Connecting The Dots -- The $24 Billion Blood Clot -- July 16, 2017

Sub-$2.00 gasoline. Add nine more states to the list. Make America great again.
This is going to help the bottom line of anything connected to the transportation sector. And then it will spill over to other sectors. 

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Update On Intermittent Energy

Random thought for the day: from Forbes, June 3, 2016 - a record year for renewable energy.  

 2015 saw record additions of renewable energy around the world, as well as high-profile agreements and announcements related to renewable energy. An estimated 147 gigawatts (GW) of renewable power capacity was added in 2015 - the largest annual increase ever - and in spite of continued low prices for fossil fuels.

But:

Renewables made up 19.2% of overall global energy consumption in 2015. This is relatively unchanged in recent years despite the rapid growth rates. Modern renewables like wind, solar, biomass, and geothermal power cumulatively made up 1.4% of global energy consumption. For perspective, the number was 1.2% in 2012.

This illustrates one of the challenges renewables face in rapidly displacing large amounts of fossil fuel. In recent years overall global growth in energy consumption has been greater than the additions from renewables. Hence because renewables are such a small part of the overall energy picture, even with their rapid growth rates they struggle to keep pace with overall demand growth. As a result they displace fossil fuels much more slowly than some have projected.

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Connecting The Dots

Monday, July 17, 2017, should be an interesting day. The story for the past six months -- seemingly reported almost every day on CNBC --  the Trump rally (which they never called it) -- was dependent on tax cuts ("tax reform").

Right now futures suggest we will see new record-setting highs Monday.

Meanwhile, the tea leaves suggest we won't be seeing any tax cuts ("tax reform") this year because, according to CNBC, tax cuts were dependent on finding money in ObamaCare repair to make tax cuts possible.

ObamaCare repair was unlikely to begin with, but with McCain's health in doubt, it is unlikely we will see ObamaCare repair even voted on for quite some time. Even if Senate allows McCain to vote from Arizone, McConnell has already said he will postpone the vote until McCain returns to Washington.

Most ironic is that many states will lose billions of dollars in payoffs to have their senators vote to support McConnell's ObamaCare repair bill. One story suggested that $24 billion had already been promised to senators of red states if they would vote for ObamaCare repair; supposedly McConnell has $188 billion in the "Senate slush" fund that he can legally use to entire senators from red states to support his bill.

But the McCain blood clot may have stopped all that. If so, McCain's condition has suddenly beocme the $24-billion blood clot, and maybe even the $188-billion blood clot. The even more concernng story is that this "minimally invasive" surgery of drilling a hole through McCain's cranium into his brain cavity to remove a "small" blood clot could be much more serious that originally reported.

First, the surgery itself may be "minimally invasive" for someone else, but for McCain it certainly wasn't "minimally invasive." At least if this happened to me, I wouldn't call anyone drilling a hole in my cranium minimally invasive; it would be a "big deal."

Second, and worse, no one has talked about the underlying reason for a "small" blood clot to have been found. I would assume there was some underlying condition that led to the clot. If so, the question arises, are their other blood clots waiting to reveal themselves; is the underlying condition life-threatening (cancer is one of the leading causes of hypercoagulability)?

Ironically, the man Trump loves to hate may be the man he loses for the 51 votes Trump needs to get anything done, including tax reform.

The tea leaves certainly suggest that tax reform is dead for this year, maybe forever under the Trump administration (at least meaningful reform). If so it brings into question the CNBC story line for the past six months: no ObamaCare repair, no tax reform, no stock market rally.

Which brings us back to Monday. Normally if bad news comes out over the weekend, it is reflected in the stock market at the opening on Monday. Anyone following the stock market and buying into the CNBC story would agree that it was bad, bad news over the weekend.

Others suggest that the market is "for real." It is not based on tax reform any more.

I'm looking forward to an interesting Monday.

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