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Short and medium term impacts of Australian bushfires

Discussion in 'Medium/Long Term Investing' started by qldfrog, Nov 16, 2019.

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  1. qldfrog

    qldfrog

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    Following the recent bushfires, intensity, size and media coverage; I expect some significant side effects on some investments: obviously insurances but also construction materials, an overall increase again of Australian construction costs, and with more scrutiny and red green tape, a smaller release of new suburban lands.
    It could also be affecting in the short term the GDP; increasing it as new rebuilds are happening so maybe lessening the RBA urge to reduce interest rates.
    We need to put figures on that.
    We can also expect a new orchestrated urge to "fight global warming", so reduce competitiveness of Australia and lower A$, maybe even reduced export of coal due to voters pressure while benefiting EV, solar,wind, or maybe even uranium here if the Uranium lobby plays well.
    Also an increased radicalisation on both sides of politics here

    I do not want this thread to become another GW one, the facts is that whatever Australia does will not affect any climate change ever assuming it is human caused and/or CO2 emission linked so no, the fires will not stop next year nor in the next 2 decades if the Greens take power
    SO let's watch this from an investor's view
     
  2. qldfrog

    qldfrog

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    So feel free if you see short term effects on specific codes, sector and add a few lines of comments
     
  3. Smurf1976

    Smurf1976

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    One effect I think we may see is some "seen to be doing something" spending by governments on fire fighting equipment and so on.

    Could be a bit of benefit to whoever manufactures that sort of thing.
     
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  4. qldfrog

    qldfrog

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  5. qldfrog

    qldfrog

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    Davey pumps GUD code on asx
     
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  6. Smurf1976

    Smurf1976

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    Another thought is changes to land zoning with respect to fire.

    In my case I'm just over 200m from a substantial area of natural bush but am outside the "high" or even "medium" fire risk zone according to council.

    Suffice to say I wouldn't want to be in council's shoes if a place 200m from the bush did burn when they've clearly stated it's not at risk. If these "fire storms" really can't be controlled well then I can foresee some rezoning taking place at some point.
     
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  7. SirRumpole

    SirRumpole

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    As far as insurance goes it seems to me that there should be a clamour of people who have no insurance now to buy insurance due to the increased risk.

    Sure the payouts are going to be more but its my view that as long as the insurance companies don't get too greedy and make insurance unaffordable then they will benefit from extra revenue.
     
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  8. rederob

    rederob

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    GDP always takes a hit with natural disasters.
    Insurers do as well; insurance premiums will rise across the board.

    On other fronts, homogenistaion of building codes/standards should become a national priority.
    So too should the federal government instigate a FEMA style approach to disaster management so that resources for national emergency response can be immediately accessed from anywhere and the cost borne nationally rather than by the affected states. This measure would mitigate the bunfights over resource allocation that, for example, we are seeing play out wrt to rural fire brigade resourcing.

    More than anything, however, we seriously need to ensure water security for all parts of our nation and address this as a priority.
     
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  9. rederob

    rederob

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    Two points to expose your poor thinking.
    First, the idea that nobody acting to change something is ok, is naive. It's a bit like saying don't worry about fuel reduction because there's way too much forest and you can't/won't make any difference.
    Secondly, and on topic and more importantly anyway, shareholders and investors will be seeking more-ethical investments from the companies they put money into, while listed companies will realise they cannot remain exposed to practices which are unfavourable to climate.
    A possible third point would be to look for new company listings taking specific advantage of tapping into climate change. I have no idea what they might look like, but it's a big market and just needs the right thinking and a product mix to make it work.
     
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  10. Sdajii

    Sdajii Sdaji

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    I think you're expecting more to happen than will. There will be some effect on insurance companies etc as you say, but significantly tangible things like coal exports will most likely not be effected. There will likely be the expected bleating of uni students standing in the way of traffic and people posting virtue-signaling memes on Facebook, but at the end of the day all this is just meaningless talk. Without coal exports etc the virtue signalers won't have their dole cheques coming, the uni students won't have generous government financial assistance, everyone wants nice roads and hospitals and schools and welfare and food safety which are paid for thanks to things like coal exports. The same people demanding 'action on climate change' will still bitch about petrol and electricity prices and demand government funding for community projects. And of course, the people who aren't bleating about it aren't even paying lip service to the ideas.

    It's possible there may be some noise due to speculation about solar or wind subsidies, or some temporary or small scale action in that way, and long term there will be significant changes, but I dont think these fires are going to change anything worth worrying about in terms of the big picture.

    I was right in the middle of the main area hit by fires on Black Saturday in 2009. There was talk about various changes from that one too, but other than local businesses being screwed by the local government who were taking advantage of the situation and despite speculation of big changes, about all we saw was a reclassification of the highest fire risk category of weather being relabelled from 'extreme' to 'catastrophic'.

    Talk is cheap. When electric vehicles are cheap enough they'll become popular and numerous. Until then people will talk about it and nothing much will happen. When coal is uneconomical to export it'll stop being exported. Until then people will talk about stopping it but nothing will change. Even if people kick and scream and throw tantrums in the streets and sign online petitions, politicians know that people are still going to react worse to 'sorry, there's not enough money coming in, we're going to have to tax you more and give you less free stuff' than 'we're maintaining the same old coal export gig'. Of course, they'll virtue signal about how they'd be willing to make personal sacrifices in order to bring about change, but if faced with actually having to make personal sacrifices all but a negligible few will fall silent.
     
