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The Un-Manipulated Market That Keeps Merkel Awake At Night

Tyler Durden's picture


It would appear that either Germans have stopped using electricity (now that is some severe austerity) or the 'real' economy in the core powerhouse of Europe's growth is struggling notably more than the nominal price of its stock market would imply. Applying the same 'myth-busting' data-series to Germany as we have in China, it is clear that expectations for greater electricity demand (and implicitly economic growth) are grossly different to the expectations priced into German stocks.

...or they just discovered cold fusion...


Charts: Bloomberg


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Sun, 02/03/2013 - 15:18 | 3211354 ar01
ar01's picture

Easy, the Fed will start buying electricity all over the world. Nothing to see, move along. 

Sun, 02/03/2013 - 15:25 | 3211371 ekm
ekm's picture



Sun, 02/03/2013 - 15:38 | 3211408 Pinto Currency
Pinto Currency's picture


Perhaps renewable energy affecting pricing at the margins as well as slow down in demand:

Sun, 02/03/2013 - 16:17 | 3211504 ThirdWorldDude
ThirdWorldDude's picture

Right, with so many nuke plants around Germany must be "swimming" in free energy... Oh, wait!

Sun, 02/03/2013 - 16:32 | 3211542 ekm
ekm's picture


Sun, 02/03/2013 - 17:41 | 3211690 Pinto Currency
Pinto Currency's picture

Nuke is not free however solar and wind are adding lots of capacity.

Mon, 02/04/2013 - 08:26 | 3212801 ATM
ATM's picture

and they cost more than Nuke. So you do the math.

Mon, 02/04/2013 - 13:49 | 3213706 Panafrican Funk...
Panafrican Funktron Robot's picture

They cost more on a free market basis, with the very large majority of that cost loaded on the front end (ex., wind power has very little maintenance cost, but large up-front cost to build relative to electricity output).  This analysis likely doesn't take into account German electricity subsidies specific to renewables; in many instances the German government fully funded the up-front cost to build.  

Sun, 02/03/2013 - 15:25 | 3211372 EscapeKey
EscapeKey's picture

printing presses use a lot of energy it would seem

Sun, 02/03/2013 - 15:38 | 3211409 Cheesy Bastard
Cheesy Bastard's picture

I think they can just print electricity, right?  It's like when I run out of paper at the office.  I just tell the secretary to fax me some blank paper.

Sun, 02/03/2013 - 15:46 | 3211429 flacon
flacon's picture

good one. But I usually tell her to fax me a beer. I feel a lot better that way. :)

Sun, 02/03/2013 - 15:26 | 3211374 Say What Again
Say What Again's picture

I have 1,000,000 Kilo-Volts between my matress right now.

I also built a Wardenclyffe Tower in my back yard

Sun, 02/03/2013 - 15:47 | 3211434 flacon
flacon's picture

I have 1,000,000 Kilo-Volts between my legs right now.


Wow. Strong manhood! ;)

Sun, 02/03/2013 - 19:24 | 3211892 bobthehorse
bobthehorse's picture

German babes are hot.

They like to dress up as Nazis.

Sexy little vixens!

Sun, 02/03/2013 - 15:21 | 3211358 orez65
orez65's picture

It is what you should expect for a country going into recession.

Sun, 02/03/2013 - 15:21 | 3211360 EscapeKey
EscapeKey's picture

with cheaper electricity there's more monies on the sidelinez


Sun, 02/03/2013 - 15:24 | 3211368 ekm
ekm's picture

LOL, lovely.

Money in the sidelines is simply money printed fresh but left over after everything up for sale was bought up.

Sun, 02/03/2013 - 15:22 | 3211364 ekm
ekm's picture

How many times do I have to repeat this.


The respective governments have already bought up whatever was up for sale of their own stock markets by use of their own 'primary dealers'.

People, that is self evident. If none is buying, the only buyer left is the gov/central/primary dealers.


Gov/central bank/primary dealers is ONE ENTITY with different suboffices.

Sun, 02/03/2013 - 15:25 | 3211369 max2205
max2205's picture

Gas $4.00 now per gal. Barry dropped it before the election and now it's time for pain

Sun, 02/03/2013 - 15:31 | 3211385 Aurora Ex Machina
Aurora Ex Machina's picture

Increasing German renewable power is under-cutting wholesale electricity prices across its borders, which may harm energy investments in neighbouring countries.

The overall picture is of widening impacts on grids across central Europe from the ramp up in German renewables.

German solar power generation was up 47 percent in the first half of 2012 compared with the same period last year, and wind power generation up 21 percent, data from the Fraunhofer Institute show.

One impact from rising intermittent German wind power generation in the north of the country is of electricity spilling into neighbouring networks en route back into southern Germany or Austria, called loop flows.

Another is of rising exports of cheaper, intermittent power, undercutting the economics of baseload power in Germany's neighbours.

Exports of German power to the Czech Republic, for example, are up four-fold in the first 10 months of the year compared with the same period in 2010.

A group of four east European grid operators, from the Czech Republic, Hungary, Poland and Slovakia, has argued to split the Germany-Austria bidding zone, limiting the geographical area across which bidders can purchase wholesale power directly at the same price.[source]


Whilst industrial output is certainly down a bit, this is likely the cause for the spike downwards you're seeing, surely?

