We have yet another climate change report to deal with that is long on dire consequences but devoid of anything reasonable to do. To which Scott Adams replied:
A confident economic forecast of a 10% change in the economy by end of the century looks exactly like a hoax to me. How do you forecast unexpected technological advances? And how do we know the GDP for 80 years when we don't know next quarter? https://t.co/eK2TiSIguM
— Scott Adams (@ScottAdamsSays) November 23, 2018
One of the funnier comments I saw related to President Trump’s recent tweet on climate change was that cold weather on a single day doesn’t say anything about climate change which is a long term event.
Brutal and Extended Cold Blast could shatter ALL RECORDS – Whatever happened to Global Warming?
— Donald J. Trump (@realDonaldTrump) November 22, 2018
Well who the hell started all of this anyway? Every time a fire started somewhere or a tornado happened, it rained too much or rained too little, ice fell into the sea or ice didn’t fall into the sea, there was a blathering of articles (somewhat like a cete of badgers) about how this was an example of climate change.
If you spend your day worrying about the likelihood of an event occurring now or in the future who are you?
YOU ARE AN INSURANCE COMPANY.
Who is the penultimate spokesman for insurance? That would, of course, be Warren Buffett who in 2017 said
Up to now, climate change has not produced more frequent nor more costly hurricanes nor other weather related events covered by insurance. As a consequence, U.S. super-cat rates have fallen steadily in recent years, which is why we have backed away from that business. If super-cats become costlier and more frequent, the likely – though far from certain – effect on Berkshire’s insurance business would be to make it larger and more profitable.
Emphasis is Warren’s.
Companies that sell “super-cat” reinsurance take the risk paying a gigantic payout for something that happens rarely. There are only a few companies in the world that have enough cash to take on this level of risk. In 2017, the top six reinsurance companies were:
- Munich Reinsurance Company
- Swiss Re Ltd.
- Berkshire Hathaway Inc.
- Hannover Rück S.E
- SCOR S.E
The reason they’re called “reinsurance” is that, for example, your homeowners insurance company might purchase insurance from a reinsurer against the possibility of a major loss where they have a high concentration of policy holders — such as a hurricane. That way they can keep their costs low to you by passing part of the risk on to the reinsurance company.
The bottom line here is that if a case could truly be made that climate change was having a significant detrimental effect on the planet, these people would be raising their rates to cover the risk.
But they aren’t and they can’t because it isn’t.
What did Warren Buffett say about climate change in his most recent Letter to Shareholders about climate change? Nothing. Zip. Zero. Nada.
As a good Democrat, Warren Buffett has said “Climate change is a societal problem.” OK, fine. I don’t like nasty air either particularly when it’s caused by fires in California that were exacerbated by poor land management practices!
Mr. Buffett is 88 years old now and has spent years and years preparing for Berkshire Hathaway to run in his absence. I think it’s more than a little telling that climate change is not on his radar. It’s a case of putting your money where your mouth is — and so far that hasn’t happened. Even one little bit!
DISCLOSURE: The author is long Berkshire Hathaway stock. KACHING! WAHOO!