…and Jake from State Farm leaves California
| Green landing? (Nicolas Economou/Getty Images) | |
|
|
Yesterday's Market Moves | | Dow Jones
33,043 (-0.15%) | S&P 500
4,206 (+0.00%) | Nasdaq
13,017 (+0.32%) | Bitcoin
$27,726 (-0.07%) |
| Dow Jones
33,043 (-0.15%) | S&P 500
4,206 (+0.00%) | Nasdaq
13,017 (+0.32%) | Bitcoin
$27,726 (-0.07%) |
|
|
|
Hey Snackers, From spy balloons to spy belugas, a whale suspected of being a Russia-trained operative has reappeared off the coast of Sweden. He may be an underwater agent. While you were grilling corn on the cob over Memorial Day weekend, President Biden and House Speaker McCarthy reached a tentative deal to raise the debt ceiling. Congress still needs to OK it for the US to avoid a default. | |
|
|
Delta's carbon-neutrality lawsuit highlights issues with companies trying to buy their way to net zero | Offput by offsets… Delta, which has called itself "the world's first carbon-neutral airline," is facing a class-action lawsuit over that claim. Plaintiffs say it's "false and misleading," arguing that the airline's carbon offsets — credits that can be bought by companies to counteract their emissions — are "junk" (i.e.: not actually counteracting the climate crisis). The case adds to growing backlash against the carbon-offset market, which Greenpeace has labeled a greenwashing scam. Sus-tainability: Evian parent Danone is being sued over its carbon-neutrality claims, which also rely on offsets. Last week, research from a nonprofit watchdog said that 93% of offsets bought by Chevron between 2020 and 2022 were "worthless." Certified: An investigation this year said that 90% of rainforest offsets approved by Verra (the world's leading carbon-credit certifier) and used by major companies like Disney and Shell were worthless — and could actually increase global heating. Verra said it plans to phase out its program by 2025.
Buying the forest for the trees… The offsets market jumped from $520M in 2020 to $2B in 2021, and could reach $40B by 2030. Companies appealing to environmentally conscious consumers and investors are seeking quick ways to reduce their footprints. But not every offset is equal: Credits tied to renewable-energy projects or forest protection are cheaper, but experts say they doubt their effectiveness at reducing CO2 levels (picture: buying a forest that already exists). More effective offsets, like investments in direct carbon-capture technology (sucking carbon out of the air), can cost thousands of dollars more per credit.
|  | THE TAKEAWAY |
| It ain't easy being green… The offsets market is unregulated. Even as some low-quality offsets are rejected by certifiers, new certification boards are popping up to approve junkier credits. But as ESG interest grows, calls for oversight are mounting: last fall, a group of Democratic senators asked a federal regulator to crack down on the market and develop standards for climate credits. | |
|
|
State Farm ditches new home insurance in California after fires became costly catastrophes | Ghosted by Jake… Over the weekend State Farm stopped taking applications for new home insurance policies in California, saying its wildfires and rebuilding costs are hurting its bottom line. The "like a good neighbor" company was the largest home-insurance provider in the US and CA as of 2021, with more than 8% of the state's market share. - More destructive: The Golden State's wildfire season has burned through 2M+ acres on average each year for the past half decade. The deadly Camp Fire in 2018 destroyed 11K homes, displaced 50K residents, and resulted in staggering losses for insurers.
Frightful weather… Extreme weather is squeezing the home-insurance biz from coast to coast. In response to events like fires and floods, insurers raise premiums and up the eligibility requirements for residents to get a policy, especially if they live in high-risk areas. In CA, regulators barred insurers from canceling or refusing to renew policies in some ZIP codes. Last resort: Last year American International Group (AIG) also left CA, and in hurricane-prone Louisiana 20+ insurers have gone bankrupt or left the state over the past two years, leaving thousands dependent on state resources. Insurance crisis: 9 in 10 US homeowners saw their premiums rise from 2021 to 2022, insurance marketplace Policygenius reported. Premiums in Louisiana were 46% higher than the national average as of January.
| | THE TAKEAWAY |
| The problem could get worse… Structural damage from severe weather totaled $145B in 2021, and the climate crisis is expected to make weather catastrophes even more frequent. Ditching areas where insurance is most critical may help corporate profits, but it could leave more people uninsured or dependent on state-run plans made for those who can't get traditional insurance. | |
|
|
What else we're Snackin' | IOU: The debt-ceiling deal reached by President Biden and Speaker McCarthy would restart the collection of federal-student-loan payments on August 31, after a three-year pause. 40M+ Americans have student debt. Open: Tesla stock rose after Elon met with China's foreign minister (Musk's first visit to Tesla's top production hub in three years). While US-China tensions are high, American CEOs are returning to the country. Fearvertise: Tech execs said that AI poses an "extinction" risk to humankind. But as Silicon Valley CEOs call for AI regulation, cybersecurity experts say genAI risks are overblown. Debtc: A White House proposed 30% tax on crypto miners' electricity costs looks to be dead, an apparent casualty of the debt-ceiling negotiations. Industry insiders said the tax would've driven miners abroad. $$$: Nvidia became the first chipmaker to hit a $1T market cap, briefly joining the trillion club after it reported earnings last week. Its gaming sales are sagging, but its GPUs are used in genAI tools like ChatGPT.
| 🍪 Thanks for Snacking with us! Want to share the Snacks? Invite your friends to sign up here. | |
|
|
Snack Fact Of the Day | The college-enrollment rate for recent US high-school grads fell to 62% from 66% prepandemic | | |
|
|
Wednesday | - Earnings expected from Chewy, Nordstrom, and Salesforce
Authors of this Snacks own shares of: Delta, Disney, Tesla, and Nvidia | |
|
|
Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... See more | |
|
|
