decades.

Now, Exxon backs the Paris accord. Today, 62.3 percent of investors in Exxon Mobil voted for the company to produce an annual report on the impacts of climate change policies on the company’s business. According to a copy of the resolution, the investors want Exxon to “publish an annual assessment of the long-term portfolio impacts of technological advances and global climate change policies.”

They also instruct the company to annually assess the financial risks of “a scenario in which reduction in demand results from carbon restrictions and related rules or commitments adopted by governments consistent with the globally agreed upon 2-degree target.”

We are far past the point when we should be discussing whether climate change is a live risk. The Pentagon calls it a “threat multiplier” in vulnerable regions of the world. The National Intelligence Council says climate change “will almost certainly have significant effects, both direct and indirect, across social, economic, political, and security realms during the next 20 years.”

Firms like BlackRock, Goldman Sachs, Citigroup, and Shell, among others, have produced serious climate reports focused on the transition needed to meet the goals of Paris.

And just look at the signals from nature, at the dozens of “100-year” events—floods, superstorms, droughts, wildfires, record heat waves—taking place in the United States and around the world in recent years. Weather-related losses have tripled since the 1980s.

In the United States, the already strong efforts of our states and cities will loom even larger. States from California, Washington, and Oregon to Minnesota, Illinois, New York, New England, and many others are dedicated to strong climate action and will examine whether there is still more that they can do. Many more states, both red and blue, are charging ahead in developing wind and solar energy.

The dozen US cities that are part of the global C-40 group on climate change account for 25 percent of US population and 30 percent of US GDP. In Mexico City last December, they promised to deliver action, regardless of what the new Trump administration decided to do.

Business also has a crucial role to play in driving the clean energy transformation. The boom is well under way. Wind and solar accounted for two-thirds of all new electric capacity in the United States in 2016. Costs of wind and solar have dropped over 80 percent in the past eight years for solar PV and over 60 percent for wind.

And hi-tech advances are happening all the time, in battery storage, materials science, electric vehicles, and other key elements of the transition. It would be a mistake for companies to bet on a go-slow, “Trump” phase. The transition to clean energy is the smart bet for businesses and investors need to keep their eyes on the prize and not get distracted by the ideological wars of Washington.

While US withdrawal from the Paris accord might cause some other countries to pull back from their commitments to clean energy, it will likely encourage others to step up efforts to fill the void. China has just announced that electric cars are going to account for essentially all growth of car sales as of now.

China’s “road map” plans to have 20% (7 million) of new annual sales to be electric vehicles by 2025 (that is in 8 years), with 2 million electric car sales by 2020. In an extraordinary move China is seeking 8% of new car sales in China being electric vehicles in 2018 (next year). This is not only an emerging problem for the oil industry, it is also a big problem for foreign car makers without electric cars available in China next year.

Many foreign manufacturers are paying attention to China. The latest news means that if you don’t have electric cars or Chinese electric car making partners, then the Chinese market is going to be challenging. BMW has announced that it is prepared to meet the Chinese Government targets. Daimler projects electric vehicles and hybrids will account for up to 35% of worldwide sales in the next 7 years.

And the story for Indian electric car/Internal combustion engine substitution is similar, if not more dramatic (all vehicles electrified by 2032). The scale of the projected changes is huge: 1 Gigaton of CO2 emissions saved and savings of $60 billion in annual petrol/diesel costs in 2030. India is projected to be the 3rd largest automotive market by 2026.

Oil giant BP’s 2016 future energy report barely mentioned electric cars (less than 1.5% penetration by 2035). In its 2017 Energy Outlook, BP had penetration of BEVs at ~4.5% by 2035. BP has projected that the expansion of future oil demand would be dominated by China and India. Now China is saying that it plans to have electric vehicle penetration at 20% of new sales in 2025. And that might be conservative.

Self-driving electric cars are ten times cheaper to run than fossil-based cars, with an expected lifespan of 1 million miles. The only thing holding them back is battery power. The “tipping point” could arrive over the next two to three years as EV battery ranges surpass 200 miles and electric car prices in the US drop to $30,000.

By 2022 the low-end models will be down to $20,000. After that, the avalanche will sweep all before it. What the cost curve says is that by 2025 all new vehicles will be electric, all new buses, all new cars, all new tractors, all new vans, anything that moves on wheels will be electric, globally.

