Germany To Severely And Intentionally Cripple Their Economy; Will Limit Locally-Produced Natural Gas; To Ban Fracking -- New York Times; Potpourri; July 6, 2014

A recurrent theme that readers will recognize is the widening gap between the EU and the rest of the world when it comes to energy. In fact, it's one of "The Big Stories" that I follow: Europe at a tipping point.

It seems that business writers often ignore the two biggest stories when writing about global macro-economics. In the US, the big stories are ObamaCare and the energy revolution. In Europe, the big story is the continent's contrarian view of energy. The New York Times provides another glimpse of that contrarian view in a story published just the other day in which the headline noted that Germany will severely and intentionally cripple their economy curtail fracking:

Germany’s ministers for energy and the environment are seeking a ban on shale gas and oil drilling over the next seven years because of worries that the practice could pollute drinking water and damage the environment.

Chancellor Angela Merkel’s government had planned to introduce legislation in the autumn to regulate hydraulic fracturing, or fracking, bringing an end to a de facto moratorium on the practice.

But Barbara Hendricks, minister for the environment and a member of the Social Democratic Party, part of the governing coalition, said at a news conference on Friday that a framework of key points on the legislation agreed to with Sigmar Gabriel, the economy and energy minister, would result in the “strictest regulations we have ever set.”

“There will be no fracking for economic purposes in Germany in the near future,” Ms. Hendricks said. But she said that shale drilling could be used for exploration.

Ms Merkel and the country of Germany is in a world of hurt. Expect to see more German manufacturing move overseas, which is fine: Germany's economy will become more strongly tied to the tourism industry. My hunch is the Germans will be using more and more coal over time.

If you go to the link on "Europe at a tipping point" (above), note: Europe may be the only continent in the world to depend on imported energy -- EU Council President.

If you go to that link, scroll up and down the headlines from the past two years: it's not a pretty site/sight.

Even op-ed at WSJ thinks Germany is nuts: German's fracking follies (July 8, 2014). Actually, it probably is not that big a deal. From the op-ed: Germany already imports 90% of its gas supply. Thus, banning fracking will not change the equation. It will simply prolong the misery.

Of course, Germany's fracking follies is not helping the EU's "united" stand against Putin in the Ukraine. LOL. The AP, over at Yahoo!Finance is reporting, July 8, 2014:

A clutch of countries is breaking ranks with the EU's efforts to put economic and diplomatic pressure on Russia over Ukraine and building a pipeline meant to carry huge amounts of Russian gas to their doorstep.

Their defiance of a European Union stop work order is more significant than just another missed chance for Europe to call out the Kremlin. Russian natural gas already accounts for around a third of the EU's needs. The South Stream pipeline could increase Russian supplies to Europe by another 25 percent, potentially boosting Moscow's leverage long after the Ukraine crisis fades.

Adding to the skein of Russian pipelines already ending in Europe, South Stream would go through Bulgaria, Serbia, Hungary, Slovenia, Austria and Italy in one leg and Croatia, Macedonia, Greece and Turkey in a second. The European Commission, the EU executive, has ordered a construction moratorium over concerns with Russia's dual role as pipeline owner and gas supplier. It has also delayed some political talks on the pipeline amid the crisis in Ukraine.

For a related post on this chess match between Putin and Obama, click here.

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Peggy Noonan Piece In Weekend Edition, Wall Street Edition

Ms Merkel will soon go the way of Mr Obama, I assume.

I don't know if we sufficiently understand how weird and strange, how historically unparalleled, this presidency has become.

We've got a sitting president who was just judged in a major poll to be the worst since World War II. [That list would include ... George W. and ... drum roll ... Jimmy Carter.]

The worst president in 70 years! Quinnipiac University's respondents also said, by 54% to 44%, that the Obama administration is not competent to run the government.

A Zogby Analytics survey asked if respondents are proud or ashamed of the president. Those under 50 were proud, while those over 50, who have of course the longest experienced sense of American history, were ashamed.

We all know the reasons behind the numbers. The scandals that suggest poor stewardship and, in the case of the IRS, destructive political mischief. The president's signature legislation [ObamaCare], which popularly bears his name and contains within it the heart of his political meaning, continues to wreak havoc in marketplaces and to be unpopular with the public. He is incapable of working with Congress, the worst at this crucial aspect of the job since Jimmy Carter, though Mr. Carter at least could work with the Mideast and produced the Camp David Accords. Mr. Obama has no regard for Republicans and doesn't like to be with Democrats. Internationally, small states that have traditionally been the locus of trouble (the Mideast) are producing more of it, while large states that have been more stable in their actions (Russia, China) are newly, starkly aggressive. That's a long way of saying nothing's working.

Which I'm sure you've noticed.

Yes, I did notice. This op-ed dovetails perfectly with a note I posted the other day about military commanders taking an oath, as it were, to make things better than they found it when they take a new command.  More from Peggy Noonan:

This is a president with 2½ years to go who shows every sign of running out the clock. Normally in a game you run out the clock when you're winning. He's running it out when he's losing.

All this is weird, unprecedented. The president shows no sign—none—of being overwhelmingly concerned and anxious at his predicaments or challenges. Every president before him would have been. They'd be questioning what they're doing wrong, changing tack. They'd be ordering frantic aides to meet and come up with what to change, how to change it, how to find common ground not only with Congress but with the electorate.

Instead he seems disinterested, disengaged almost to the point of disembodied. He is fatalistic, passive, minimalist. He talks about hitting "singles" and "doubles" in foreign policy.

I assume everyone, on both sides of the aisle have seen this; it's just that Ms Noonan articulates it so well.  I said the same thing, a long time ago, that Mr Obama is simply "hoping" that the last two years of his administration is uneventful.

