Bishop Hill Carneyform waffle
Yesterday, the House of Lords Economic Affairs Committee took evidence from Mark Carney, the governor of the Bank of England, who has shown himself keen to use his position to promote his environmentalist ideology.
A review of the transcript shows Carney be a consummate politician, able to waffle at any length necessary in order to have to answer a question. I'm therefore going to paraphrase one particular exchange that I think is revealing.
Nigel Lawson: You have said that insurance companies are at risk of having their fossil fuel investments becoming stranded because carbon policies will eliminate demand. But the IEA say that demand for fossil fuels is going to go up. Explain.
Mark Carney: It is important for us to warn the insurance market. There might be a risk.
If you have a strong stomach for bureaucratic verbiage, do take a look at the original. Carney seems almost completely unable to defend his original comments, flannelling furiously about "risks" in the "tails". It seems that what he was telling the insurance industry had nothing to do with serious risks to their companies and everything to do with promoting an extreme environmentalist position.
Someone who is willing to play games with the markets in this way is not someone you'd want to have at the helm of the Bank of England I would say.
Reader Comments (39)
The Peter Principle.
Risk? Risk? Son, I don't think you can handle risk.
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Is it the BoE's place to be advising investors?
They have risk managers for that.
"Someone who is willing to play games with the markets in this way is not someone you'd want to have at the helm of the Bank of England I would say."
+1
Mark Carney is a Goldman Sachs man - I think we can say Goldman Sachs now runs the Bank of England in the interest of American investors.
CEO of Goldman Sachs Lloyd Blankfein wants to expand the lending of the big private investment banks. This will wipe out smaller banks - in the UK - and especially the Public Banks in Germany.
In America there is only one Public Bank in North Dakota - but there is a campaign group to spread public banking to: limit the boom and bust chaos caused by the mega banks like Goldman Sachs; and to limit to political power of those who run the mega banks. I think this is a good idea,
Here's a link to an American campaign group the Public Banking Institute.
http://www.publicbankinginstitute.org/mission
Isn't Carney's wife some sort of latter-day hippy?
Money people have been trying and succeeding in gaming the system for a long time. However, cutting fossil fuels is not in the hands of the money makers. They can't artificially end the use of oil and coal without nearly every country signing up to destructive power loss. You can PR people into changing their energy supplier but you can't persuade them to change to no power.I really can't take any warmist seriously who can't see that
Warren Buffett:
The effects of climate change, "if any," have not affected the insurance market, billionaire Warren Buffett told CNBC on Monday—adding he's not calculating the probabilities of catastrophes any differently.
http://www.cnbc.com/id/101460458
Carney, is a plant, he is smooth as silk and as opaque as acid etched frosted glass. Alumnus of the giant betentacled monster killer squid - yes the investment bank GS that saw no problem [moi?] in betting against its own clients - it tells you all you need to know about these very smelly fishy types.
I trust Carney, as far as I could throw a D9 Caterpillar bulldozer and that's not much.
Mark Carney is a very lucky man.
His claim to fame is that Canadian banks did not suffer meltdowns in 2008 because they were not allowed to make the same kind of loans that other banks had made. But this was not his call - simply a left-over from previous Bank of Canada governors. At the time, all the pressure was on to change the rules as Canadian banks were at a disadvantage. Carney was just lucky that the BoC was so slow about changing things, giving the impression that he was some kind of whizz-kid and later on getting head-hunted to the BoE job.
Greens are going hell for leather with their 'Divestment' campaign. Perhaps it's all they have left? Back in the real world a growing global population with a demand for cheap energy to match will ensure 'stuff what works', eg coal, gas, oil, will remain the majority supply-demand energy sources for decades to come. Only a currently undiscovered technological breakthrough will change that, while notional divestment by a small number of green-tinged hippy university fund managers won't. Carney meanwhile is CHA.
Uncle Badger is correct - Mrs Carney is an enthusiastic greeny.
Cherchez la femme...
Tip : Willie Soon's crime is "not showing FAITH in warmism" and being heretical in publishing papers showing evidence for the Suns involvement in CC
Says : Dr. Jeffrey Foss is Professor Emeritus of Philosophy at the University of Victoria and the author of Beyond Environmentalism: A Philosophy of Nature.
This is worrying. Central Banks need to have a an innate conservatism, providing the structures in the money market that will prevent minor fluctuations escalating into a major crisis. The credit crunch showed the Central Banks were too occupied with the minutiae of smoothing the minor fluctuations that they failed to understand the structural changes and resulting system imbalances that were building up to disaster. Part of this is an understanding of financial risk. We have a Governor of the Bank of England who clearly does not understanding the nature of financial risk. The oil will run out quickly, but gradually over decades. Carbon policies are only being adopted in a small number of developed nations, and not in the emerging economies where demand is still rising. Alternatives to fossil fuels are still far more expensive, and not likely to be cheaper anytime soon.
I disagree with the post assessment. I think Carney was warning about - and rightly so - the government's potential for punitive carbon taxing. He was saying that excessive, unanticipated taxes could make coal, conventional and unconventional (heavy) oil projects uneconomical or at least have low profitability. His warning was about investments that were weighted heavily in such fossil fuel areas.
At the end he noted that government policies were the risk. Transparency (of plans) was needed to mitigate, manage or eliminate those risks.
You misread him, seeing in his comments an anti-fossil fuel bent, when what he was doing was saying that arbitrary and sudden government action can deep-six investment portfolios overnight.