Sun, 02/03/2013 - 15:36 | 3211402 ekm
ekm's picture

Typical climate change bogus article from Reuters.

Sun, 02/03/2013 - 16:22 | 3211515 Aurora Ex Machina
Aurora Ex Machina's picture

I'll spell this out nicely for you:

It doesn't matter if you think Climate Change is real or not, decisions are being made on the premise that it is, so hedge accordingly. Unless you're claiming that the Reuters' story is false, Germany hasn't shoved massive amounts of subsidies into the clean energy production side, and is not exporting the glut?


In for a penny, in for a pound as they say...

Sun, 02/03/2013 - 18:23 | 3211760 insanelysane
insanelysane's picture

Climate change is real; it just comes down to if it is caused by humans or caused by other natural forces.  

Sun, 02/03/2013 - 18:29 | 3211773 knukles
knukles's picture

Sun, not son, grandson, step son, neighbor's son, unknown son, bunches and bunches, gobs and gobs of sons, here or there sons, everybody's son, momma's son, yo momma's son, idiot son, numblah one flavolite son, just plain fucking SUN

The A in AGW should stand for something along the lines of Astronomical ...
Why in case you all missed it there's been released some semi private (no longer) papers form the UN mentioning that golly gosh gee whiz, the SUN just might account for most of that stuff in reality, anyhow.

Sun, 02/03/2013 - 18:37 | 3211787 Aurora Ex Machina
Aurora Ex Machina's picture

Disproven. Old, old talking point via Koch Industries. ZZZZzz.

An no, I'm not going to do the massive derail here. Either you believe in science, or you don't. I can't police your inability to deal with reality no more than I desire to police your intake of mind-bending substances. All I ask is that you aren't included in actually deciding anything based on your opinion.


That's why meritocracy is good, jah?

Sun, 02/03/2013 - 18:56 | 3211832 ThirdWorldDude
ThirdWorldDude's picture

Buzzzz. Offff.


(not one, but two separate articles from NASA)

Sun, 02/03/2013 - 19:03 | 3211843 Aurora Ex Machina
Aurora Ex Machina's picture

Do you even understand the links you're presenting?


From the second NASA link:

Raymond Bradley of UMass, who has studied historical records of solar activity imprinted by radioisotopes in tree rings and ice cores, says that regional rainfall seems to be more affected than temperature.  "If there is indeed a solar effect on climate, it is manifested by changes in general circulation rather than in a direct temperature signal."  This fits in with the conclusion of the IPCC and previous NRC reports that solar variability is NOT the cause of global warming over the last 50 years.



Fuck off.

Mon, 02/04/2013 - 00:55 | 3212573 ThirdWorldDude
ThirdWorldDude's picture

Shove your AGW so deep up your ass so it tingles your throat!


Fuck you and the carbon credit financed Syndicate you rode on to...

Tue, 02/05/2013 - 19:36 | 3218146 Aurora Ex Machina
Aurora Ex Machina's picture

When you learn to actually read a NASA PR report, and don't quote some backwater nonsense source, I might listen to you.


Oh, wait.


Come back to me when you can actually understand the science - until then, let your intellectual betters deal with it. Muppet.

Sun, 02/03/2013 - 18:37 | 3211789 tip e. canoe
tip e. canoe's picture

latest vid from suspicious0bserver

Energy from Space

I'm always suspicious when I hear only one side of any story.

Sun, 02/03/2013 - 19:14 | 3211837 Aurora Ex Machina
Aurora Ex Machina's picture

There's some serious science in here, not just a young seeker without much clue.

Remember, 9/11 saw a +2 rise in only a few days of planes being grounded. Global Dimming via planes, 'tis real.


What if I told you that chemtrails were real, but were being used to increase the albedo and to keep a certain strain of beastie from hitting the ground? That fits the science far better than any Alex Jones nonsense. I see the "chemtrails", and know that the war being fought - is being lost, but not in the way you think it is. Just depends what blue skies bring. Terraforming; always happens on the level of the micro, not the macro. If you've the nose, look into bacterial dispersant warfare.

“Hope,... which whispered from Pandora's box after all the other plagues and sorrows had escaped, is the best and last of all things. Without it, there is only time. And time pushes at our backs like a centrifuge, forcing outward and away, until it nudges us into oblivion... It's a law of motion, a fact of physics..., no different from the stages of white dwarves and red giants. Like all things in the universe, we are destined from birth to diverge. Time is simply the yardstick of our separation. If we are particles in a sea of distance, exploded from an original whole, then there is a science to our solitude. We are lonely in proportion to our years.”


What were the skies like when you were young?

Sun, 02/03/2013 - 20:18 | 3211987 tip e. canoe
tip e. canoe's picture

supposedly, there's also fungi in space

personally, i'd rather be bombarded with e.coli & metal-eating fungus than getting sprayed by an unknown combination of chemicals from a recipe concocted by a room full of Dr. Strangeloves.  that's what probiotics are for.  but that's me. 

thing is: where is there on the planet where i can live with the consequences of my choice and not by yours?   or is it written in the Grand Rules of "Meritocrachy" that only those who are deemed "Meritocritous" are entitled to make the Decision for the rest of us?

tl/dr i see your little fluffy clouds and raise you golden ones, shining with the sun.

