PV panel prices just keep on sliding

This shows the costs of photovoltaic (solar) panels, in constant dollars, from Our World in Data.  In 2024, PV panels cost just 0.2 per cent of what they cost in 1975, and 70% of what they cost in 2020, a compound annual rate of decline of 12%, despite the bounce during and after Covid.  This trend is likely to continue.

Since battery costs are falling even faster than panel costs, solar is getting closer and closer to being able to provide baseload power, as increased storage capacity becomes affordable.   In 2020, solar provided 3.2% of the world's electricity, in 2025 it reached 8.7%, and it seems likely that by 2030, it will be 23.6%, assuming the growth rate of the last 5 years continues.  Given the impact of the Iran war on gas prices outside the US, even this jump may prove too conservative.  

This is the first oil crisis where there is an alternative:  solar plus storage, and EVs.  Repeated oil crises have shown how unwise it is to rely on oil and gas.  The great irony of Trump's war is that it will accelerate the switch from fossil fuels to renewables.  

Covid death rates and the GQP

From a toot by Liam O'Mara

Seems there is a pretty clear correlation between support for #Trumpism and a lack of basic scientific literacy. Whodathunkit?

Has my Oz leading index bottomed?

 I haven't calculated my Ozzie coinciding and leading indices for 3 years.  I had a few personal issues, and just updated the bare basics of my data banks.  But I have at last updated all (more or less) of the time series in my Australia collection, and so I can run my programs to calculate my indices.

First, my coinciding index.  This is designed to track the business cycle.  In a commodity-exporting economy, GDE (Gross Domestic Expenditure) is often a better guide to the state of the economy than GDP, and it's certainly more amenable to policy.  The RBA and the government can influence domestic demand, but they have little power over exports.   (GDE= GDP - exports + imports.)

The chart below shows the de-trended average for GDP and GDE and for my coinciding index.  Both are extreme-adjusted, to help minimise the impact of the Covid crash.  However, as with other economies, the downward spike in early 2020 and the rebound spike in 2021 have been muted, not eliminated.  Note that there was a second covid lockdown in 2021.

I haven't yet determined the dates of the Covid recession, as I need to look at individual time series to pin them down, but you can imagine there's a yellow bar showing a recession starting early in 2020 and ending more or less in mid-2020.

Why do I use my coinciding index as cycle referent, instead of GDE?  Because of the lags involved in quarterly data.  The national accounts are available only until Q1 2023; my coinciding index is calculated until June 2023, and I'll be able to make estimates for July in just a couple of weeks.  (The coinciding and leading indices do not contain quarterly time series)

OK, assuming we accept that my Oz coinciding index is a good guide to the cycle, then we can compare it with my leading index, using my coinciding index as the cycle referent.

I've shown the first chart over a long time period to show that my leading index has a consistent lead of around 6 months to the cycle.  Again, note the distortions in the data caused by Covid.  This chart and the one below it show year-on-year changes, not de-trended data.

This is what it looks like over a shorter period:

The key take-aways from this analysis are:

1.  My Oz coinciding index correlates well with the cycle
2.  My Oz leading index leads the cycle by ±6 months
3.  It has started to turn up, suggesting that the Australian recession will be short and that the economy will be expanding again by end-year.
4. However, the recession will likely be deep, if the leading index is any guide.

I'll do some more work to see just how deep, over the next few days.

Professor Don hasn't ever had Covid. Why not?

From Melbourne's The Age newspaper

Professor Don Campbell is one of the rare people who have never caught COVID-19, and he can’t help but wonder if it has something to do with a unique daily routine he has performed since May 2020.

In the morning and evening, about the time that he cleans his teeth, Campbell sprays a solution containing the drug heparin into his nose. He also carries a bottle with him, and applies an extra pump if he’s venturing into a shopping centre, hopping on public transport or going to other crowded spaces.

“I haven’t had COVID. Since I have been using the spray, I haven’t had a cold, I haven’t had RSV or the flu,” said the general physician, who is the director of Northern Health’s Hospital Without Walls program. “I’m a NOVID.”

