Crypto News: The City of Light may go dark this winter

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Think Germany is the European nation most at risk of blackouts this winter? Think again.
The European Union needs to get its collective act together to resolve its energy crisis.
The rush to electric vehicles risks straining power grids everywhere.
Jerome Powell should brace for higher unemployment. Janet Yellen maybe should, too.

In his song "I Love Paris," immortalized by the incomparable Ella Fitzgerald, Cole Porter summed up the perennial delights of France's capital city:

I love Paris in the springtime
I love Paris in the fall
I love Paris in the winter when it drizzles
I love Paris in the summer when it sizzles

Paris may not be such an appealing prospect once the weather worsens this year. Germany has garnered most of the attention when it comes to Europe's energy crisis, given its dependence on Russian gas. But it's France that will struggle the most to avoid blackouts this winter, argues Javier Blas. More than half of the 57 nuclear power plants operated by utility Electricite de France SA are offline for emergency maintenance. As a result, domestic electricity prices are surging.

France has already had to buy electricity from overseas on a record number of days this year. And baseload French power prices for December are almost more than double those in Germany. "Paris is delightful in the autumn and the winter," says Javier. "It'll be much less attractive if the City of Light is forced to go dark." (Javier also contributes to Elements, our new daily energy newsletter, which you can sign up to here.)

The European Union's collective response to Russian President Vladimir Putin's weaponization of energy exports has been inadequate. A European Commission proposal for all member states to reduce gas use by 15% was "dead on arrival," Bloomberg's editorial board argues. "The response needs to be more than fig-leaf solidarity."

What's needed is a heads-of-state summit to address the threat, with three priorities. Income-based subsidies should be made available to help the poorest households pay their bills this winter. Demand has to be managed more creatively, given how controversial mandatory industrial suspensions of power usage will be if factories are shuttered to maintain power supplies to households. And the EU needs to move faster to wean itself off Russian gas.

"The EU should boost investment in solar, wind, green hydrogen and other alternative sources," the board says. "If there's any silver lining to this crisis, it's that the proper response could supercharge the transition to a low-carbon future."

If 60% of gasoline-powered vehicles are replaced by electric autos, and charging those battery-powered cars goes mostly unmanaged, national peak loads on electricity grids will rise by more than 8%. If demand is managed, by only plugging in chargers overnight for example, the increase will be just 2.6%. "As a power crisis bites, that difference is significant," writes Anjani Trivedi.

While improved battery technology will help ease the coming burden, governments should start planning for better grid management. A long-term fix would involve vehicle-to-grid technology, with cars becoming part of the power storage solution rather than just passively sucking electricity from the networks. "But like most huge technology and behavioral shifts that require vast amounts of investment, regulatory support is required to create the right incentives," Anjani writes.

Ever since Janet Yellen was talked into becoming US Treasury Secretary in January 2021, after stints as chief White House economist and Federal Reserve chair, there's been speculation about how long she'd last. As Washington starts to brawl over who's to blame for surging inflation and the looming prospect of a recession, the infighting "may end up shortening" her tenure, argues Jonathan Levin.

Her public confession earlier this year that she "was wrong" about inflation — a rare admission of culpability from a policy maker — didn't exactly endear her to the administration. While the Fed tries to tackle rising prices with the blunt instrument of higher interest rates, politicians should acknowledge their role in overheating the economy by overdoing economic stimulus. "It remains to be seen whether the inflation outcome burnishes or tarnishes Yellen's storied career," Levin writes.

Those Fed rate increases still leave policy extraordinarily loose when official interest rates are compared with inflation. Given the extremely uncertain economic outlook, the central bank has wisely abandoned forward guidance about the likely path for borrowing costs, argues Clive Crook. But Chair Jerome Powell needs to come clean about how the Fed will react to an increase in joblessness.

"It should be more forthcoming about whether bad news on unemployment combined with bad news on inflation would push it toward more gradualism or less," Clive writes. Moreover, job-market losses shouldn't inhibit its anti-inflation stance. "The Fed should expect — and shouldn't be deflected by — higher unemployment."

The strong dollar is inflicting pain on developing nations. — Liam Denning, Ruth Pollard and Stephen Mihm

Amazon's advertising business is a star performer. But where are the details? — Martin Peers

Joseph Biden and Xi Jinping remain hostage to Nancy Pelosi's proposed Taiwan visit. — Matthew Brooker

Hungary's Viktor Orban wants no mixed-race Europeans. Will he say that in Texas too? — Andreas Kluth

Biden's unlikely gang of four takes aim at Iran and China. — James Stavridis

The crypto collapse has flooded the market with Rolex and Patek Philippe timepieces.

Russia is wiring dollars to Turkey for a $20 billion nuclear plant.

Porsche is in advanced talks to join Formula 1 racing by teaming with Red Bull.

Prince Philip's will to stay under lock and key, UK judges rule.

The 'Wagatha Christie' legal saga that's transfixed Britain for months ends with Colleen Rooney cleared of defaming Rebekah Vardy.

Want to be a Love Island winner? It helps to be a brunette from Essex. (h/t Andrea Felsted)

Texas man recognized by Guinness World Records for collecting more than 3,000 items of Sonic the Hedgehog memorabilia.

Cleo Watson was ~~chief nanny~~ deputy chief of staff to UK Prime Minister Boris Johnson, a role that involved alternating between "stern finger-wagging and soothing words" to cope with his temper tantrums. (h/t Lionel Laurent)

Spanish Prime Minister Pedro Sánchez proposes a sartorial solution to the energy crisis:

Werewolf erotica novels are powering the gig economy. Really. (h/t Paul J. Davies)

A Cambridge researcher is using an ultra-realistic virtual reality to teach mindfulness in a serene environment followed by "a very scary stressful situation and we ask them to try and remember that breathing technique … in a dungeon with a monster wandering around, but the monster can't see, it can only hear you."

Notes: Please send werewolf erotica and complaints to Mark Gilbert at magilbert@bloomberg.net.

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