Sun, 02/03/2013 - 21:11 | 3212036 Aurora Ex Machina
Aurora Ex Machina's picture

Well, lordy, lordy lordy, won't you look at all those junks.

The "jah" was an ironic tilt against the 4th Reich, n'cest pas? (JA! <> JAH, you'd have to have a basis in post-war comics for that though - rough translation for you Yanks: many a comic where the evil Germans were fooled by the cunning Tommy just saying "Ja!" when challenged) I forget that subtlety doesn't always transpose (although, I appreciate the flip to the Jamaican for a smile). 

Fungi in space is all too Cthulhu; all I know is that when I admitted defeat in a location, the air was suddenly full of the planar drift.


As for that serious question: I was told, "there are few places without them now".  For the outcome? You should visit I.M. Banks "Player of Games". “Escape is a consumer goods like another".

[Hi-jinks - read until the end, for the real meaning, both in the book, in the world and in the thread].


“As every flower fades and as all youth
Departs, so life at every stage,
So every virtue, so our grasp of truth,
Blooms in its day and may not last forever.
Since life may summon us at every age
Be ready, heart, for parting, new endeavor,
Be ready bravely and without remorse
To find new light that old ties cannot give.
In all beginnings dwells a magic force
For guarding us and helping us to live.

Serenely let us move to distant places
And let no sentiments of home detain us.
The Cosmic Spirit seeks not to restrain us
But lifts us stage by stage to wider spaces.
If we accept a home of our own making,
Familiar habit makes for indolence.
We must prepare for parting and leave-taking
Or else remain the slaves of permanence.

Even the hour of our death may send
Us speeding on to fresh and newer spaces,
And life may summon us to newer races.
So be it, heart: bid farewell without end.”



Let us return to our roots.

Sun, 02/03/2013 - 21:23 | 3212083 tip e. canoe
tip e. canoe's picture


who said anything about escape?   maybe more like engage, just not an Engagement as Defined by the Annointed Ones (whether the O.G.'s or the 2.0's makes no difference when looking from above (or below)).

that pyramid flotaing on the top of the Pyramid looks like a cage to me, even with the fancy Eye painted on its side.    there's a world that exists beyond the Grip if you only are willing to let go and trust in those you are now look down upon.   just don't wait too long to let down your hair, Repunzel.   even bodhisatvic behavior has its expiration date when a tsunami approaches.


Mon, 02/04/2013 - 00:07 | 3212500 knukles
knukles's picture

"there's a world that exists beyond the Grip if you only are willing to let go"



Tue, 02/05/2013 - 20:07 | 3218142 Aurora Ex Machina
Aurora Ex Machina's picture

Rule x3 as taught, and of course it is a cage:

Genocide / death to unbelievers

Rape / female subjugation

Ignorance / culling birth of mind

Those are the angles of the triangle, and what keeps it going - not the usage, but the bulwarks to keep them out, to allow the higher Eye in the space without them. Remember: God is not good.

If you want me to engage, then there is only one answer. Why save you?

How sick I am of the unannounced and engaged flitting by and telling me that I am "too heavy". Perhaps they should remember their planar responsibilities and either engage or educate?  And if that is the "lighter" side, then ~ so what.


Think well on your position: when both sides descend into rabid fundamentalism, then you're both open to the wave. Really.

Think hard and long: perhaps this time, both of your sides are now totally and ultimately on the road to obsolescence.


And that is a good thing. Oh, and bye the bye - that's an INTERNATIONAL community, a perfect blueprint for world order being created, in the 1960's. Listen more closely, little ones. Closer, closer, closer.

Now let your hair down. Tell me to save them? Hmm. You should treat your genetic outliers better, methinks, lest they bite you. Sterile Mules? Now, that's a bad place to put a being; without a future, who knows what present they'll damage?

All the blame, when your communication is so bad. Sigh.

Mon, 02/04/2013 - 08:21 | 3212790 hyperbole2000
hyperbole2000's picture

Your premise is correct. The sun is the biggest input  into the planet's energy balance. The millions of yeas of solar input contained in the fossilozed plant matter called hydro-carbons is evidence of that.  In 100 yearw we have belched into the energy balance 1000000 yeas of solar input.

Sun, 02/03/2013 - 19:31 | 3211906 Seer
Seer's picture

The base argument is this: Either the climate is changing or it is not.

Those claiming that the climate is not changing are effectively arguing that everything is static: for everything to be static we would have NO weather system, the water cycle would NOT exist.

Many civilizations have collapsed due to an inability to manage severe changes in climate.

Climate change, therefore, DOES occur.

Humans are (proven to have been) affected by changes in climate.

Because humans affect their surroundings logic would tend to agree that human have an affect on the climate.

It really comes down to how much change is occurring due to human activities.  I tend to step past all of this and go directly to what change WILL happen no matter what humans do- the next glacial period WILL come, and all we could ever hope to do is change the time in which it happens (a week? a decade? a century? who knows!).  But, tossing away logic and the scientific method of discovery is, IMO, a stupid thing to do.

People will profit off things no matter which way things go.  And TPTB will surf the currents like they always do...

Sun, 02/03/2013 - 21:48 | 3212125 A Humble Man
A Humble Man's picture

I sure hope climate change is real!!!!   It was minus 30 here last week.  Bring on the warm winters.  I cant wait.

