Market Round Up: Climate Change or be Doomed 🌍  Ciao Italia 🙊

by | 9 Oct, 2018

 

1. Climate change or be doomed

This is a warning. We are going to wreck our planet unless we change our unquenchable habit to buy stuff – any stuff. That’s the expert opinion of the Intergovernmental Panel on Climate Change (IPCC) which published its report, yesterday, cautioning that keeping rising temperatures below the globally agreed 1.5 degrees C is now completely off the tracks, and heading towards a 3C rise.

The cost of saving Earth will be astronomical. But, despite ensuring the continued existence of mankind and our societies, such an investment should also be looked at as an economic and employment boon.

The way we manage land, use transport and consume everything from food to clothing apparel will need to change. Put simply, our impulse to buy yet another t-shirt or pair of shoes (because they are cheap) needs to be reversed. Instead of hunting for bargains, we need to ask for quality. This means wearing that pair of jeans not just once, but maybe for a few years. Or eating a meal from local and sustainable sources, rather than the $2 dollar chicken from a discount supermarket stuffed full of antibiotics. It means that rather than businesses racing each other to the bottom in terms of costs, they satisfy a new demand for sustainable and quality driven goods. This will mean investing in better quality materials, hiring and training more skilled people and re-using waste.

The good news is that politicians are finally listening. Furthermore, the Nobel prize for economics was won by two Americans working on climate change and the role of governments in boosting sustainable growth. The Royal Swedish Academy of Sciences awarded William Nordhaus and Paul Romer the prize for their research into the most “basic and pressing” economic issues of the age.

Clearly it’s time to listen up and see this as an opportunity to re-set our life support machine. Less is More is the new vogue!

 

2. Ciao Italia

Signs of frustration are growing in Italy with the latest spat coming from deputy Prime Minister Matteo Salvini accusing Brussels technocrats of being “enemies of Europe”, and triggering a sell-off of bonds and stocks.

Investors worried about the deepening friction between Rome and the European Union’s views about the country’s budget plans is also putting the euro under pressure, reaching a seven-week low against the US dollar. The stock market index is down 2.4%. Meanwhile yields on ten-year Italian bonds (bundles of government debt) rose to a four and a half year high, making it even more expensive for Romans to borrow money.

The European Commission has told Italy it is concerned about its budget deficit plan breaching European rules on government borrowing. But Rome insists it will not retreat from its spending strategy.

It will be interesting to see if federal Brussels will allow Italy to set its own destiny, or come down hard on a nation struggling to revive its economy. As the old Latin adage goes, “Si vis pacem, para bellum”, or “the strength of a nation derives from the integrity of the home”. In bocca al lupo!

Related: Market Round Up: Clouds over Italy ☁ – Crisis week for EMs 🙊

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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