Revolutions have a way of creeping up on you.

Stocks Continue Rise to New Highs

Charles Schwab: On the Market

Posted: 12/8/2016 4:15 PM ET

Stocks Continue Rise to New Highs

U.S. stocks continued to add to weekly gains as the major domestic indexes joined a global equity advance following a mixed monetary policy decision from the European Central Bank. Treasury yields extended gains, the U.S. dollar and crude oil prices also moved higher and gold declined. On the equity front, financials were stand-out winners, while Lululemon Athletica rallied on an upbeat earnings report.

The Dow Jones Industrial Average (DJIA) advanced 65 points (0.3%) to 19,615, the S&P 500 Index gained 5 points (0.2%) to 2,246 and the Nasdaq Composite added 24 points (0.4%) to 5,417. In moderately-heavy volume, 975 million shares were traded on the NYSE and 2.2 billion shares changed hands on the Nasdaq. WTI crude oil added $1.07 to $50.84 per barrel and wholesale gasoline was $0.01 lower at $1.50 per gallon. Elsewhere, the Bloomberg gold spot price declined $3.02 to $1,170.97 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—increased 0.8% to 101.08.

Lululemon Athletica Inc. (LULU $69) reported 3Q earnings-per-share (EPS) ex-items of $0.47, above the $0.43 FactSet estimate, as revenues rose 13.0% year-over-year (y/y) to $544 million, topping the expected $541 million. 3Q same-store sales grew 7.0% y/y, exceeding the expected gain of 5.2%. The yoga apparel company issued 4Q guidance that was a bit shy of estimates, while offering a stronger-than-expected full-year EPS outlook. Separately, the company announced a $100 million share repurchase plan. Shares surged.

Costco Wholesale Corp. (COST $158) posted fiscal 1Q profits ex-items of $1.17 per share, below the forecasted $1.19, as revenues rose 3.2% y/y to $28.1 billion, versus the projected $28.3 billion. COST achieved a 1.0% y/y increase in 1Q same-store sales, compared to the expected 1.2% gain. Shares finished solidly higher despite the results, as the company noted that traffic seemed to have hit a trough and come back a little, pointing out that "It certainly seems like it's back on the mend."

Dow member Chevron Corp. (CVX $115) announced that its 2017 capital expenditures budget is expected to be $19.8 billion, down at least 15.0% versus 2016. CVX closed higher. For more on the energy sector in the wake of the OPEC production cut last month, see our article, Are Things Finally Looking Up for the Oil Industry?, at www.schwab.com/insights, and follow Schwab on Twitter: @schwabresearch.

H&R Block Inc. (HRB $23) announced a fiscal 2Q loss of $0.67 per share, compared to the expected shortfall of $0.68, with revenues rising 2.3% y/y to $131 million, above the forecasted $127 million. Shares declined amid concerns about the potential impact on demand for the company's tax prep services of President-elect Donald Trump's potential tax reforms.

Jobless claims decline

Weekly initial jobless claims (chart) fell by 10,000 to 258,000 last week, above the Bloomberg forecast calling for a decline to 255,000, as the prior week figure was unrevised at 268,000. The four-week moving average rose by 1,000 to 252,500, while continuing claims fell by 79,000 to 2,005,000, south of the estimated level of 2,048,000.

For our latest look at employment, see Schwab's Chief Investment Strategist Liz Ann Sonders' latest article, Welcome to the Working Week: An Update on Jobs. Liz Ann also offers her latest article, You've Got to Earn It: Valuations Aided by Improving "E," where she points out that economic and earnings momentum has picked up—and not just post-election, with the latter expected to grow by more than 12% in 2017. She concludes that valuations are reasonable considering inflation; but that also represents a risk factor next year. Read both these articles at www.schwab.com/marketinsight and follow Liz Ann on Twitter: @lizannsonders.

Treasuries were lower with the yield on the 2-year note ticking 1 basis point (bp) higher to 1.10%, the yield on the 10-year note gaining 5 bps to 2.39%, and the 30-year bond rate advancing 7 bps to 3.09%.