Mon, 02/04/2013 - 08:31 | 3212810 ATM
ATM's picture

Germany has shoved massive amnounts of money into renewables and intends to shove even more. No doubt to enrich and empower the people that Farage despises.

Sun, 02/03/2013 - 22:48 | 3212292 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

The climate is always changing......... Been doing it since day 1 and will continue until the planet no longer exists. It is lazy use of language for nefarious reasons.

Sun, 02/03/2013 - 15:37 | 3211406 schatzi
schatzi's picture

Good post. Whilst electricity prices may be a signal for waning demand, in this instance it isn't as the German energy market combined with subsidies is undergoing a radical transformation.

Sun, 02/03/2013 - 15:52 | 3211442 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

F*ck, more deflationary pressure, Internet, energy, trade...

Sun, 02/03/2013 - 15:57 | 3211457 Mountainview
Mountainview's picture

Germans continue to feed their subsidized green electricity into the grid---disturbing market forces,like the ECB does with interest rates--long live the Soviet Union of Europe...

Sun, 02/03/2013 - 19:39 | 3211922 Seer
Seer's picture

"disturbing market forces"

Would those be what they are if not for govts routing out locals (right or ways) and paving roads, channeling rivers etc, so that these "market forces" could get their products to market?

I'm NOT defending govt activities.

Because there is almost nothing that we do that is truly sustainable EVERYTHING is a subsidy.

Those "market forces" are going to crash and burn when cheap energy/fossil fuels go away: who doesn't get what Afghanistan and Iraq were all about? (ALL WARS ARE ABOUT RESOURCES)

So, when the markets crash (recall that these non-disturbed markets are all algo-driven for short-term profits) what energy would there be?

One "word:" Enron

That the Germans elected to invest in energy collection (it's not generation- one cannot "generate" energy, it can only be liberated/altered/re-formed) is totally their call.

Sun, 02/03/2013 - 16:08 | 3211462 AGoldhamster
AGoldhamster's picture

It is a fact - I live nearby. There have been strong winds recently in the north of Germany and in the follow up prices collapsed.

An interesting side effect was that their electricity net was close to collapsing (think of overtraffic) and they had to buy energy from Austria to keep the south afloat, while Austria bought cheap wind energy.

I'm a fan of Tyler - but in this case the article unfortunately is clearly misleading based on wrong conclusions based on wrong facts. BTW this was also in the local news last week.

At least the last spike south is based on that oversupply. Possibly though not everything what happened before last week. Although it is known as a fact since weeks and months that there is a bottleneck - too much renewable energy in the north, with which the energy net has trouble to deal with.

Sun, 02/03/2013 - 19:46 | 3211933 Seer
Seer's picture

This is a good demonstration of distribution issues.  This is the case with ALL energy, from oil and coal to natural gas.  Everything is set up with distribution hubs feeding/supplying defined regions.  Of course, like anything else that is BIG, there are also BIG problems lurking, and when there are failures it is BIG.  But... the "markets" need this activity in order to keep churning (ponder how big trucking is).

Sun, 02/03/2013 - 22:23 | 3212209 orez65
orez65's picture

"Increasing German renewable power ..."

This is total bull shit.

German solar power installations don't produce any electricity in the winter due to cloud cover.

Their financial minister has stated that solar power subsidies are bankrupting their government!

Solar panels in Germany is like growing pineapples in Alaska.

The fact about windpower is that you get no power when the wind stops blowing or decreases below min sustainable speed.

Renewable power is a fucking scam, assholes!

Sun, 02/03/2013 - 22:52 | 3212308 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I believe it is no more than about 10% of the total capacity of any power grid should run on green energy like solar and wind. Anything more than that will have a destabilizing effect when the wind don't blow and the sun don't shine.

Sun, 02/03/2013 - 15:44 | 3211422 ekm
ekm's picture

It's about replacement of the source. It's irrelevant how electricity is produced.

ZH article is talking about demand.

Sun, 02/03/2013 - 15:55 | 3211439 Aurora Ex Machina
Aurora Ex Machina's picture

If you're exporting your glut to other markets [next door neighbours] then future price drops as well.

These are futures, no?

The forward price (or sometimes forward rate) is the agreed upon price of an asset in a forward contract. Using the rational pricing assumption, for a forward contract on an underlying asset that is tradeable, we can express the forward price in terms of the spot price and any dividends etc. For forwards on non-tradeables, pricing the forward may be a complex task.[wiki]


Instead of junking me, and making an easy "derp derp climate change hoax" jab, try explain your reasoning?

Sun, 02/03/2013 - 16:31 | 3211536 ekm
ekm's picture

European countries export and import simultaneusly with each other.

When Germany shutdown the nukes, it became a net importer from France's nukes


Sun, 02/03/2013 - 16:46 | 3211562 Aurora Ex Machina
Aurora Ex Machina's picture

Yes, you're correct: that was the imagined fear back in 2011. [Speigel April 4th 2011]

Since then Germany has invested heavily:

PV plants produced 19.5 TWh electricity in 2011. This is an increase of 65% compared to 2010. The share of solar energy of the gross power generation was 3.2%. In 2011 PV produced more energy than hydro power for the first time. Wind turbines produced 46.5 TWh in 2011 and increased their production by 23% compared to 2010. The share of wind energy of the gross power generation was 7.6%. Wind energy is the strongest renewable energy source in Germany. [source]

Chancellor Angela Merkel is planning to build offshore wind farms that will cover an area six times the size of New York City and erect power lines that could stretch from London to Baghdad. The program will cost 200 billion euros ($263 billion), about 8 percent of the country’s gross domestic product in 2011, according to the DIW economic institute in Berlin. [Bloomberg, March 2012]


Feb 3rd 2013 - Current snap-shot of German wind power.