By the end of next year, thanks to hundreds of Victorian families, it is hoped that Campbell and a formidable team of scientists, doctors and pharmacists will know whether heparin, widely used as an anticoagulant, can indeed help prevent people from catching COVID-19.

Later, they want to test if it can reduce instances of long COVID.

In its traditional use, heparin is injected to help people avoid heart attacks, strokes and blood clots. But Campbell said when used via a spray, it would not be absorbed by the body or act as a blood thinner. Instead, it is hoped it could stop people catching or spreading COVID.

The theory – which came to Campbell when he was doing the ironing one day in the early months of the pandemic – is that heparin spray might coat the coronavirus’ protein spike, which is key to COVID-19’s infectiousness, and stop it infecting humans.

Laboratory testing using cells, done by scientists at Melbourne’s Doherty Institute, has since shown promising signs that the heparin theory has potential to translate to real-world results.

Professor Paul Monagle, who has been involved in the project since its early days, said if researchers can prove the heparin spray works to reduce COVID spread, it is highly likely it will work on other viruses.

“That might well have implications for the next [new] virus that comes along, or even just our routine cold and flu seasons,” said Monagle, a leading haematologist at the Murdoch Children’s Research Institute.

“If it works, having an option to give you protection prior to getting on a plane or train or into a crowded space like a football game … would clearly be hugely advantageous.”

The big hurdle the team now faces is getting enough Victorians to sign up to the clinical trial. It requires a person who is positive for COVID-19 and at least one of their family members to use the heparin spray or a placebo saline solution.

About 400 households are needed for the project, and they need to alert researchers within 72 hours of a positive test.

The recruitment process has been challenging, partly because many people no longer test for the virus even if they have symptoms.

Monagle said that in May 2020, the group first applied for funding through the Medical Research Future Fund – whose application assessment process has been scrutinised in an investigation by this masthead – but it was unsuccessful, delaying the project to a point in the pandemic when it was much harder to recruit people.

“Our funding eventually came from the Victorian government, which we are very grateful for, but that put a two-year delay to getting the project up and running.”

The Andrews government committed $4.2 million to the trial, which will be led by the Northern Hospital and Murdoch Children’s Research Institute and involves the University of Melbourne, Monash University and Oxford University.

Associate Professor Paul Griffin, a vaccine expert who has been the principal investigator for about 125 trials, believes the concept is promising and said lots of data already existed to show that heparin was safe, including when taken intranasally. It would also be cheap and easy to produce, he said.

Melbourne GP Dr Jane Crowe, who is involved in recruiting patients for the trial, said if the nasal spray could be proven to help protect people from COVID-19, it could be a huge step forward for people with serious health conditions who remain vulnerable to getting severely ill or dying from COVID-19 despite being vaccinated.

“Their quality of life has suffered, there are family tensions. They’re not going out to social events,” she said.

“Vaccines have been great to reduce severe infection and hospitalisations, but you can still get infected … If the spray can protect people from becoming infected in the first place, and possibly other airborne viruses, it could be a game-changer.”

[People can participate in the trial if they live in Melbourne, are aged over five and have a household member who is also willing to take part. People who have a heparin-induced allergy or have had recent severe nosebleeds are ineligible.

People who are eligible to participate can contact INHERIT.Study@nh.org.au or text or call 0481 983 452.]

I urge you not to rush out and buy Heparin.  It's not yet a proven remedy/prophylactic.  Wait until the test results are in.

Professor Don Campbell has high hopes for heparin spray as a virus preventer.

CREDIT:

PAUL JEFFERS

Excess deaths still running at 5%

Official covid death stats have understated the actual number of deaths due directly and indirectly to covid.  The best way of measuring the direct and indirect deaths due to covid is to measure the number of deaths in comparison with normal death rates.  In the chart below you can see how before covid there was no gap, and after a large one, which is correlated with the waves of infection.

From a toot by Tern.

Modelled excess deaths still running at 5% *worldwide*.

Note the precise match between the shape of the excess deaths peaks with confirmed Covid deaths peaks.

Not correlating with lockdown peaks or vaccine peaks or immunity debt peaks.

Blame infection.

