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Yet Another Exponential Chart... And A Different Spin On "Keynesianism"

Tyler Durden's picture


In our daily scouring of the markets we run across a plethora of charts, many of them boring, some interesting, and a few select ones, exponential, and thus completely unsustainable. The US debt load is of course one of them, global central bank assets is another, as is pretty much everything associated with Europe these days. However, the following exponential chart is one we had never encountered before: it shows the number of major "disturbances", read power outages, in America's power grid in the last decade. The chart is, well, disturbing.

So with fiscal stimulus to fund social projects as one of the core tenets of neo-classical economics, or at least such being its interpretation in Washington, D.C., and New York Times newsroom of course, one wonders if perhaps this is not one of those occasions where it would make sense to incur the social cost to fund infrastructure developments upgrading America's dilapidated power system.

We would be merrily on our way with such blasphemous thoughts until we looked at another chart, this time one showing the "real victims" of power outages, where to our absolute lack of surprise, we find that by far the biggest beneficiary of an operating power system are US Brokerage operations, for whom every hour in power grid downtime results in a cost of a whopping $6.5 million.

Which then begs the question: since brokers, read High Frequency Traders, investment banks, and other operations that require copious amounts of electricity to run "arbitrage" and other "sensitive" information driven profitability schemes on a millisecond basis, are the ones benefitting the most from a well-greased power grid, should it be the onus of Joe Sixpack, in the form of yet more indebtedness, to fund a system whose benefits are so disproportionately skewed to the benefit of one specific class of consumers.

Perhaps it is the banks, who are so very reliant on an up to date electrical utility system, that should be the ones funding on a pro-rata basis in terms of benefits, or well over half, the modernization of such facilities. After all, following the mass bailout of all banks, these entities are already, pardon the pan, utilities themsleves... or at least would be if the bailouts had been executed properly, and any excess profits were solely to the benefit of those who provided the bailout cash in the first place: those who are now asked to fund infrastructure overhauls as well.

Naturally the same logic could be applied to all other aspects of the aging US infrastructure: perhaps instead of everyone paying for something which benefits abrnomally a select few, it is those who extract the most externalities out of these societal programs should be the ones paying for their upkeep?

Just a thought.

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Thu, 04/19/2012 - 20:01 | 2359899 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Powerdown, bitchez

Thu, 04/19/2012 - 20:06 | 2359908 PersonalRespons...
PersonalResponsibility's picture

Reboot, bitchez

Thu, 04/19/2012 - 20:08 | 2359914 i-dog
i-dog's picture

Darkness, bitchezz!

Thu, 04/19/2012 - 20:17 | 2359932 Unprepared
Unprepared's picture

Electron, meet Exponent

Thu, 04/19/2012 - 20:55 | 2360009 AldousHuxley
AldousHuxley's picture

enron energy traders are still out there.




John Arnold, a former energy trader at Enron Corp.  who now heads up the Centaurus Energy hedge fund, not only made his inaugural appearance on the 2007 Forbes' list of the 400 richest Americans

Thu, 04/19/2012 - 21:02 | 2360020 Caviar Emptor
Caviar Emptor's picture

Enron was the Zen expression of the final chapter of the American Dream....

Thu, 04/19/2012 - 21:23 | 2360049 withnmeans
withnmeans's picture

Hmm, stands to reason "the last 10 year boom in power outages". Its been 11 years since I was in charge of a Public Power Electrical System, we had very few outages when I was in the biz.

Oh well, all good things must come to pass.

Thu, 04/19/2012 - 21:27 | 2360055 slewie the pi rat
slewie the pi rat's picture

Princess Scum

Cruise ship 'ignored Panama castaways'

Two of the three Panamanians on board the disabled vessel later died.



Fri, 04/20/2012 - 16:44 | 2362337 Likstane
Likstane's picture


Fri, 04/20/2012 - 01:00 | 2360364 boogerbently
boogerbently's picture


While we're all feeling impotent to induce any changes in the "rigged" system, all that's needed to inflict damage where damage is due is a "power outage"???

Let's "OCCUPY" some electric substations!

Fri, 04/20/2012 - 07:45 | 2360600 Element
Element's picture

The rise of the 'Smart'-Grid bitchez.

Thu, 04/19/2012 - 22:17 | 2360164 DaveyJones
DaveyJones's picture

that was deep

Fri, 04/20/2012 - 02:53 | 2360435 vast-dom
vast-dom's picture

Or HFT operations time their moves according to inside information on schedule of power outages such that they gain even greater advantage over select forced low volume more at no volume power outted sectors. There is certainly a way to invert the HFT trade with outtages.