With bond yields having spiked since the surprise presidential election and amid elevated December rate hike expectations, which have been bolstered by some mostly stronger-than-expected economic data, see Schwab's Chief Fixed Income Strategist, Kathy Jones' latest article, Bond Market Outlook: Higher Rates and Known Unknowns at www.schwab.com/onbonds. Kathy notes the prospect of fiscal stimulus and tax reform under the new administration is driving bond yields higher, and we believe the upward trend is likely to continue into 2017. However, there are many "known unknowns" about policy that could affect the outlook for investors. We suggest investors take a cautious approach to the bond market, focusing on high quality domestic bonds and keeping the average portfolio duration in the short to intermediate term until there is more clarity.

Be sure to check out Kathy's video with Schwab's Vice President of Trading and Derivatives, Randy Frederick titled How Will Expected December Interest Rate Hike Affect Markets in 2017?, at www.schwab.com/insights. Follow Kathy and Randy on Twitter: @kathyjones and @randyafrederick.

Releases for the U.S. economic calendar tomorrow will consist of wholesale inventories, expected to have declined 0.4% m/m during October after rising 0.1% in September, and the preliminary University of Michigan Consumer Sentiment Index for December, projected to move higher to 94.5 from the 93.8 registered for November's final read.

Europe higher in choppy action following ECB decision, Asia joins global market rally

European equities finished higher after a bout of choppiness in the wake of the monetary policy decision from the European Central Bank (ECB), which expectedly decided to leave its benchmark interest rate unchanged and extend its asset purchase program by about nine months. Briefly following the decision, the euro rallied and stocks moved to the downside as the ECB announced that during the nine-month extension, asset purchases will be lowered to a monthly pace of 60 billion euros from the current pace of 80 billion euros.

However, the knee-jerk reaction reversed, with the euro falling and stocks extending a winning streak to four sessions. The ECB noted that if its outlooks for inflation—"a sustained adjustment in the path of inflation consistent with its inflation aim"—and the economy become less favorable it intends to increase the asset purchase program in terms of size and/or duration. Also, the ECB eased the restrictions on the types of assets it can purchase as it will be allowed to buy bonds with a yield below the deposit rate, which was previously a minimum eligibility requirement. The central bank issued updated economic projections, saying it expects the economic expansion to proceed at a moderate but firming pace, leaving its outlook for real GDP growth broadly unchanged from its September forecasts. Basic materials and financials showed strength following the decision, with bond yields in the region moving higher.

Amid the choppiness in the markets and the likelihood of continued global volatility, Schwab's Chief Global Investment Strategist Jeffrey Kleintop, CFA, reminds investors, Three Reasons Why Now is Not the Time to Retreat from Global Diversification and why Your portfolio may be less diversified than you think. Follow Jeff on Twitter: @jeffreykleintop. Italian stocks continued to rebound from the failed Italian referendum over the weekend that exacerbated political uncertainty in the region as it was the first step of several that could pave the way for an Italian exit from the European Union (EU). Schwab's Director of International Research, Michelle Gibley, CFA, discusses the uncertain political front in the region in her latest article, Europe Votes: Could More Countries Reject the EU? Read all these articles at www.schwab.com/oninternational. The British pound finished lower versus the U.S. dollar.

Stocks in Asia finished mostly higher following strong rallies in the U.S. and Europe yesterday, bolstered by speculation ahead of today's European Central Bank decision which yielded an extension of its asset purchase program. Japanese equities gained ground despite some strength in the yen and a disappointing revision to the nation's 3Q GDP growth. Japan's economic output grew at a 1.3% annualized quarter-over-quarter pace, revised down from the preliminary estimate of a 2.2% rate of expansion, and compared to expectations of a 2.3% gain. The negative revision was led by decreases in capital spending and private inventories. Australian securities advanced with weakness in oil & gas issues on yesterday's extension of losses for crude oil prices being more than offset by strength in financials and basic materials stocks.