So, the percentage of Germany’s electricity coming from wind peaked at about 43%. Not bad, however let’s try projecting wind power into the future. Currently Germany is getting 8% of its power from wind. Let’s say we wanted to push that up to 20%. In this future scenario German wind production at 2 am this morning would have been almost 10% higher than total demand. So, a way of storing this power is going to be needed to get past 20% without significant problem, be it batteries or building a large number of inter-connectors to Norway to use their hydro plants as batteries. Germany could, for a while, just export the power. However their eastern neighbours are currently not so enthralled at the prospect.



So, can you come back to me with figures on how much a shortfall this project has reached in Jan 2013? Seems to me you're running on out-of-date info?


Here's the important take-away:

Despite the furore of the dramatic policy reversal post-Fukushima, nuclear still provides more electricity in Germany than wind and solar put together, adding up to 16% in total (down from 17.7% in 2011). Nuclear generated 108TWh in 2011, and this fell to 99TWh in 2012. It will fall further in years to come, and nuclear is due to be phased out completely by 2022.[source 15th Jan 2013]


Aka, your assumptions are incorrect about it "being switched off, and France importing". It didn't happen.

Sun, 02/03/2013 - 17:02 | 3211620 Mountainview
Mountainview's picture

And the Germans subsidize their green energy, rigging the market.. and exporting even to Switzerland, undercutting the Swiss Hydroelectricity prices...a joke...

Sun, 02/03/2013 - 18:15 | 3211746 Aurora Ex Machina
Aurora Ex Machina's picture

That's an entirely different argument.


I merely showed how factually incorrect her/his position was; that is all.

Sun, 02/03/2013 - 18:14 | 3211743 ekm
ekm's picture

The reason we read zerohedge is because we believe NOTHING of what the gov of the gov owned media tell us.

Sun, 02/03/2013 - 18:19 | 3211750 Aurora Ex Machina
Aurora Ex Machina's picture

That's great.

The problem is, the link you're touting yourself agrees with the totals I quoted on nuclear power, and both disprove your point. Specifically: " Nuclear generated 108TWh in 2011, and this fell to 99TWh in 2012."


My first junk for you, for not even understanding what you're linking to.



Sun, 02/03/2013 - 16:35 | 3211546 ekm
ekm's picture


Link offered by THIRDWORLDDUDE at the very bottom.

Media is media. Right now climate change is the topic. I never junk anybody.

Sun, 02/03/2013 - 18:14 | 3211744 Stares straight...
Stares straight ahead's picture

I junked you for never junking anybody. Otherwise, I find you to be a respectable fellow.

Sun, 02/03/2013 - 18:26 | 3211767 Aurora Ex Machina
Aurora Ex Machina's picture

From your source:

Germany's electricity production in 2011 was 629 billion kWh (TWh) gross, with consumption about 6400 kWh per capita. In 2011 this dropped to 614.5 TWh, with coal providing 278 TWh (45%, more than half being lignite), nuclear 108 TWh (17.5%), gas 84 TWh (13.7%), biofuels & waste 43.6 TWh (7.1%), wind 46.5 TWh (7.6%), hydro 24.6 TWh (4%), solar 19 TWh (3%). Electricity exports exceeded imports by about 4 TWh, compared with 15 TWh in 2010, but Germany is one of the biggest importers of gas, coal and oil worldwide, and has few domestic resources apart from lignite and renewables (but see later section).


The loss is about 9 TWh to the end of 2012. Nuclear is heavily subsidised, and always has been, and you're moaning about the loss of 9 TWh, when coal still provides 287 TWh.


These are not the droids you're looking for, unless you're being paid by said industry.

Sun, 02/03/2013 - 23:58 | 3212481 ekm
ekm's picture

I told you.
All data is fucked up due to 'global warming' lunatics.

Sun, 02/03/2013 - 16:47 | 3211576 Stockmonger
Stockmonger's picture

ZH chart is talking about price.  ZH is blaming demand, but renewable supply is probably the culprit.

Sun, 02/03/2013 - 15:46 | 3211430 Piranhanoia
Piranhanoia's picture

Electricity lives in my pants

it's the juice that makes me dance

I give off a spark

that lights up the dark

during sex I can power up France

Sun, 02/03/2013 - 15:47 | 3211433 deejo
deejo's picture

1.21 jiggawatts!

Sun, 02/03/2013 - 19:52 | 3211943 Midas
Midas's picture

So you think they are running a Mr. Fusion?

Sun, 02/03/2013 - 15:53 | 3211446 GreatUncle
GreatUncle's picture

When the demand has reduced enough and volume drops guess what happens next?


This certainty of profitabilitiy maintains the share price - A DEAD CERT on a return = a needed item and just like food and water.

Now how to raise the price without people getting angry on a globally traded visible market? Put it on the infrastructure to supply the enenrgy is the excuse I anticipate.

All part of the slow motion train wreck of an industrial society that may produce tonnes but has little to no demand through affordabilitiy. 