Thu, 04/19/2012 - 20:10 | 2359916 spiral_eyes
spiral_eyes's picture

A military funded primarily by defense contractors...

Great idea, Tyler.

They can have all the military-Keynesianism they want... cause they're paying!

Thu, 04/19/2012 - 20:13 | 2359925 francis_sawyer
francis_sawyer's picture

How do SEC employees surf for porn if the power is down? This is a national crisis!

Thu, 04/19/2012 - 20:19 | 2359936 Unprepared
Unprepared's picture

The more disturbing question is, how people watched porn before electricity and motion picture?

Thu, 04/19/2012 - 20:42 | 2359984 StormShadow
StormShadow's picture

Well it was 3D porn of course...my how we have regressed as a society, shame really

Thu, 04/19/2012 - 21:42 | 2360087 Bunga Bunga
Bunga Bunga's picture

They had real sex.

Fri, 04/20/2012 - 03:27 | 2360461 Genève Barbegazi
Genève Barbegazi's picture

with that piece of rabbit fur they call their girlfriend...

Thu, 04/19/2012 - 22:56 | 2360232 jeff montanye
jeff montanye's picture

words and imaginations.

Thu, 04/19/2012 - 22:19 | 2360165 Dr. Engali
Dr. Engali's picture

A more important question is how do we read the Hedge if the grid goes down.

Fri, 04/20/2012 - 00:00 | 2360304 wandstrasse
wandstrasse's picture

In Germany we hardly have any power outages - yet -, but first Bundesländer introduced the kill switch.. that is why I am collecting all important books, Griffin, Rothbard, Austrians, Orwell... they will not help me survive physically but maybe mentally.

Thu, 04/19/2012 - 20:16 | 2359931 philipat
philipat's picture

Wish it would happen a nanosecond after some HFT fucktard quote?

Thu, 04/19/2012 - 21:43 | 2360085 Eireann go Brach
Eireann go Brach's picture

Blame Apple products!

Thu, 04/19/2012 - 20:06 | 2359904 blunderdog
blunderdog's picture

   Naturally the same logic could be applied to all other aspects of the aging US infrastructure: perhaps instead of everyone paying for something which benefits abrnomally a select few, it is those who extract the most externalities out of these societal programs should be the ones paying for their upkeep?

Um...that'd be socialism.

Thu, 04/19/2012 - 20:13 | 2359926 spiral_eyes
spiral_eyes's picture

No, that's personal responsibility. You gain from it, you pay for it.

Thu, 04/19/2012 - 22:13 | 2360150 Dr. Engali
Dr. Engali's picture

Socialism ? What the hell? Since when is it socialism to pay your own way?

Fri, 04/20/2012 - 04:12 | 2360485 MrRadiologist
MrRadiologist's picture

Drugs are bad.

Fri, 04/20/2012 - 20:32 | 2362835 TheFourthStooge-ing
TheFourthStooge-ing's picture

...mmm kay.


Fri, 04/20/2012 - 18:43 | 2362637 blunderdog
blunderdog's picture

It would be taxing businesses to pay for things that would also benefit individuals.

It was sarcasm, but I understand the confusion.  We have been told for decades that taxing businesses to pay for any shared-resource that benefits individuals is socialism. 

I was trying to play along.

Thu, 04/19/2012 - 20:06 | 2359907 tom a taxpayer
tom a taxpayer's picture

Wonder what the Power Outage chart for Japan will look like by the end of summer.

Thu, 04/19/2012 - 20:08 | 2359910 AchtungAffen
AchtungAffen's picture

They shot themselves on the foot... How ironic.

Thu, 04/19/2012 - 20:08 | 2359915 YesWeKahn
YesWeKahn's picture

The end of the world will happen this year 2012. Therefore I am not surprised.

Thu, 04/19/2012 - 20:11 | 2359918 francis_sawyer
francis_sawyer's picture

More wind farms & "Solyandra" ought to fix things... /sarc

Thu, 04/19/2012 - 20:11 | 2359921 Everybodys All ...
Everybodys All American's picture

I'm wondering what impact the auto industry has on the grid as well. I would think they would be huge users of electricity. Then one would have to ask what impact will all those prosposed electrical cars have on the grid. For some reason I'm thinking just like with the health care bill we won't know until it's been written in as law. What a bunch of Nancys.

Thu, 04/19/2012 - 20:11 | 2359923 rosiescenario
rosiescenario's picture

Another way to look at this is to ask, by how much are electric utilities' P&L's being overstated through their under performance of required maintenance?

