Chatter suddenly rising of inflation risk maps almost perfectly to this same juncture during the great recession. After the Fed showed it could put a floor under asset prices, the trumpets sounded. But, it didn't happen then, and isn't going to happen this time either. $SPY $TLT
The apex of inflation chatter will likely hit next year, when Green New Deal policies edge closer to reality. But it will just be Lucy and the Football all over again, because $GND (at least in energy-infrastructure terms) is ultimately deflationary, wringing out costs, waste.
Imagine looking back on us from the year 2120, and realizing "those people" seriously believed that investing in cheaper, faster, better, lower-cost infrastructure was both a bad investment, and...wait for it...inflationary. Can't make it up.
The observation here is of course quite correct, and part of a larger 40 year program of self-harm, in which the US has failed to invest in itself like other normal nations across the OECD. Let's stop the self-harm, and invest in ourselves.
The US has had shitty GDP, ultra-low fertility rates, and crap wage growth for 20 years. And a big factor in those trends is the massive underinvestment in the critical platforms for growth: water, transit, modern city planning. It's almost like we need a Marshall Plan.
This Spring I returned from a short trip to London--a place where I lived in the 1990's, that I criticised, that I snickered at. All has changed. Now it's London that is modern. Mega modern. Returning to the US is like going back in time by 30 years. It's the dumbest thing ever.
London is now an amusement park of smartly targeted public investment, a kaleidoscope of gorgeous rejuvenations, uncoverings. I could write a 5000 word love letter to this genius London Bridge station project that revived a district, fits into the Shard.
architecture.com/awards-and-com…
Boston, DC transit systems need to be rebuilt. Intermodal investments are needed in many places East of the Mississippi. Whole train network needs to be modernized. You could literally just print the money, and you'd get a + return on investment, all paid back with GDP growth.

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More from @GregorMacdonald

1 Jan
Over the holidays I rode around Portland on a borrowed e-bike while writing up this story for the Atlantic's @RouteFifty. One conclusion: the impact on the short-trip end of the transport spectrum could, in these early days, be comparable to EV. routefifty.com/infrastructure…
2/ If you've not yet ridden an e-bike the effects are simple enough to describe: imagine a quiet motor kicking in every time your cadence slows. You are still very much riding a bike, still pedaling. Over at @iamspecialized they say "it's you, only faster" and that sums it up.
3/Sales of e-bikes, by one estimate are on pace to rise 50% in the US this year, coming from a low base. In Europe, however, there is a more startling metric: 2018 e-bike sales were 10X EV sales. I mean, that is a full-on viking raid into the short-trips typically taken by cars.
Read 10 tweets
10 Dec 19
1/Recent lows in oil and gas equities have predictably triggered the usual flurry of articles about value or mean-reverting investors sniffing around for bargains. But I see no reason to conclude Oil & Gas is anything other now than a long-term value trap.
2/ Other than the usual price oscillations I'm not sure what Oil and Gas investors are looking for now. Another oil cycle? It's obvious the last oil cycle is well behind us now. The leading edge proxy, $OIH, never sustainably recovered after the last big oil decline. Dead sector.
3/ As 2019 comes to a close, once again we see the main forecasting agencies like EIA and IEA having spent much of the year downward revising their demand forecasts. That's getting old, frankly. IEA's STEO today also revised down 2017 + 2018 demand levels--not hugely. But, still.
Read 13 tweets
30 Jun 19
1/ China is on pace to sell 4 million fewer ICE cars this year, as a cyclical auto sector slowdown merges into real problems w/ China's economy. A thread of fresh data on oil, transport, renewables, as a mid-year update to my Oil Fall series. gum.co/OilFall
2/ Hesitate to use the crash word but China's auto market is on pace to fall by 12-13% this year. 3.5 million fewer cars in total, but 4 million fewer ICE, as EV set to reach 1.8 million new sales. This is both a cause, and concurrent to broader macro impacts on road fuel demand.
3/ The aggressive policy attack on ICE, and the surge of EV sales, are creating a perfect storm for road fuel demand as China's economy is near contraction. EV now set to even more quickly gain share in part because total car market is falling so hard.
Read 25 tweets
11 Mar 19
15 US states are now producing wind+solar at, or above, 10% of electricity sales. This week's letter also cites work from @ramez @MLiebreich @ChrisGoodall2 and @AtifRMian, plus a final wrap on 2018 California EV sales. gregor.substack.com/p/rates-of-int…
2/ Great example of how the theory of "value deflation" (there will be too much variable energy and it will wreck power supply economics) ignored how market arbitrage emerges: you actually want wind+solar to be cheap to drive investment. wsj.com/articles/exten… via @russellgold
3/ Developing an overly complicated theory about how wind and solar introducing cheap energy into powergrids would create an unsolvable problem would be like calling cheap oil in the 1930's a catastrophe. This is how adoption works.
Read 8 tweets
3 Feb 19
Any New Green Deal we propose now will release massive economic savings over time. Appreciate the Op-Ed invite from @Buzzfeed to explain how rapid cost declines for wind, solar, and EV mean a green way forward is now a bargain. Let's do it. buzzfeednews.com/article/gregor…
2/ My advice to new green-dealers: don't come bearing scary high price tags. Lead, instead, with the savings. 65% of the energy the US consumes is wasted, lost to the atmosphere. That lost energy forms your budget to drive efficiency gains through the economy.
3/ Combined wind+solar is growing fast in the US, from 2.3% of our electricity generation to nearly 9% now. The biggest power plant in the country, Palo Verde nuclear, put out a monster 32.3 TWh in 2017. But in that same year, the US created 49.7 TWh from new wind and solar.
Read 12 tweets
18 Jan 19
1/ China just re-shaped the future of the global car market. Let's take a look at the numbers rolling in now, as we get the full year picture on China's EV sales and road fuel demand. First and foremost: the sales growth of ICE vehicles has now peaked, in China w/ no way back.
2/ Sales of ICE vehicles peaked in China in 2017 at 28.102 million units. In 2017, EV sold 777 thousand units but it was not enough to blunt ICE sales. And then, last year, the EV earthquake happened: EVs sold reached 1.26 million units. ICE tanked, to 26.821 million.
3/ EV reached, therefore 4.49% of China's total vehicle market last year. Most have not fully absorbed the implications as EV now take full control of marginal growth. EV policy is now paired to both industrial and climate goals. See: EV Fireworks in China us7.campaign-archive.com/?u=0860f685d9d…
Read 16 tweets

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