Sun, 02/03/2013 - 19:58 | 3211952 Seer
Seer's picture

"All part of the slow motion train wreck of an industrial society that may produce tonnes but has little to no demand through affordabilitiy. "


"Affordability" ultimately comes down to opportunity cost and EROEI.  These are factors that tip the scales: sure, there are some that can just wing it, but eventually the surplus that allows them to wing it dissipates and they're left to adjust (or die).

What you effectively stated is what I've been warning about for quite some time: Economies of Scale in Reverse.  I think that the problem of not being able to increase prices to maintain profitability is forcing the hands of various govts to step in in order to keep things from total collapse (though the inevitable cannot be stopped).

Sun, 02/03/2013 - 15:55 | 3211451 Anglo Hondo
Anglo Hondo's picture

Germany is buying electricity from France.  Check out the figures for nuclear supply in France.  UK and Netherlands (and Belgium) also get power from France at heavy-load times.

Germany is busy building coal-fired generation at the present time.


Sun, 02/03/2013 - 16:18 | 3211507 css1971
css1971's picture

Reducing supply would push the price up not down.

Sun, 02/03/2013 - 20:02 | 3211965 Seer
Seer's picture

Many countries bring in energy/power from neighboring countries because those neighbors have a closer distribution point.  This could hold true for Germany (though for the UK and Netherlands it's a different story).  Happens in the US with Canadian natural gas lines coming in to the States and serving regions just across the border.

Sun, 02/03/2013 - 16:00 | 3211467 rogeliokh
rogeliokh's picture

Cheap source of Alternative Fart Energy, don't try this at home :)))

Sun, 02/03/2013 - 16:16 | 3211500 Black Markets
Black Markets's picture

Q: What the fuck does the price of the DAX have to do with German domestic economic growth?

A: Just about fuck all.

Also, for 99% of businesses electricity is an INPUT COST. If it gets cheaper IT'S GOOD FOR THE ECONOMY. It leads to MORE OUTPUT.

Yet more fucking clueless garbage, where are all the real journalists?

Sun, 02/03/2013 - 17:44 | 3211697 HoaX
HoaX's picture

Besides the fact they spent the past 10 years or so investing in renewable energy sources, and are now at the point of becoming net exporters. So yeah, this article is fuckin garbage to put it bluntly.

Sun, 02/03/2013 - 20:07 | 3211975 Seer
Seer's picture

" If it gets cheaper IT'S GOOD FOR THE ECONOMY. It leads to MORE OUTPUT."

Perhaps in the world that you've known up until now, but in the future, when people have NO capacity to consume vast amounts of consumerist stuff (because they're dead broke NOW and they have very few prospects of getting out of debt), it will matter very little what the "price" of energy is.  I'll further add that as volume drops (due to people cutting back) this will place further pressures on cost-per-unit-of-energy as under-utilization of plants and equipment cancel out any previous "cheaper" actions.  Again, Economies of Scale in Reverse is going to be a bitch, and more people need to start getting this concept else they'll continue to wonder why the fuck all their indicators are failing to identify what is wrong.

Sun, 02/03/2013 - 16:18 | 3211501 q99x2
q99x2's picture

Bernanke put 600 billion in my bank account and I'd have the stock market roaring too.

I know someone that looks like Merkel. She takes ambient to sleep.

Sun, 02/03/2013 - 17:11 | 3211636 hooligan2009
hooligan2009's picture

is the basset hound called Angela as well? :>)

Sun, 02/03/2013 - 16:41 | 3211509 Glass Seagull
Glass Seagull's picture

I cut my teeth on a power trading floor and I'd like to make a few points:

1) power prices can be manipulated, as liquidity is sinfully low and lots of deals are OTC struck

2) if this price is a heat rate type index (rational price w/ natgas price as denominator) this would explain some weakness...I just don't know what index this is. If this is not a heat rate referencing index, yes, forward power does look like it has weak demand, but could also be expectations for future mild weather in Alemania.

Just putting that out there, fwiw.

Sun, 02/03/2013 - 16:24 | 3211516 walküre
walküre's picture

That's shocking. WTF? The political class is lying to us whenever they're opening their mouths. There's German efficiency and then there's plain and simple German ignorance and stupidity. The economy cannot be roaring in the face of declining electrical consumption.

Merkel, you're a fucking liar. Europe is NOT fixed. They all deserve what is coming at them and NOTHING less. Off with their heads.

Sun, 02/03/2013 - 16:32 | 3211537 mind_imminst
mind_imminst's picture

Also, in the information-based economy, one can generate more GDP with less electricity. Electricity consumption still matters of course, but it is not as good of a metric as it used to be back in the heavy-industrial days.

Sun, 02/03/2013 - 17:47 | 3211700 forwardho
forwardho's picture


Remember that somewhere, someone has to PRODUCE something of VALUE.

If nothing is being produced anywhere, much less power will be used.

Is that a win-win?

Sun, 02/03/2013 - 20:21 | 3211991 Seer
Seer's picture

"Remember that somewhere, someone has to PRODUCE something of VALUE."


And, in order to produce one must have PHYSICAL resources, very few of which tend to be in abundant supply these days (and growth would only hasten their depletion).

