Current Progressives Are Failing To Make Progress.

Credit Suisse Mismanagement Reason For Downfall.

Here is what we will be getting into today:

1. Risk-Taking & Clear Goals Necessary for a New Era of Progressivism.

2. Mismanagement & Excessive Risk-Taking Is The Root Cause of Credit Suisse's Downfall.

3. Navigating the Landscape of Scaling Up Solar Power in the EU.

Let's Dive In!

Newsletter: Noahpinion

Title: Progressives need to embrace progress.
Link: https://noahpinion.substack.com/p/progressives-need-to-embrace-progress

Here are the key highlights:

• The world is facing complex issues such as conservation of nature, pro-life beliefs, and the death penalty. Many current progressive approaches are detrimental to progress and fail to define it properly. These approaches often commit to a set of procedures and methods that end up being detrimental to their goals.

• The push for green energy is now in danger of failing because progressives are entirely focused on writing checks instead of creating the institutional capacity necessary to sustain change.

• The manufacturing industry in America is struggling to find qualified workers, leading to labor shortages and an inability to compete globally. While raising wages has been proposed as a solution, it does not address the root issue of a lack of skilled workers.

• The Denver chapter of the Democratic Socialists of America teamed up with Republicans to block a housing development on a golf course. This kind of bias towards maintaining the status quo ultimately harms progressive goals.

• Government funding given to non-profit organizations has been proven disastrous in San Francisco because shady non-profit organizations have appropriated most of the public money for themselves while evading laws against political involvement.

• It's time for a new kind of progressivism, one that is grounded in the idea of progress as actually getting things built and producing progressive outcomes. Instead of focusing on protecting the disadvantaged from corporate interests and oppressive majorities, the new progressivism should be focused on achieving tangible results that make people's lives better.

• Progressives must be willing to experiment and try new approaches, rather than instinctively defaulting to the same old techniques used in the past. This means being willing to take risks, try new things, and be unafraid of failure. At the same time, the new progressivism must have clear goals. Instead of merely opposing the status quo, progressives should be clear about what they want to achieve and how they plan to get there.

Newsletter: Apricitas Economics

Title: The Death of Credit Suisse.
Link: https://www.apricitas.io/p/the-death-of-credit-suisse"

Here are the key highlights:

• Credit Suisse was once a financial giant that has suffered significant losses due to poor risk management and slow response times, resulting in a decline in customer confidence and financial health. The collapse of Archegos Capital Management caused several major investment banks to lose money, but Credit Suisse's losses exceeded others due to its mismanagement. The fallout from these losses has led to a decrease in deposits, with the bank losing over 40% of its total deposits since Q1 2021. The risks inherent in Credit Suisse's exposure are a large part of why regulators decided to force the sale before it could collapse.

• Credit Suisse was ultimately forced to sell to UBS, leaving behind a 166-year history as an independent institution. The sale to UBS could still pose risks to the broader financial system. Given the potential for this problem to spread, the demotion of Credit Suisse will likely shake confidence in other lenders. As well, prices for European Additional Tier 1 (AT1) capital bonds, the instruments that usually convert to stock if a bank encounters stress have fallen dramatically in recent weeks.

• Although a complete collapse of the banking system has hopefully been averted, the sale of Credit Suisse has shown just how fragile international banking can be. The fact that deposit outflows were already happening is indicative of a much larger problem that regulators and investors need to consider.

• To prevent another global financial crisis, central banks around the world are taking steps to expand the ability of foreign central banks to access dollar liquidity. The Federal Reserve lending facility shot up to $6B, indicating that some foreign central banks or banks borrowed a significant amount of dollars from the Fed by pledging US Treasury bonds as collateral. However, borrowing through the Foreign and International Monetary Authorities (FIMA) repo facility also raises suspicion for several reasons.

• Firstly, $6B is exactly the counterpart party limit on FIMA borrowing, which implies that one institution likely maxed out its credit line. Secondly, the rates for FIMA repo borrowing are significantly above market repo rates, suggesting that some foreign central bank was either unwilling or unable to borrow from the open market. The Swiss National Bank (SNB), which holds large amounts of dollar-denominated foreign exchange reserves, might have borrowed against and UBS/CS might have needed dollar liquidity but using the FIMA repo in place of the open market implies they were willing to pay a premium to conceal their borrowing or felt they couldn't access the normal repo market. This situation means that European banks are going to find it harder to raise money precisely when they may need it most.

• A stable financial system is necessary to support both economic growth and social well-being. Financial institutions must not prioritize their own interests over the interests of society as a whole. We must hold financial institutions accountable for their actions, and to work towards building a more transparent, ethical, and sustainable financial system.

Website: Financial Times

Title: Solar power: Europe attempts to get out of Chinas shadow
Link: https://www.ft.com/content/009d8434-9c12-48fd-8c93-d06d0b86779e

Here are the key highlights:

• The EU is aiming to make solar power its main source of energy by 2030, almost tripling its solar generation capacity. Production is currently concentrated in China, which supplies over 75% of the EU's solar panel imports, and concerns remain about human rights abuses in the country's production of poly-silicon, the main raw material for solar panels. The EU's commitment to prioritizing local production in public procurement contracts and consumer subsidies for renewable energy sources could increase costs and adversely affect adoption.

• Some European solar companies are calling for more funding to bring the industry up to the level required to meet the EU's ambitious energy goals, and policymakers are divided over the proposed level of industrial strategy necessary to block Chinese imports without necessarily giving enough to European production. Poorly designed policies run the risk of setting the sector back 20 years.

• The key to success will be finding a way to scale up production quickly and cost-effectively, without pricing out consumers. European officials and companies are increasingly wary of relying on one country and want to avoid a repeat of the EU's biggest trade dispute with China, which occurred in 2012 when the European Commission imposed an almost 50% duty on Chinese solar panel imports.

• Chinese companies dominate the world's production of polysilicon, which is used in the semiconductor industry and turned into ingots and wafers. Germany's Wacker Chemie is one of the top suppliers to upstream polysilicon producers in Norway, but the output remains low, providing little incentive for suppliers. The demand for renewable energy sources continues to rise, and the question is how quickly the EU can create the new supply chains needed to achieve its renewable energy goals.

• To compete in Europe, companies need predictable energy costs. Polysilicon production and ingot fabrication are both energy-intensive, and China's industrial electricity prices are much lower than Europe's. The Breakthrough Institute argues for moving supply chains into more renewable-reliable regions in Europe, like Scandinavia, the US, Canada, Korea, and Malaysia.

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