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Europe May Be Insolvent But It Sure Is Guzzling Electricity
An interesting chart depicting European monthly yoy change in electricity consumption comes to you via Goldman. Now that Europe's true fiscal problems are being exposed, look for such datapoints, which Goldman is of course using as a pitch to just how great Europe's condition is (for a real indication how "good" things are, check the EUR Libor, or the TED spread posted earlier, but let's not forget Jim O'Neill fluff piece about How Good The World Is, issued about 50 S&P handles higher - tells you all you need to know about bias), another, and more objective way to read the data, is to expect European electric output to decline materially. What that may mean for nattie and spent uranium rods, one can decide on their own.
And just in case Goldman's bullish bias is ask for, here it is via Erik Nielsen, who has so far been rather completely wrong on the way things in Europe have panned out:
I know that not very many of you care much about macro data these days, but you should…
Before you go home for the weekend, take a look at these data for European electricity consumption, kindly forwarded to me by Deborah Wilkens (utilities research). For April, Spain, Belgium and Finland all up a whopping 6-7% yoy. Germany and France had similar strong increases in March followed by something like 2% in April. In other words, as also supported by the PMIs earlier today, the European recovery continues to look very well under way.
Key question remains, of course: Will these good macro numbers gradually help calm financial markets - or will the market eventually strangle the real economy? I suspect that the real economy has some 6 months to calm down financial markets; otherwise lack of financing will cause a real side slow-down.
Erik
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Is there a conincidence with this report from dear Jim and the fact that National Grid is launching a huge rights issue? I wonder if Goldman is handling that right s issue, Anyone know?
Combustion requires energy in the form of oxygen, and other materials, such as:
http://www.youtube.com/watch?v=wloOuDw5rt0
I love charts, why they are almost as good as tarot cards.
can anyone even make sense of this chart? It looks like a Slinky going down a stairs.
I love this chart,
seems the cats
got into the
sewing box. May
I just point out
that this has been
the coldest Spring
I have ever known
thus the spike.
Good point.
Global warming!
...I mean, climate change!
Yeah, cuz, um, unless the temperature's "just right", you uh, need to let us on Wall St. trade carbon credits. The future of the world depends on it.
Roughly: Apr 08 to Apr 09 yoy consumption = -9%, Apr 09 to Apr 10 yoy consumption = +3%, therefore Apr 08 to Apr 10 net "economic recovery" = -6.3%.
Someones on the ball...
Use Belgium for examlpe... down April 2009 by 15% YOY... up April 2010 by 3% YOY which means consumption is still 12% or so down off of April 2008. Talk about conservation!
What country is green?
Luxembourg?
Greenland, of course. :)
The Duchy of Grand Fenwick.
Last years YOY was way down, so isn't this more like reversion to the mean?
(Woo hoo! Easy CAPTCHA!)
If you want to dance, the jukebox needs power. Untill you don't feel like dancing anymore...
Typical goldman.....give me a five year chart not one that merely shows a bounce of the lows of the spring of 2009.
Interesting that at Goldmans hopium conference, they never pointed out that US energy consumption for April y/y was actual negative (a bit less than .5%), normalized for weather.
Jan/Feb/March all up April not so much. Can one say inventory restocking and then what?
Then what?
Return and restock over and over to keep the numbers good.
Idiotic. Not showing industrial demand for electricity. Who gives a shit about residential usage? It's 50% weather-related anyway. There's no fibbing industrial usage. Because electricity is a measure of power and power is measure of work applied, if you use less electricity, you're generally doing less work. You could be becoming more efficient, but good luck retrofitting an industrial facility for that.
Check out US eia data on industrial usage for the past decade. You can see the gradual decapitalization of US manufacturing from this angle.
Bingo. Finland had a much colder than average Jan-April. 2009 was relatively mild, that plus mild recovery from the early 2009 cliff dive is your 7% increase.
Goldman Clients not pleased (again).
Finland weather in 2010 http://www.fmi.fi/uutiset/index.html?Id=1270030521.html
use google translate if you really want to read it.
The right side of the chart is returning to the same height as the left side.
Return to normal, after a collapse.
Would apply to many charts over the same period. A long chart would be needed to know if there is a longer trend outside the period of collapse.
The chart is an artful lie. Not factually incorrect, but cherry-picked to "prove" a point.
And this shows the economy has ... recovered?
If, accordign to Goldman Sachs, increased use of energy means "...European recovery continues to look very well under way", then how does a 6% drop in electricity use in China square with 10%+ GDP growth? (6% drop was widely reported over the course of several months in 2009)
And the tea leaves say "buy GS".
Actually, Finland is even more export oriented than Germany and especially much more oriented in industrial heavy duty products: world's largest cruise ship was built in Finland (long series of those already), world largest nuclear plant is being built there (lack of energy for industry) and especially heavy engines are one specialty there (Wartsila). So that means industrial investments are starting to recover big time.
Welp. That does it for me. I'm going long on all European markets because the Euros decided to turn on their air conditioners longer than me..
On the other hand, if they used more deodorant on hot days, I guess I should short the market because that means people are outside more and using less AC?
Bottom line - this correlation is like trying to figure out how the French cat ended up with Pepe LePew.
Recent collapse of Eurobond market precipitated by short-selling hedge funds demonstrates China's will to suppress European consumption. Expect soon China's client Russia to interrupt Europe's natgas imports.
Must be all those extra trains to transport grounded passengers !
Or maybe, just maybe...you Yanks just suck big time and the rest of world is leaving you yahoos behind. Good luck with that "spill" but look at the bright side, it is all FREE out there in the Gulf!
yeah, sure. Buy the apex of the curve Erik. You first.
Goldman talking their book...worthless analysis
So your saying it takes a year for europe to retune all their electricity meters to read false? That sounds about right since all it takes is a clip the cover, remove cover, screw the tuning screw a half turn or so and replace the cover.
You can grab UK electricity demand data directly here :
http://www.nationalgrid.com/uk/Electricity/Data/Demand+Data/
Looking at the Jan-Apr data quickly it looks like we have an improvement over 2009 and demand is around 2007 levels.
But as noted before the exceptional cold weather will play some part in that. I would expect with the currency devaluation we should see manufacturers gain, hence the PMI improvement, but with the government "austerity" (where most of the job creation has come from in the last ten years) things will soon be going downhill rapidly when it actually starts.
Also the currency devaluation has led to petrol prices being pushed above the 2008 highs in the UK (http://www.whatgas.com/recent-petrol.aspx), so any gain in manufacturing is going to be more than offset by that...this should all feed through later in the year.
In addition to the weather angle, don't you need to adjust electricity consumption for the amount of heating switched to electricity in hopes of avoiding the Russian's Natgas leverage /near-monopoly?
There is just not enough background info here to even consider using this chart...
Maybe now oil is cheaper people have gone back to leaving their TV’s on standby
Still long Black Gold Someday the sun will shine on me...
At this rate they will be consuming the exact same amount as they did exactly the same month in 2008.
AT least that's what the meters will say. Isn't it great. People cut back on consumption. You just fudge the consumption.
With 4 carrier groups hovering Iran now, I think they are getting ready to get all the uranium rods they need soon. I expect something to escalate soon.
Looks toppy to me. Finland spiking up sure won't offset the apparent slowing in the majors.