greentheo

As I'm getting into the futures market trading I thought up a possible dark and sinister consipiracy: Global Warming as a biasing factor in the futures markets.

My conspiracy theory goes something like this.

Global Warming (and conversely Global Cooling) are very plausible theories with good evidence to back both theories up.  Global Warming and Global Climate Change are both complex theories that are sufficiently complex to confuse the average semi-educated (or even educated) person.  Nobody really knows if they are true or not.

But most of all, Global Warming and Global Climate change are very scary theories.  If true, they would imply death and destruction (or so they say... though it is also possible that Global Warming could lead to decreased frost rates and increased arable land).

In the futures market, one can really bet on anything, including the number of days of frost, the temperature of the weather and also extreme weather events.  As in the stock market, a large panic or persistent fear in one direction could provide a positive bias or even an eventual collapse.

For instance, the housing market bubble was created by a bias towards the belief that house prices always go up.  The recent crash of 2008 was caused by a panic stirring up from the overextension of a few key banks which caused many more unstable banks to face default.

What if the same were true for a group of people who persistently influenced media and science to portray the climate as "always going up", or "extremely volatile"?  There would be profit to be made.  Especially as every common weather event would now be interpreted as an uncommonly strong event and overreactions in the market would be both predictable and profitable.

Hurricane Katrina was an extraordinarily strong hurricane.  But it was expected in New Orleans  with probability 100% for the last 50 years.  There was nothing surprising about it.  But coupled with a beleif in Global Warming or Global Climate Change the stage was set for large scale turmoil and hype.  "More cat5 hurricanes on the way!" everyone says and suddenly, hurricane futures are a hot commodity!  And so is anything green related.  After all... we wouldn't want another Katrina if we could help it!

We can envision a tie in with the stock market... renewable energy stocks way up!  It's a green bubble!  The government takes action now (unlikely) and offers a bounty on Co2 capture and sequestration... and the futures market responds... Co2 futures way up, companies that sequester carbon, way up!

And then news breaks,  "We were wrong, it's actually global cooling due to pollution particles blocking out the sun combined with unprecedented low levels of sunspots".  And the green bubble bursts, all the short positions on the green bubble make billions and somebody gets very wealthy.  And now to save the earth we must burn oil at an unprecedented rate!

Anyhow, just a conspiracy theory, but is it really that implausible?

(Note: yes I'm still for the green movement, but not becuase of Global Warming.  I like it for it's frugality, it's love of the earth and it's simple minded approach to life.  Also I do beleive that all the toxins we put in the environment are extremely bad for us, and are a hidden tax on the poor.)

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Tags: consipiracy, earth, evidence, Global, market, probability, Warming, weather

This entry was posted on Monday, October 27th, 2008 at 1:31 pm and is filed under Green, Miscellaneous. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.