The Covid Crash payback

A common pattern is emerging over the last couple of months, in Europe, the USA, Australia, and other places too.  Manufacturing PMIs are plunging, after a brief levelling off.  But service PMIs are rising sharply.  Here is the commentary from the UK news release from S&P Global:

The latest survey indicated a robust and accelerated increase in service sector output (index at 54.9), with growth the highest for one year. In contrast, manufacturing production (index at 48.5) decreased for the second month running and at the fastest pace since January. 

The contrasting trends for business performance in April largely reflected divergent demand patterns. New order growth hit a 13-month high in the service economy amid rising spending on travel, leisure and entertainment. Meanwhile, manufacturers attributed a renewed fall in new work to customer destocking, elevated energy costs and subdued demand for big ticket consumer goods. Similarly, export sales increased at a solid pace across the service sector, but manufacturers experienced a decline for the fifteenth consecutive month. 

I think the difference is due to a recovery from the Covid pandemic.  Manufacturing, directly impacted by rising rates, is struggling.  But people have been starved of travel and holidays and shows (travel, leisure and entertainment) by lockdowns.  And it's taken time for their plans to enjoy themselves to be realised.  So now they're flying away on holiday, staying at hotels and resorts, and going to see music and plays and bands once again, after a prolonged drought.

As this chart for the US shows, mostly the services and manufacturing sides of the economy move in sync, but manufacturing  (the blue line) tends to lead services (the orange one):

It is not often that services lead the business cycle---except with the Covid pandemic, because it was lockdowns (not monetary policy) which crushed services.  

In the chart below, note how the gap between manufacturing and services expands during recessions, with manufacturing falling faster than services.   Except, that is, during the Covid crash, when services fell much faster than manufacturing (the spike at the beginning of 2020).   The gap the other way between manufacturing and services now is "payback" for the gaps when services were below industry, evident since the beginning of the Covid crisis.

Click on chart to see a clearer image.
Chart shows gap between manuf and services PMIs
Shading shows US recessions

Having explained this anomaly to my satisfaction, and I hope yours, the obvious question is:  when will this end?  Is the post-Covid recovery in services over yet?  

It won't be until unemployment starts rising.  The problem is that, if overall GDP remains robust, because services are strong, and price increases in services remain high, Central Banks will go on tightening.  And because of the lags involved, they risk tightening too much.   By the time they realise their mistake, it will be too late.   But at that point, unemployment will be rising fast, and services will have followed their manufacturing brethren into recession.  

How many months away is that?  I don't know.  Any ideas?  Comment below.

The missing workers who are never coming back

From Axios

Federal Reserve chair Jerome Powell struck a particularly somber note at his press conference earlier this week when he mentioned that one reason the labor market is so tight right now is that many workers died from COVID-19.

The big picture: Economists have theorized for a while about the impact of COVID deaths on the labor market. Now, research has started to emerge and key public figures like Powell are starting to talk about it explicitly."Close to a half a million who would have been working ... died from COVID," Powell said while talking about the U.S. labor shortage.
Go deeper: In a footnote to a speech he gave on Nov. 30, Powell estimates that 400,000 working-age Americans died in excess of what was anticipated pre-pandemic.

State of play: Compared to pre-pandemic projections, there are around 3.5 million people effectively missing from the American workforce, as Powell explained in that speech at the Brookings Institution.This number includes older workers who left the labor force earlier than expected. "These excess retirements might now account for more than 2 million of the ... shortfall," he said.
The other 1.5 million comes from a decline in immigration and "a surge in deaths."
Overall, 1.09 million Americans lost their lives to COVID-19, according to Johns Hopkins data.

💭 Our thought bubble: The role these deaths play in the economy often gets overlooked, possibly because it's so devastating to contemplate.But when considering the state of the U.S. workplace, it's worth remembering that many Americans lost colleagues, friends and loved ones over the past few years. It's a toll that will take many years to understand and lifetimes to grieve.