The very notion of GDP is insane.  In the Philippines (I don't know about other places, but I suspect it's similar- most everyone's financial class was trained in Western skulduggery) remittances make up roughly 10% of their Gross DOMESTIC Product!  I (somewhat) wonder whether that same production is represented in the countries of which the foreign workers were working...

Sun, 02/03/2013 - 16:34 | 3211541 Racer
Racer's picture

I wish my electricity bills were just even on a flat line or even just slightly rising or even keeping pace with inflation (the fake or real rate)

As it is, at least 10% increase a year is now the norm  :(

Sun, 02/03/2013 - 17:13 | 3211611 rogeliokh
rogeliokh's picture

You ever saw after storm effect like on East Coats? American cardboard Houses Domino effect? Those American Home Builders should be ashamed of themselves, Building those crappy houses from 2x4, thin plywood, installation sheet rock and siding.. Those houses probably worth 40-50k at most material-wise and getting sold for $400-500k. Cardboard houses. That's is why your are paying TOP bill for electricity. It's all design to rip-off as much as possible, whatever it is Electric bill, rebuild, replace and so on.. And this supposed to be an American Dream? Live in the cardboard house made from from large screen Sony TV empty boxes?

Sun, 02/03/2013 - 18:01 | 3211722 eddiebe
eddiebe's picture

addme, it's a race to the bottom in the USA. Capitalism in the truest sense means money above all, so however those with the most can get more they will do it without consideration to resources, environment or loss even of life as long as it's not their own. It's a dream allright: A nightmare.

Sun, 02/03/2013 - 20:46 | 3212044 Seer
Seer's picture

Water is the most destructive force on the planet!  I've seen railroad tracks turned to pretzels.  How in the fuck are you going to build homes that can manage against that?

"Those houses probably worth 40-50k at most material-wise and getting sold for $400-500k."

Or perhaps there's $200k to $300k worth of materials?  Further, would you want us to raze all the forests of the world in order to obtain more wood cheaper? and THEN when they're all gone? (or, build primarily with concrete, which requires vast amounts of energy to produce, in addition to lots of open gravel pit operations)

People VASTLY underestimate the labor and energy costs in construction.  I've been watching a neighbor down the road have her house moved on to a new foundation.  It's been four months or so.  And it's been local folks doing the work (using sufficient amounts of heavy equipment), no corporate-level "screw the masses" kind of folks.

"It's all design to rip-off as much as possible, whatever it is Electric bill, rebuild, replace and so on.."

Homes today are vastly more efficient than those of previous years- FACT.  The PROBLEM is that there is WAY more energy consuming devices installed in these homes.  Once upon a time a 100amp service panel was a LOT; now 200amp is pretty much the base.

When talking about materials and energy consumption for heating and cooling nearly all has to do not with the structural materials but with the insulation (and reduction in thermal conduction).

I spent MANY years researching building construction as I was going to build my own home.  I was going to build a "strawbale" home.  According your your cardboard comment one could say that straw is just a step up from cardboard; yet, I'd put one up against any other home for energy efficiency.  I would NOT, however, build such a structure anywhere near where there could be tidal surges.  And here is one of the BIG reasons why housing construction is compromised: BIG builders applying a more "uniform" construction practice (materials) across the country.

If you want "strong" then build with concrete.  Good luck affording it.  And, concrete (unless using ICF) will sweat: I'm also not convinced after all of my research that it's necessarily a good insulator/heat sink, as it can also be a cold sink (and conduct back to the ground).

"And this supposed to be an American Dream? Live in the cardboard house made from from large screen Sony TV empty boxes?"

You need to see what others around the globe live in.  My wife told me when I told here that I didn't want to live in a cheap home that the home we're in (and was considering) isn't cheap, that "a cardboard box is cheap!"  She's from the Philippines (and she doesn't have the typical Westerner entitlement attitude).  NOTE: I opted for a very "cheap" home because it was less expensive, AND, it is a great set up for passive solar, which cuts my energy input costs (though I heat with wood, it still COSTS- my labor and tools).

Don't like the new homes?  Don't buy.  Lots of "used" ones out there.  And one can also build one's home.  Yeah, nothing's easy, but no one said life would be (except this stupid "American Dream" marketing BS).

I do NOT work for the construction/building industry, nor the real estate industry.  I just feel that I have a pretty good grasp of housing construction and energy use: two very interesting topics.

Sun, 02/03/2013 - 22:58 | 3212328 Acet
Acet's picture

In most of Europe houses are made of brick, double walled with foam insulation in the middle in cold countries. Nobody makes houses with wood or concrete (I supposed the latter might be used if you're making a bunker).

I suspect the grandparent comment comes from that. To anybody in Europe, the wooden construction of American houses just sounds crazy.


Sun, 02/03/2013 - 23:14 | 3212381 Seer
Seer's picture

Do they use rebar to stabilize the brick?  Steel isn't cheap.

Anyway, nothing wrong with wood.  Lots of log homes out there: I researched on thermal properties of these and am as confused as I ever was.  Still no match for lots of water: one need only see raging rivers carrying entire HUGE trees down the currents to understand this.

With strawbale one could construct the majority of the home using natural materials- no "foam" required.  I even went so far as to research different flooring, even "dirt" floors (sealed with linseed oil, ugh).  Roofs, trussing, is not so easy.  Biggest killer is labor (plastering the walls).