Thu, 04/19/2012 - 20:14 | 2359928 Cruel Aid
Cruel Aid's picture

I'd get pissed, but this was a known known when the 780 billion tarp went into the banking abyss and a fraction of a percent made it to the shovel.

I remember the flow chart of tarp from Tyler, I think.

'We're fucked' is holding up so far.

Thu, 04/19/2012 - 20:13 | 2359929 chump666
chump666's picture

Obama and his Keynesian loons have funded Wall Street at the expense of...everyone.

And Joe Sixpack and Sally Cigarette get a nice gift...a high oil/pump price.

The seeds of dis-contempt have been sowed and will flourish in spring/summer. 

Thu, 04/19/2012 - 21:12 | 2360036 kridkrid
kridkrid's picture

And manifest how? I'll believe it when I see it.

Thu, 04/19/2012 - 23:06 | 2360249 chump666
chump666's picture

11th hr.

Always is, always will be...like all fading empires. But the way the lunatics at the IMF/EU/ECB/Fed are handling things, a fade out might just be a black out, then chaos.  What i'd be watching in Europe is France, if they blow up first riots etc etc.  It will spread.  That french midget crying about the EURO mths ago saying it will always be strong blah blah blah, now is saying it's 'too strong'  Our leaders are losing control, they look sick and troubled.  Good.

Actually fun to watch. F*ck em all.

Thu, 04/19/2012 - 20:17 | 2359934 i-dog
i-dog's picture


"those who extract the most externalities out of these societal programs should be the ones paying for their upkeep?"

User pays? Well ... that is the concept behind utility bills, where the cost of infrastructure maintenance is allegedly included in the tariff, is it not?

The real issue is: If utilities are overseen by the central planners, then why aren't the "regulators" ensuring adequate maintenance and performance?

Thu, 04/19/2012 - 20:21 | 2359942 nmewn
nmewn's picture

OMG!!!...don't ask questions!!!

They'll just tell you you're too stupid to understand ;-)

Thu, 04/19/2012 - 20:22 | 2359947 Cruel Aid
Cruel Aid's picture

They are overseeing the deactivation of coal plants. Somehow it is going well for them.

Fri, 04/20/2012 - 06:39 | 2360548 skipjack
skipjack's picture

So there really is someone on ZH who believes in the myth of effective regulators ?!?!?  Do you still believe in Santa Clause, too ?

Fri, 04/20/2012 - 07:04 | 2360559 Ghordius
Ghordius's picture

well, I do. If the regulation is smart and short instead of 20'000 pages laws nobody knows how to apply (we'll see then, folks).

The separation of business banking and investment "banking" of glass steagall (30 pages), it worked well for three (lucky) generations. Or the bans on all those derivatives that Clinton scrapped. Or several anti-trust laws that were reasonably well applied in the case of Bell Corp.

Smart & short keeps regulators transparent and honest. It did work, for a time, not perfectly but much better than now.

Thu, 04/19/2012 - 20:18 | 2359935 nmewn
nmewn's picture

Wait a minute...I thought all the "infrastructure" problems got fixed by doing Benny air drops to states for tenured professors & bureaucrats & men working signs...

Thu, 04/19/2012 - 20:38 | 2359976 Dr. Engali
Dr. Engali's picture

Shovel ready jobs weren't so shovel ready.

Barack H. Obummer.

Thu, 04/19/2012 - 20:45 | 2359988 Pure Evil
Pure Evil's picture

They were shovel ready allright, in fact the executive officers over at Solyndra were using bucket loaders to dumb thousands of dollars of filthy lucre into their gold plated dump trucks.

Thu, 04/19/2012 - 20:54 | 2359999 nmewn
nmewn's picture

Run Like Hell boys & girls...


Section 31406 of Senate Bill 1813 (known as MAP-21), calls for “Mandatory Event Data Recorders” to be installed in all new automobiles and legislates for civil penalties to be imposed against individuals for failing to do so.
“Not later than 180 days after the date of enactment of this Act, the Secretary shall revise part 563 of title 49, Code of Federal Regulations, to require, beginning with model year 2015, that new passenger motor vehicles sold in the United States be equipped with an event data recorder that meets the requirements under that part,” states the bill.


Thu, 04/19/2012 - 21:04 | 2360022 Caviar Emptor
Caviar Emptor's picture

Dunno about you, I want my "Events" in the car to be recorded for posterity! Else nobody would believe me...Ba-Da-Bo0m Ba-Da-BiNg!

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