Read more: Jay Powell explains America's worker shortage

China's Covid disaster

A woman on a stretcher is wheeled into a hospital in Beijing, December 2022. Photograph: Andy Wong/AP

From The Guardian

In the chaos of China’s Covid exit wave, China’s supreme leader, Xi Jinping, has been curiously absent. His last public pronouncement on China’s “dynamic zero”-Covid policy was in his speech to the 20th party congress in October: “We have adhered to the supremacy of the people and the supremacy of life, adhered to dynamic zero-Covid,” he told delegates, “... and achieved major positive results in the overall prevention and control of the epidemic and economic and social development.” It was, he insisted, overwhelming evidence that the policy was correct and that the party cared deeply for the people.

Xi used his New Year Address yesterday to urge more effort and unity as the country enters a “new phase” in its approach to the pandemic. Until his remarks, the defence of his policy U-turn had been left to others. As distressing images of body bags stacked in hospital corridors, patients on intravenous drips by the roadside and hearses queueing outside crematoriums circulated on social media, hapless officials indignantly denied “rumours” of pandemic deaths, repeating claims that China managed the virus better than other countries, demonstrating the superiority of China’s political system, and insisting anyone who says otherwise is either an ill-intentioned foreigner, a traitor to the people or a paid provocateur. They insisted that the reversal was a rational, science-based and well-prepared decision or, as the nationalist mouthpiece Global Times put it last week: “The changing virus variant, accelerated mass vaccination and enhanced medical resources all laid out the foundation for a long planned and orderly Covid response adjustment.”

Within a breathtakingly brief interlude, China’s people have been asked to forget that the Covid threat justified draconian lockdowns, loss of livelihood and liberty. Now they must believe that it is no worse than a common cold, that traditional Chinese medicine is effective and that the death rate is negligible. Despite the double shifts in crematoriums and the lived experience of millions of people, Chinese officials continue to insist that all is well.

Even in a population accustomed to being told that black is white if the party says so, this has generated a mix of indignation and incredulity: indignation at three years of government failure to fully vaccinate a vulnerable population; at its failure to learn from the experience of other countries and territories such as Hong Kong; and incredulity at the manifest gap between propaganda and the evidence of their own eyes. In the black box of Chinese politics, the pressures that led to the decision are unlikely to be revealed, but the chaos of its execution is unmistakable.

There were good arguments for changing the policy. Long before November’s nationwide protests revealed the state of frustration and anger of a people who saw no end, the social and political costs of dynamic-zero Covid were evident. With the arrival of Omicron in China, the policy itself was failing in its primary purpose of containment and elimination: it had become an expensive exercise in futility.

But that does not explain the lack of preparation for an inevitable explosion of infection in a poorly vaccinated population that lockdowns had kept largely naive to the virus. Over the past three years, China focused its vaccination effort on the working population to keep the economy running, which left elderly people particularly vulnerable. As in Hong Kong, many elderly Chinese were also suspicious of the vaccines and, given the government’s promise to eliminate the virus, preferred not to take the risk. And because the government declined to license western mRNA vaccines in China, where they did opt for vaccination their choice was limited to China’s less effective product.

As people fell sick, they looked to pharmacies for remedies, only to discover that in a country that boasts the world’s second largest pharmaceutical industry, the shelves were empty of basic anti-viral drugs or fever remedies. Some desperate patients resorted to importing packets of ibuprofen at eye-watering prices or illegally substituting unlicensed Indian generics. In Japan, authorities imposed restrictions on the purchase of anti-viral drugs as Chinese customers stripped the shelves bare. Why was China unable to meet the surge in demand that the exit wave would inevitably create?

The answer appears to be an elementary planning failure.

In the now distant days of dynamic-zero Covid, access to an anti-viral drug such as Pfizer’s Paxlovid and the Chinese drug Azvudine required nucleic acid tests. Because testing positive meant the patient would be subject to enforced confinement in a state facility, sales plummeted, inventories crashed, production slowed to a trickle and distribution systems atrophied as companies restricted production of time-sensitive drugs for which the market had collapsed. When the policy was changed without notice, they were left completely unprepared.