Piling on. The theme continues with other writers. On Monday, July 7, 2014, Texas Governor Perry is quoted as saying that President Obama is either "inept" or "doesn't care" with regard to the US southern borders breaking down. I think we are seeing, for the first time among modern presidents, a sitting president simply walking away (or golfing away) from the presidency. Apparently Eisenhower did much the same thing but one might argue things were a bit different then.

Update, July 25, 2014: I originally posted this elsewhere but felt it was poorly written and wanted to bury it here --

On October 21, 2013, I had a post on the lame duck presidency. Recently I posted a note suggesting that years from now one might be able to go back and determine the "exact" day the president walked off the international stage. Peggy Noonan also wrote about that which I linked on July 6, 2014.

I was reminded of all of this when I read the story that the president has penciled in a two-week August vacation at Martha's Vineyard. The fact that he has booked a two-week vacation does not bother me in the least: a president is never on vacation; a two-week vacation is the American norm; and, everything pretty much comes to a stop in Washington, DC, anyway, in August.

However, what caught my attention was that the mainstream media is starting to catch up with Peggy Noonan, noting that "the president shows no sign—none—of being overwhelmingly concerned and anxious at his predicaments or challenges." The AP writes:

The White House says Obama will head north on August 9 and stay until August 24, when he returns to Washington. It will be the longest summer vacation of his presidency [and could have added, "coming right at the time there are three shooting wars overseas, and an OPEN BORDERS / OPEN ARMS policy closer to home that seems to be running out of control"].

There are three shooting wars -- all of which are pretty significant -- Iraq, Israel-Hamas, and the Ukraine -- and the US is pretty much taking a spectator role in all three. Not that the US could do much even if it wanted, but the president seems very, very aloof. His aides suggest that aloofness reassures the American public that things are not in dire straits internationally. Today's Gallup poll shows the president has a 39% approval rating.

I don't think the actual fact -- that he's going on an extended vacation -- is as interesting as the fact that the mainstream press is starting to report -- by extension, define -- a new chapter in the Obama presidency. 

I think one can argue that the date can be easily pinpointed; a very specific date, in fact. I think it was when he turned down Maliki's request for fighter aircraft to go after the insurgents building up in the north of Baghdad. That decision made it clear that Obama had decided "enough was enough" and that he was no longer interested in "big events" and was going to enjoy the last two years of his presidency. 

So, I think he decided some time ago to "quit" as it were, and enjoy the good life. The press is now finally starting to realize that. Whether that is accurate or not, if the press "believes" that and starts to write articles with that common them, that will define Obama's last two years as president. 

The president runs the risk of letting the mainstream media define his last two years as president. He better start writing another book.

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Great Lakes Rising ... To Everyone's Surprise

Even Scientists Suprised

The Star Tribune is reporting:

Predicting water levels more than six months into the future is all but impossible.

Except for Algore and The National Geographic which can predict how much the oceans will rise one hundred years from now. LOL.

"Predicting water levels more than six months into the future is all but impossible." -- their words, not mine.

But I digress. To everyone's delight, and scientists' surprise, global warming has resulted in rising water in the Great Lakes:

Lake Superior may be the one spot in this waterlogged state where people are happy to see the waters rising.

After years of parched shorelines, water levels in the Great Lakes have come rushing back. The crowds that flock to the Superior shoreline this holiday weekend will find harbors deeper and beaches narrower than they’ve been in 15 years.

“I hope this lasts,” said Dave Tersteeg, director of parks and recreation for the Arrowhead resort town of Grand Marais. Water levels have been so low in recent years, he said, “there was some real fear that we’d have to dredge the harbor.”

Boats bob in the town harbor beside ramps that are nearly level with the lake surface. Last summer, the ramps tilted toward the depleted waterline at such a steep angle, Tersteeg worried for boaters’ safety. The water’s deep enough now that even the largest sailboats can pull in to refuel. Last year, he said, they risked scraping the harbor floor.

Superior’s water levels are almost a foot higher than they were at this time last summer and 7 inches higher than average.

And, yes, the writer says it's all due to global warming (now called climate change, apparently since the earth stopped warming in 6 A.G. 

And more:

The waters have rushed back at speeds that astonished and delighted residents, scientists, ports and resorts. Heavy rainfall fed the lake’s tributaries and the severe winter capped Superior with thick sheets of ice that slowed evaporation.

A reader points out that whether the ice is one-half inch thick or six feet thick, there is no evaporation from the water below the ice.

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Inexplicable

Even in a state where fracking is banned, they are experiencing earthquakes.

There is a report of an earthquake, over the weekend, magnitude 2.5, in New York State. Fracking is banned in the state. George W. Bush is not visiting the state. Inexplicable.

I'm sure the link will soon break; here's the story:

The Lamont-Doherty Cooperative Seismographic Network says a 2.5-magnitude earthquake was recorded at 10:46 in a heavily wooded area of Garrison, about 3 miles beneath the Appalachian Trail and a few miles north of Peekskill in Westchester County.

Seismologist Leonardo Seeber told the Journal News it wasn’t along any known fault lines.

The United States Geological Survey told 1010 WINS the tremor is “normal” and such occurrences happen around the world all the time.

That's interesting: I thought earthquakes were found only where they were fracking.

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Also Inexplicable

Danica Patrick crossed the Daytona finish line before Jeff Gordon, Jimmie Johnson, Tony Stewart, Dale Earnhardt, Jr; Brad Keselowski, and a host of others, at the Coke Zero 400. One of her finest finishes, she finished #8.