  11. qldfrog

    qldfrog

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    I fully agree with you @Sdajii but i think we will see token actions, a lot of talks but a few batt scheme like decisions which could boost some profits here and then
    Building code rating which will replace wood by composite materials etc
    But i could be wrong
     
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  12. rederob

    rederob

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    Ethical investing is now affecting trillion dollar businesses like the Government Pension Fund Global of Norway, so to think fossil fuel investments will see big money flows in future is pie in the sky, and your ideas about coal are as antiquated as coal power plants.
    Although a bit off topic, major insurers and reinsurers are looking very closely at climate change impacts and it is probable they will be taking off the table, or pricing out of the market, future risks such as flooding in Venice.
    There is now a palpable difference between those who do not understand climate change and those who are living and dying in the thick of it. To pretend it's not real or deny it is a personal choice, but to those affected by or concerned about it, the momentum has shifted up a gear.
    Moreover, we have yet to get to the really hot time of summer and the next big disaster will be the electricity grid not coping with demand in southern States. Maybe catastrophic grid failure (load shedding really, but my point is about the need for an HVDC spine along the eastern seaboard) will spur some action from our limp federal Energy Minister, but removing him would be smarter and replacing him with Barnaby Joyce (yes, another joke). Planned renewables investments could nip this in the bud more quickly than any conventional energy or pumped hydro scheme when married with battery storage. So that's an area I will keep an eye on, although past experience suggests it's a forlorn hope.
     
  13. qldfrog

    qldfrog

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    How could i expect this thread to go away from the propaganda of the under informed and west centric brainwashed
    I switched off the ignore button, always hopeful of a useful entry, i once read something sensible in the gold thread..but no
    So if you have anything useful to add here please do
    For the GW and we're killing the world with cow farts and co2..but forget the 8 billions farting bipedes, there is a thread for that, not here.
    Thanks
     
  14. rederob

    rederob

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    Stick your head in the sand as much as you like, but the big end of town - the end that invests in the $billions - will be acting to mitigate the effects of climate change.
    Sadly, you think bushfires are not being affected by climate change but all you have actually done wrt to ASF is replicate a thread started by Rumpy.
    As to saying things useful, apart from screwing up the economic impacts of bushfires, you have a strange view that "fighting global warming" is anticompetitive/unproductive. Why don't you ask the Danes about their experience, or work out for yourself that renewables is actually creating more new jobs than traditional energy sectors. We have been left out of the manufacturing boom in renewables and are like our car industry, semi-skilled assemblers instead.
    When it comes to being "uninformed" there are areas at ASF where you excel.
     
  15. Jack Aubrey

    Jack Aubrey Very inexperienced trader

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    Well, my wife has spent the past two days spending all our Xmas money on gifts for fire and drought affected families, so I guess Canberra retail - particularly the high-end soap and perfumed candle sector - is getting a boost. She has also promised to get me a T-shirt with "woke inner-city leftist" on it, so shares in Redbubble (ASX:RBL) could be a goer.

    So far, I understand around 200 homes have been destroyed (but we haven't even started the official bushfire season yet). This will boost local economies with work for tradies, etc.

    The general state of the economy and our Federal Government's belief in the virtues of austerity (as well as their now baked-in denial that anything can or should be done in the name of climate) will limit how much additional money flows to either short-term projects (hardening infrastructure) or longer-term adaptation and mitigation projects. They will be hoping like mad that all this blows over.

    I do think there will be a retreat from oil and gas and coal investments, lead by super funds and the big investment houses. They are becoming toxic for many investors. For various reasons not suitable for this thread, I think that (mostly) aligns with the actual economics.

    The biggest medium term threat IMO comes from Australia's declining reputation as a global "good citizen" on climate and environmental issues generally. The bushfires and drought are international news and are often spoken of in association with our "poor" performance on international climate targets (featuring a pic of our now PM holding up a lump of coal in Parliament). While I don't necessarily agree with all the commentary on this, we are genuinely a "sitting duck" if major players see advantage in bringing in trade and investment sanctions as part of their climate change arsenal. Nobody is going to seriously sanction the Saudis or the US but we are up there in the top five "bad boys".

    On a positive note, if we could find a way to monetise blame, we could inject a ship load of money into regional economies, pay our volunteer firies a decent allowance and get a dozen aerial water bombers.
     
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  16. SirRumpole

    SirRumpole

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    Thermal coal will be in decline certainly but I can't really see a replacement for coking(metallurgical) coal in the short or medium term.

    Whether investors have the nouse to separate the two, or want to do what Adam Bandt suggested on Insiders this morning, ie destroy the coal industry in 10 years, remains to be seen.
     
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  17. qldfrog

    qldfrog

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    Can you please **** off
    I start a thread about bushfire, not global warming, stick to the economics of it and you are back again with your rant
    @Joe Blow , i try to go along following your need for greater economic focus, and here come the usual toxic pos pushing his/her dimwit agenda based on y5 sciences , probably sitting in a unit in one of our capital cities with AC on.
    There with no winner here, it is much easier to just close
     
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  18. qldfrog

    qldfrog

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    Never put reality or facts in front of fanatism
     
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  19. qldfrog

    qldfrog

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    I have some RBL;)
     
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  20. rederob

    rederob

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    You still don't get it do you.
    If there are trading implications from the bushfires then they will be as a result of global warming.
    It's just that simple.
    And there is already a thread that addresses those matters.
    Leave your personal insults out of this and apply your nous to the issue.
     
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