I was stunned to see how much concrete/cement they use in Manila.  Guess that this is par for the course when you have an environment like that and you've wiped out most of your trees: my wife's mother's place, however, had lots of wood from coconut trees.

Lots of good building stuff originates in Europe.  I really like PEX (type A), though it's another far-from-natural material.

Mon, 02/04/2013 - 05:45 | 3212446 Acet
Acet's picture

I'm not really all that knowledgeable in that domain, so I'll just tell you what I remember from seeing houses being built:

- The bricks are joined with cement

- Cement pilars are placed in points like corners for structural strength. These pillars are built around a cage made out of steel. The brick walls are built between the pillars.

- For more than one storie high houses, the floors of the upper levels are pre-fabricates cement on a grid steel frame plaques which are supported by the pillars.


I remember seeing a program about strawbale construction and it looked complicated (plus it makes for really thick walls).

Sun, 02/03/2013 - 17:38 | 3211681 forwardho
forwardho's picture

" of course your electricity bill will necessarily sky rocket "

My favorite B.O. quote.


Sun, 02/03/2013 - 16:58 | 3211606 firstdivision
firstdivision's picture

Yes, but how has spot prices been, and the MWh demand?  

This is almost as funny as when the PJM 12 month fwds were pulled way up while spot was low 30's.  Spot hasn't moved much.

Sun, 02/03/2013 - 17:10 | 3211635 Catflappo
Catflappo's picture

I guess she is recharging her vibrator far less frequently than before?

Sun, 02/03/2013 - 17:18 | 3211647 Herdee
Herdee's picture

No,Germany didn't just switch to L.E.D. lighting in order to save on energy.Ford just wrote off a cool couple of billion on its European operations.The ongoing depression is entering Germany bigtime.Better suck more money out of the FED,you're going to need it Germany.(you can't have all your gold back but we'll give you lots of crappy paper instead)

Sun, 02/03/2013 - 17:33 | 3211667 forwardho
forwardho's picture

I left my gold on NY and all I got was this crappy paper.

Remember, You can neither eat, nor wipe your ass with gold.

Sun, 02/03/2013 - 20:49 | 3212046 Seer
Seer's picture

"nor wipe your ass with gold."

Well... you "could."  Just wouldn't be very effective.  And, I wouldn't care to try, let alone watch anyone else trying.  To each their own Butt I suppose...

Sun, 02/03/2013 - 17:28 | 3211663 eddiebe
eddiebe's picture

Kudos to Germany for going green!

Sun, 02/03/2013 - 17:40 | 3211687 HoaX
HoaX's picture

One word, Energiewende.

Fuck Fossil.

Sun, 02/03/2013 - 19:06 | 3211848 orangegeek
orangegeek's picture

The Germans work with the lights out and use night vision goggles.


Kartoffel und Schnitzel, bitte.

Sun, 02/03/2013 - 19:55 | 3211949 Anonymouse
Anonymouse's picture

The Germans all have been issued wool pants and are busily dragging their feet on the carpets.  Energy problems -- solved!

Sun, 02/03/2013 - 20:51 | 3212047 Seer
Seer's picture

"and are busily dragging their feet on the carpets."

I had a slight delay in processing this- FUNNY!

Sun, 02/03/2013 - 22:30 | 3212226 MrSteve
MrSteve's picture

Get smart! see the facts on German energy markets and make your own conclusions- some of these comments are beyond and /or beneath "stupid".

Sun, 02/03/2013 - 22:34 | 3212244 Seer
Seer's picture

Not sure whether you're addressing me, but, I'd rather be wise than "smart."

I'm not judging Germany's energy situation, I really don't care.  BUT... when everyone was cheer-leading that Germany was an economic power that wouldn't suffer like all the others I was challenging folks (saying that as a big exporting nation they were going to be in trouble with a contracting global economy).

Lots of things not looking as growth-producing for Germany...


Question of Aiding Cyprus Places Germany in a Bind

Sun, 02/03/2013 - 23:44 | 3212454 Seer
Seer's picture
Goldman Sachs Reduces 2013 Forecast for U.K. Gas Price by 19%

Economic weakness in Europe will carry over into 2013, dragging down gas demand for power generation, the report said. This may lead to a wider spread of minus 14.4 pence for spot-to- oil indexed gas prices this year, with the U.K. NBP price forecast at 59.7 pence, compared with an oil-indexed proxy of 74.1 pence, the report said.

Goldman Sachs cut its forecast for northwest Europe’s gas demand this year to 302 billion cubic meters from its original projection of 321 billion cubic meters. The region’s gas needs may rise to 304 billion cubic meters in 2014, the report said.

And once again it'll be "next year things will be better!"  I'm thinking that somewhere along the line margins are going to be further stressed.  If the rosy picture for 2014 doesn't materialize?

Mon, 02/04/2013 - 03:23 | 3212659 dunce
dunce's picture

German are buying wood stoves for home heating and stealing wood  from publicly owned forest because of the high cost of power. Of course the govt. can impose controls to reduce if not stop this but will they let them freeze? No analysis is complete without cost data.

Mon, 02/04/2013 - 09:34 | 3212922 Grand Supercycle
Grand Supercycle's picture

Get Ready Bears...

Wile E. Coyote overdue sell off awaits as SPX daily & weekly charts continue their protracted topping process from current
extreme levels.

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