Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
California's Last Nuclear Plant Is Closing, Edged Out by Renewables (Bloomberg) Economics have achieved what environmentalists have sought for years: the shutdown of California's nuclear power plants. PG&E Corp. is proposing to close two reactors at Diablo Canyon in a decade that would end up costing more to keep alive as California expands its use of renewable energy, Chief Executive Officer Tony Earley said Tuesday. They won't be needed after 2025 as wind and solar costs decline and electricity from the reactors becomes increasingly expensive, he said. The plants provide nearly 10% of California's electricity. Econintersect: The plants began operation in 1985 and 1986, so they will be near the normal end-of-life for nuclear plants (40 years) by 2025. Their current licenses expire in 2029. See also next article.
Cost to Replace California Nuclear With Solar: $15 Billion (Bloomberg) PG&E Corp.'s plan to shut California's last nuclear power plant by 2025 would cost $15 billion if all its output is replaced with solar-generated electricity at current prices, according to Bloomberg Intelligence analysts. The company says that Bloomberg has not evaluated all the costs. According to PG&E chief executive officer, Tony Earley:
"It's going to cost less overall as a total package than if you just continued to operate Diablo Canyon. It's going to operate less because of the energy policies that are in place."
House erupts as GOP tries to halt Dems' sit-in (The Hill) The House erupted into deafening shouts as Republicans attempted to end Democrats' sit-in on the floor with a vote unrelated to gun control. Democrats began commandeering the House floor around 11:25 a.m. and vowed to press on until GOP leaders scheduled votes on bills to prevent terror suspects from buying guns and expand background checks. Shortly after 10 p.m., Republicans called an unrelated vote to override President Obama's veto of a measure disapproving of the Labor Department's fiduciary rule. But the Dems continued to keep the chamber in chaos.
Pound Reaches Highest Level of 2016 Hours Before Brexit Voting (Bloomberg) The forex market is voting 'remain', with conviction. See the huge gap up in the chart below. The pound reached the strongest level this year hours before the landmark U.K. vote on membership of the European Union was set to begin. A gauge of sterling against a basket of currencies advanced for a second day before Thursday's referendum after a Comres poll showed 48% "Remain" and 42% "Leave," while a YouGov survey indicated backing for a vote to stay was ahead 51% to 49%. The pound strengthened against all 31 of its major counterparts. Voting booths open at 7 a.m. London time.
Inequality in Germany: How it differs from the US (Voxeu.org) Income inequality is less severe in Germany than in the US. Part of this is due to CEO pay in the US growing faster than in Germany. This column offers some novel explanations for these observations. From the mid-1990s, Germany began offshoring managerial tasks to Eastern Europe, reducing demand for German managers. In addition Germany offshored skill-intensive jobs to Eastern Europe, reducing the skill premium.
Here Is Why One Credit Rating Agency Believes Russia Is Safer Than The US (Zero Hedge) If posed with the question who has the better credit rating, the United States or Russia, most people would presumably pick the United States. However, that is not the case for Dagong Global Credit Rating Co, one of the three biggest credit rating companies in China. Started in 1994 as a privately held company, Dagong isn't formally tied to the Chinese government, and as Bloombergreports, began sovereign rating services in 2010 in an effort to break the monopoly of US rating firms. Guan Jianzhong, the firm's chairman said that the firm provides ratings for more than 110 countries, and tries to strip away political bias when assessing sovereign risk. For how the higher credit rating relates to bond yields (it doesn't in this case), see graphs below.
As far as the ability of the US to simply print more money, Guan says that's actually one of the reasons the US is risky: "someone may think that the US could print more money because US dollars are accepted internationally. But that's why they can have risks more easily, because they are transforming bad loans to the whole world."
For good measure, Guan points out what many already think: "In the western countries, they use credit rating as a tool to protect their own profits, their own interests. And that's why we see in 2008 the financial crisis is partially because of a credit crisis, because the wrong credit rating was used."
Japanese Workers Really Distrust Their Employers (Bloomberg) Lifetime employment sounds like a great thing, but not if you hate where you work. That seems to be the plight of Japanese "salarymen" and "office ladies." Only 22% of Japanese workers have "a great deal of trust" in their employers, which is way below the average of eight countries surveyed, according to a new report by EY, the global accounting and consulting firm formerly known as Ernst & Young. And it's not just the companies: Those employees are no more trusting of their bosses or colleagues, the study found. By contrast, about two-thirds of workers in India and Mexico had a great deal of trust in their employers (see chart).
U.S. warns China against provocations once court rules on sea claims (Reuters) The United States warned China on Wednesday against taking "additional provocative actions" following an impending international court ruling on the South China Sea that is expected to largely reject Beijing's broad territorial claims. A senior State Department official voiced skepticism at China's claim that dozens of countries backed its position in a case the Philippines has brought against Beijing and vowed that Washington would uphold U.S. defense commitments.
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