Stocks in India rallied to rebound from yesterday's decline that followed the Reserve Bank of India's unexpected decision to not cut its benchmark interest rates. South Korean equities jumped to extend a winning streak to three sessions. Stocks in Hong Kong rose as the markets continue to adjust to this week's start of the exchange trading link between Hong Kong and Shenzhen. Chinese markets also digested a relatively favorable November trade report, which showed exports snapped a seven-month losing streak and imports grew much more than expected. Securities trading in Shanghai finished lower. In the wake of the China data, Schwab's Jeffrey Kleintop, CFA, offers his latest article, Happy Unrecession: The Alice in Wonderland economy, noting that while volatility may lie ahead for stocks, a prolonged bear market and recession seem unlikely for 2017. Read more at www.schwab.com/oninternational.

Tomorrow, the international economic docket will yield the BSI All Industry Index from Japan, CPI, PPI and foreign direct investment from China and home loans from Australia. Reports from across the pond are expected to include trade data and labor costs from Germany, industrial and manufacturing production from France and trade data and construction output from the U.K.

 Mission Innovation 

Accelerating the Clean Energy Revolution.

 

Joint Launch Statement

 

November 30, 2015, in Paris, France, issued on behalf of the Governments of Australia, Brazil, Canada, Chile, China, Denmark, France, Germany, India, Indonesia, Italy, Japan, Mexico, Norway, Republic of Korea, Saudi Arabia, Sweden, the United Kingdom of Great Britain and Northern Ireland, the United Arab Emirates, and the United States of America:

Accelerating widespread clean energy innovation is an indispensable part of an effective, long-term global response to our shared climate challenge; necessary to provide affordable and reliable energy for everyone and to promote economic growth; and critical for energy security. While important progress has been made in cost reduction and deployment of clean energy technologies, the pace of innovation and the scale of transformation and dissemination remains significantly short of what is needed.

For these reasons, participating countries have come together to launch Mission Innovation to reinvigorate and accelerate public and private global clean energy innovation with the objective to make clean energy widely affordable.  Additional countries will be encouraged to join in the future.

Double Governmental Investment in Clean Energy Innovation. Each participating country will seek to double its governmental and/or state-directed clean energy research and development investment over five years. New investments would be focused on transformational clean energy technology innovations that can be scalable to varying economic and energy market conditions that exist in participating countries and in the broader world. Research and development projects would be designed and managed to attract private investors willing to advance commercialization. While each participating country’s clean energy innovation portfolio is unique and reflects national priorities, all participating countries share the common goal to accelerate the pace of the clean energy revolution now underway in an appropriate way.  This endeavor should help facilitate affordable access to critical technologies.

Private Sector and Business Leadership. Business needs to play a vital role in the commercialization and cost-effectiveness of clean energy breakthroughs, and participating countries commit to work closely with the private sector as it increases its investment in the earlier-stage clean energy companies that emerge from government research and development programs. Participating countries especially commend the contribution being made by a group of investors through the Breakthrough Energy Coalition. These investors from 10 countries and representing leadership from many key economic sectors are prepared to drive innovation from the laboratory to the market through the investment of patient capital at unprecedented levels into early-stage technology development into participating countries. This commitment, as stated in the Coalition’s principles, will be focused on investment opportunities sourced from the countries participating in Mission Innovation.  Participating countries also look forward to working with additional private sector partners who are willing to share our common goal of increasing investment for clean energy innovation.

Implementation.  Participating countries will implement Mission Innovation in a transparent, effective, and efficient manner.  Strong linkages with our investor partners and other key stakeholders are essential.  Working with existing international institutions, participating countries will cooperate and collaborate to help governments, private investors, and technology innovators to make available data, technology expertise, and analysis in order to promote commercialization and dissemination of clean energy technologies so they reach global market penetration.  Participating countries will build and improve technology innovation roadmaps and other tools to help in our innovation efforts, to understand where research and development is already happening, and to identify gaps and opportunities for new kinds of innovation.  Participating countries may also pursue joint research efforts through public-private partnerships as well as joint research among participating countries.  We will also seek to enhance global clean energy innovation capacity, including through ongoing bilateral engagement with participating countries.  The first implementation meeting for Mission Innovation will be held in early 2016.

Information Sharing.  Each participating country commits to provide, on an annual basis, transparent, easily-accessible information on its respective clean energy research and development efforts to promote transparency, engage stakeholders broadly, spur identification of collaborative opportunities, and provide the private sector more actionable information to improve its ability to make investment decisions.