Today’s censorship and denial recall the first appearance of the virus in Wuhan three years ago. Then, as now, the authorities punished those who told a different story, denied medical evidence and allowed huge social events planned for the annual spring festival to proceed as normal. As it approaches again, millions of Chinese hope to visit distant families and the wealthier plan to travel abroad – or to Hong Kong and Macau, where they anticipate the added bonus of access to western vaccines. Neighbouring countries, concerned, like the WHO, that the lack of data from China could conceal the emergence of new and potentially devastating variants, have imposed travel restrictions for Chinese travellers that China’s official spokesperson promptly denounced as unfair.

On the country’s heavily censored social media, citizens argue about who is to blame for the chaos. Some blame November’s protesters. Others, like the author of a now censored social media post, see it differently: “Shouldn’t they have thought of these things?” he wrote. “The end result is just… baffling. It’s like we’re dealing with a rebellious junior-high-school student who has no sense of responsibility, suffers from an extreme level of paranoia and is completely immersed in the fantasy that he’s the world’s most powerful superhero.”

As the virus rages, Xi’s supporters have defaulted to another familiar script: insist on the party’s wisdom, blame local officials for any failures, punish those who argue and hope to ride out the crisis. Xi’s supreme position in the party was secured at the 20th congress in October. His reputation in the country – and China’s image in the world – may not recover.

Big 8 unemployment rate lowest in 40 years

 This is the unemployment rate I've calculated for the big 8 economies (US, Europe, UK, Japan, China, Russia, Brazil, India)  These economies make up ±75% of the world economy by PPP-weighted GDP.

The thing is, how much of this low unemployment is because of long Covid?  I saw a report (somewhere!) which estimated that in the UK, 3.5% of the labour force is effectively out of the labour force because of long Covid.  If this is true across most economies, even if the numbers differ in each one, the remarkable decline in the unemployment rate to 40-year lows is not so wonderful after all.

Scrapping Covid iso rules will make things worse

From The Conversation

COVID is an exceptional disease and was at its deadliest this year, causing more deaths in Australia between June and August 2022 than at any other time. There have been 288 deaths from influenza so far this year compared to more than 12,000 deaths from COVID.

The number of deaths from COVID in Australia in the first nine months of 2022 is more than ten times the annual national road toll of just over 1,000 – but we are not rushing to remove seat belts or drink-driving laws so people can have more freedom.

Isolation flattens the COVID curve by stopping infectious people from infecting others, and is a key pillar of COVID control.

Removing isolation will not help the workforce

Workforce shortages have been felt in every sector during the pandemic. Shortages of health workers have resulted in the need to import workers from overseas, and deadly outcomes for patients in some cases.

During epidemic peaks this year, the workforce was so badly affected that supermarket shelves could not be stocked. Removing the isolation period is hoped to ease workforce shortages – but any relief will be short-lived.

At times when COVID numbers are increasing, allowing infectious people to mingle freely at work and socially will create epidemic growth and make the crisis even worse. At the current time, when cases are relatively low, removing isolation mandates will not materially benefit the workforce, but will make the workplace and schools less safe.

Eliminating isolation rules provides the opportunity for governments to save costs. Without mandatory isolation support, payments for workers needing to isolate will end.

While politicians spin this as trusting Australians to take “personal responsibility”, sadly many Australians will simply not have the means to take time off work. With elimination of mandatory isolation periods, essential workers in low paying jobs will find themselves at even more risk of contracting COVID in the workplace.

The pandemic is not over

Newer variants of SARS-CoV-2, the virus that causes COVID, are more immune-evasive than ever. Immunity from vaccines wanes within two to three months, and so too does immunity from infection. Hybrid immunity is cited as a reason for abandoning isolation, but is unlikely to eventuate.

Indeed, we saw this with the recent BA5 wave leading to more hospitalisations and deaths than the January/February BA1 wave, despite the presence of much higher vaccine and infection-based immunity in the community. While no doubt this immunity prevented an even worse outcome, it clearly did not keep pace with virus evolution.

While it was hoped hybrid immunity from vaccines and prior infection would reduce subsequent infections, this has not been the reality. Reinfection is becoming more common with variants that are increasingly distant from the original virus. And evidence is accruing that reinfection can cause severe disease.