The "tail end" comment was also misunderstood. Carney was simply saying that the tail end of risk - the spread of outcomes that are negative to asset valuations - has very high damage potential even though the percentage of outcomes built into the case study is low. Government taxation is a tail end event, something you can't anticipate but would sweep through the system like a Cat 5 hurricane coming ashore.
He is not proposing, he is just describing the landscape he sees.
Some background to the wife. Has a passion for recycled vegan shoes and expensive home refits.
http://www.telegraph.co.uk/finance/economics/9704385/New-Bank-of-England-Governor-Mark-Carneys-wife-an-eco-warrior-who-says-banks-are-rotten.html
The comments are good. :)
Has Carney always been an enthusiastic greeny or has it just overwhelmed him since to July 1st 2013?
Does he think that Insurance companies don't understand risk?
Mick J the problem with recycled vegan shoes, is that they will probably squeak, groan, and protest, if asked to do anything useful.
A risk of a risk?
The ability to detect "risk" in homeopathic quantities seems to be the basis of virtually all public sector rent-seeking.
Maybe he's just setting up his next position after the BoE?
It seems all the money Dale Vince scammed from his Tax Payer subsidy Windfarms
His Ex Mrs is getting it all.Ha ha
http://www.bbc.co.uk/news/uk-england-gloucestershire-31832392
In the meantime the sensible Swiss vote 92% against any form of carbon tax. A massive hit to on the warmists prior to Paris. I think the insurance industry should look at that before any warnings from the banking guys.
How many of us actually trust bankers and why should we regard this example as being in any way different from his colleagues? In my experience, most of us are very suspicious of bankers and their knowledge of anything at all appears suspect. If they were as knowlegable as they claim to be, why did we have the major banking melt-down of the very recent past?
Ah.........dear God and the glory of living in a true democracy, what eternal bliss it would be!
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Doug Proctor, Carney is a political dancer of much spin and expertise.
Carney, he knows full well where the axis of UN-EU-US and UK governments lie in respect of 'carbon emissions' and the required but not worldwide imposition and enforcement of green taxation, he remarks that some care needs to be taken not to kill the fatted calf [British manufacturing and industry] too precipitately and therein is a veiled and obscure warning, bleed it don't kill it.
Though, lets face it we all know where Carney stands in relation to the green mania - he is fully signed up member of the green loony club - crony corporate member.
Apologies,
Carny is not one of the better Canadian exports. He is counterbalanced by McIntyre and many others however.
@son of mulder You know most insurance companies don't understand risk....
I do wish other commentators would get with it. The correct word is banksters NOT bankers.
Doug Proctor:
In my estimation the risk is precisely the opposite one: energy businesses that depend on subsidy and artificial markets may find governments and electorates unwilling to continue the largesse. Of course, so long as they can bribe the key decision makers they may think they are OK. Actually, I'm surprised Lawson didn't make the point. The risk that crying wolf no longer works is surely increasing with each passing extension of the Pause.
It really is waffle. With cheese curds and gravy.
Doug Proctor said:
Carney says "In the property and casualty business, in the re-insurance business, one of the top risks is climate change."
It smells a bit of wanting insurance regulators to tell insurance companies they must make provisions for whatever infallible view of climate change the regulator chooses. This would achieve three things in a roundabout fashion - depress investment in fossil fuels, increase investment in green things and get insurance companies lobbying hard for carbon taxes and other climate change policies.
"Wouldn’t it be better if you focused your attention on those instead of engaging in green claptrap?" said Lawson
that is a valuable phrase that Delingpole mentions in his short analysis (12 hours ago)
- Points out Insurance corps deliberately hype the scare to gain higher premiums.
..and it is their business to look after their own risk ..not to have the government interfere on their behalf to protect their risks
@cheshirered Shouldn't the BoE governor be advising the gov about the dangers to peoples pensions/jobs due to activists bullying 'Divestment' campaigns
What son of mulder said.
Bish,
As the French say: cherchez la femme.
Carney's wife is a crusading environmentalist and proselytizing extreme vegan [no leather shoes or any items that contain animal byproducts] who has a reputation of badgering guests around the dinner table. Look no further for the core explanation for Carney's stance.
Said in passing, Carney was a good governor of the Bank of Canada, but she certainly was not the toast of Ottawa.
The lesson of the last few decades is that whatever does happen to the markets won't ever have been predicted by any mainstream banker, academic, politician, environmentalist, insurance company or TV pundit.
Doesn't seem any doubt about his stance here:
http://touchstoneblog.org.uk/2014/10/bank-of-england-governor-fossil-fuels-unburnable/
"Bank of England governor Mark Carney warns that the vast majority of oil reserves should be considered “unburnable. He called for climate change risk to be mainstreamed, because continued fossil fuel investment poses a serious financial risk in a carbon-constrained world, he told an audience at the World Bank.
Carney has re-emphasised his support for the idea that oil companies’ reserves could be stranded assets – still valued by investors, but ultimately going to embody losses. “The vast majority of reserves are unburnable,” the Bank of England governor said, if the world is to avoid catastrophic climate change."
First to know what he thinks is unlikely based on what he says. At least in Canada he kept his mouth shut on CO2 etc since PM Harper is a skeptic but harper has to walk a tightrope not to be called out as a denier and worst. He pulled out of Kyoto and has said many times, there is no plan for any form of carbon tax. IMO that is one of the main reasons Obama wont approve the XL pipeline. Anyway why should head of the BOE have anything to say one way or the other?
Oh dear, my feelings would appear to have come to fruition. a nutjob as Governor of the BoE. Heeeelp!