FINANCIAL REVIEW

Strange Days in Energy

Sinclair Noe — February 3, 2015

Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)

DOW + 305 = 17,666
SPX + 29 = 2050
NAS + 51 = 4727
10 YR YLD + .10 = 1.78%
OIL + 2.52 = 52.09
GOLD – 13.70 = 1261.10
SILV + .09 = 17.37

One year ago, the Dow Industrials dropped down to 15,356, which proved to be the low for 2014. Since then, up 16%, mas o menos.

Corelogic reports home prices slipped 0.1% in December, to take the year-on-year rate to 5%. Twenty-seven states and the District of Columbia are at or within 10% of their peak; current prices in Arizona are still 29.5% below the peak. Colorado (8.4%), Texas (7.8%) and New York (7.6%) saw the fastest growth, while only three states — Maryland (-0.7%), Vermont (-0.9%) and Connecticut (-2.2%) — saw a decline on a year-on-year basis.

New orders for factory-made goods in the U.S. sank 3.4% in December to mark the fifth straight decline. The latest drop suggests that manufacturers may have scaled back production owing to a stronger dollar and weak economic growth overseas that’s made it harder to sell American-made goods. Inventories also declined for the first time in 19 months, down 0.3%. Excluding transportation, new factory orders fell a smaller 2.3%.

Earnings reporting season:
Chipotle Mexican Grill said its fourth-quarter earnings rose 52% as sales benefited from stronger customer traffic, higher menu prices and new stores. It’s tough to keep growing that fast. Chipotle also reiterated its October warning that sales growth may slow during 2015 from the robust gains reported in recent periods. Shares were down in after-hours trade.

United Parcel Service will start applying surcharges for residential packages this year after its costs soared during the recent disappointing holiday season. UPS also reported that fourth-quarter profit fell from a year ago but forecast earnings within the range of estimates.

Walt Disney reported stronger-than-expected earnings and revenue for its December quarter as growth at its media networks and parks and resorts divisions offset a slight drop in revenue from studio entertainment. The bright spot was the animated film “Frozen” which has been a huge hit in merchandise sales. Disney’s record results in recent periods have been spurred by price increases at its domestic theme parks; measles tossed in at no extra charge.

St. Louis Fed Bank President James Bullard, speaking at a conference in Delaware, called for the breakup of big banks. Bullard said the time for restoring the Glass-Steagall Act, which had separated investment banks and commercial banks, had probably passed and was not the best route going forward. But he did advocate for smaller financial institutions, saying the argument that large corporations need large banks was weak.

Minneapolis Fed Bank President Narayana Kocherlakota says the Fed should not hike rates this year because it would slow the return of inflation to the central bank’s target and also risk a loss of credibility for the US central bank. Kocherlakota said he thinks it will already take inflation a few years to return to the Fed’s 2% annual target rate from current low level.

The Reserve Bank of Australia has jumped on the easing bandwagon, becoming the latest global central bank to cut interest rates in response to slowing inflation and concerns over economic growth. The RBA lowered its benchmark rate by 25 bps – its first change since August 2013 – to a new record low of 2.25%.

European stocks moved higher today. Greece’s new finance minister Yanis Varoufakis has suggested that instead of requesting a write-off of its €315 billion ($357 billion) foreign debt, the government would ask to swap Greek debt for two new types of bonds linked to growth while also targeting oligarchs, cartels, and wealthy tax evaders; proving there’s more than one way to make a financial transfer. The Athens Stock Exchange Index jumped up 11% today. Yes, this is the same Greek finance minister that was quoted over the weekend saying “Greece won’t negotiate with the Troika.” Which is an excellent opening position for negotiation when you think about it.

Greece’s debts are held by other democratically-elected countries. The majority view in those countries is against debt forgiveness. On the other end of the spectrum is Greece actually not negotiating and defaulting on debt, and then dropping out of the European Union; actually they say they don’t want to exit the EU, so they would have to be kicked out; something the EU does not have to political authority or unanimous support to do; but even if everybody acted in a most stupid and malignant manner, the bond vigilantes would start circling like sharks smelling blood, and the losses would mount quickly. Against that backdrop, rescue loans for debt indexed to nominal economic growth sounds quite pleasant indeed.