The most vulnerable may be forced to withdraw from society and from unsafe workplaces to protect themselves. But it is a misconception that COVID is trivial for everyone else. People who are happy and healthy today could become disabled or chronically ill from COVID.

The long-term complications of COVID are substantial, and can include effects on the lungs, heart, brain and immune system. At 12 months after infection, the risk of heart attacks, strokes, blood clots and other complications including sudden death are about double compared to people who were never infected. Chronic complications can occur even after mild infection – including heart failure, strokes and dementia.

Dropping isolation will increase COVID transmission and result in an increase in serious chronic illness. It could be a mass disabling event and so drive major economic and societal losses.

The availability of treatments has been cited as a reason to cease isolation – but these are restricted to limited subgroups, and not available to everyone.

COVID is an epidemic disease and has behaved in a predictable way since 2020, causing recurrent epidemic waves.

Ceasing isolation will hasten the onset of the next wave. Allowing mass infection also creates favourable conditions for emergence of new variants which have been more contagious or more vaccine or treatment resistant.

What we need to do instead

To maximise productivity, health and social success, instead of ignoring COVID, we should tackle it with a layered approach to mitigation of transmission. This includes raising rates of boosters, widening access to antivirals and other treatments, masks, safe indoor air, and widely accessible testing.

Making isolation a rule, and supporting people financially to do so, has been a key pillar of our defences. This is still needed as viral evolution continues to outpace immunity.

We just had our worst wave and there is nothing to suggest the next won’t be similarly bad. Workplace absenteeism is a function of transmission, so better control of SARS-CoV-2 will result in greater productivity, less disruption to families and businesses, and a more successful way forward to living with COVID.

Global electricity demand slowing this year

 From RE News

The world’s electricity demand growth is slowing sharply in 2022 from its strong recovery the previous year as economic growth weakens and energy prices soar following Russia’s invasion of Ukraine, according to the IEA’s latest Electricity Market Report.

Global electricity demand is expected to grow by 2.4% in 2022 after last year’s 6% increase, bringing it in line with its average growth rate over the five years prior to the Covid-19 pandemic, the new report says.

While electricity demand is currently expected to continue on a similar growth path into 2023, the outlook is clouded by economic turbulence and uncertainty over how fuel prices could impact the generation mix, IEA said. 

Strong capacity additions are set to push up global renewable power generation by more than 10% in 2022, displacing some fossil fuel generation.

Despite nuclear’s 3% decline, low-carbon generation is set to rise by 7% overall, leading to a 1% drop in total fossil fuel-based generation.

As a result, carbon dioxide (CO2) emissions from the global electricity sector are set to decline in 2022 from the all-time high they reached in 2021, albeit by less than 1%.

In the first half of 2022, average natural gas prices in Europe were four times as high as in the same period in 2021 while coal prices were more than three times as high, resulting in wholesale electricity prices more than tripling in many markets.

The IEA’s price index for major global electricity wholesale markets reached levels that were twice the first-half average of the 2016-2021 period.

Due to high gas prices and supply constraints, coal is replacing natural gas for power generation in markets with spare coal plant capacity, particularly in European countries seeking to end their reliance on Russian gas imports.

To secure energy supplies following Russia’s invasion of Ukraine, some European countries have delayed coal phase-out plans and lifted previously imposed restrictions on coal.

Globally, coal use for power is expected to increase slightly in 2022 as growth in Europe is balanced by contractions in China, due to strong renewables’ growth and only a modest rise in electricity demand, and the United States, due to constraints on supply and coal power plant capacity.

Gas power is expected to fall by 2.6% as declines in Europe and South America outweigh growth in North America and the Middle East.

Renewables are now a large enough ratio of total electricity supply that an increase of 10% per annum in renewable electricity output  is enough to lead to a small decline in fossil fuels burnt to make electricity.  This is good news, though the decline is nowhere near fast enough.  And it is also offset by fossil fuels used in transport, which are still rising.

Source: Our World in Data
Note: this covers all energy, not just electricity, i.e.,
it includes cars, aircraft, ships etc.
The big fall in 2020, and the rebound in 2021 is due to covid

Don't be a sheep

By Rick McKee