Auto makers say their U.S. sales grew in January, typically a slower month for the industry. Chrysler, General Motors and Nissan all posted double-digit increases in January. GM reports auto sales were up 15% compared with January a year ago. Ford up 15%, Fiat Chrysler up 14%. Nissan up 15%. Toyota up 16%.

Automotive information provider Kelley Blue Book said transaction prices of new light vehicles are up 5% compared with a year ago to $33,993. TrueCar estimates average incentive spending, including rebates and discounts, was $2,642 during the month. That is a decline of 10% compared with December’s numbers, but up 3.6% over January 2014. Gas prices, sitting at about $2 gallon, are helping juice demand for trucks and SUVs that consume more fuel but also deliver higher margins. Some buyers are using savings from lower fuel costs to purchase pricier options or come into the market sooner than otherwise planned. The thinking is that low fuel prices provide a significant boost to consumer disposable income.

Oil is in a bull market. It took all of three days trading. It started Friday, when oil jumped 8%, and yesterday and another 5% today; from an intraday low of $43.58 last Thursday to an intraday high of $54.24 today; boom 20%-plus move; technically we are in a bull market. Of course oil prices are still down 50% from the highs of last June. If you think this has anything to do with fundamentals such as supply and demand, I would love to hear that justification. Over the past several weeks, more than 20K oil workers have lost their jobs as companies pare their workforces to deal with the drop in oil prices. More than 700 oil industry jobs are now being terminated in Texas, following recent layoff announcements. It should take months before that actually affects supply. The supply/demand equation did not change that much in 3 days. What did change? Traders decided they could pop the price and squeeze the shorts.

Meanwhile, you have probably noticed that prices for electricity never went down at all. According to the US Energy Information Administration, since 2004, average residential electricity prices have jumped 39%, to 12.5 cents a kilowatt-hour and prices for all users have jumped 36% to 10.42 cents. Meanwhile, Americans are using less electricity; we’re using efficient light bulbs and Energy Star appliances, and even a little solar on the roof. The result is that sales are down. All at a time when the electric grid is in need of upgrades. The Edison Electric Institute calls this a “death spiral” for utilities. As a result, many utilities are now considering charging fixed monthly fees for electricity services to cover the fixed cost, rather than the cost of the electricity itself.

Utilities like fixed fees, consumers not so much; fees punish energy-conservers and lengthen pay-back periods for solar power and energy-efficiency upgrades.

Meanwhile, a funny thing happened in India last week. President Obama visited and there was much pageantry and talk of expanded bilateral cooperation, and there was a $4 billion nuclear deal announced; the details of the deal are what make it interesting. It contrives a model to shift to Indian taxpayers the liability risks for nuclear accidents, thus undermining India’s domestic law, the Civil Liability for Nuclear Damage Act, which pins the liability on suppliers of nuclear-power plants and equipment. It will circumvent the central principle enshrined in that law — the right of recourse against nuclear suppliers, including manufacturers and designers.

The paradox is that America’s domestic law allows suppliers to be held liable, yet Washington has sought to shield its exporting firms by insisting that India accept operator’s strict liability and restrict potential claims. Great news for the nuclear suppliers; they face no downside risks and can concentrate on profits. For them, supplier liability ends with delivery of the plant or equipment.

In order to jumpstart its civilian nuclear power industry, India is agreeing to an insurance pool of $245 million to cover any liabilities. If a serious accident were to occur, India would be saddled with staggering, lasting costs. Japan’s Fukushima-disaster bill has been conservatively estimated at $105 billion, or 429 times higher than the Indian insurance pool’s capital.

So, what we have is an energy policy that is subject to 20% price swings in less than a week; clearly a market being manhandled by speculators; infrastructure that is crumbling and unable to pay for itself, and a source of electricity that can’t be used unless we are willing to dump liability on taxpayers. I’m just saying this might be cause for concern, at some point.

We’re giving more. The U.S. economic rebound last year pushed the stock market up and the jobless rate lower, helping to boost charitable giving in the country to a record $456 billion—a jump of more than 9 percent from the year before. The number of nonprofits has grown 50 percent since 2002, and many of them have turned to more sophisticated fundraising technologies like online giving and crowdfunding. The bulk of the contributions were small gifts from individuals; mega-gifts of $100 million or more accounted for just 1% of the total.