Written By: Emily Vo
Utilities
Texas’ winter storm exposes inequalities in the state’s power grid
Texas produces the most electricity in the United States, however, many underprivileged residents found themselves without power during this unprecedented winter storm. Millions of people across Texas found themselves in the dark and cold amid this winter storm. However, images of city skylines, such as those in Houston, revealed how disadvantaged families and people of color were disproportionately affected during this time. Their neighborhoods were revealed to be dark during the storm, while the city’s skyline lit up. It has been pointed out that disparities like these have always existed, the winter storm just amplified them. In an attempt to combat the outages, the Electric Reliability Council of Texas initiated outages to try to redirect power to areas that needed it the most. However, this only revealed issues with infrastructure that allows denser and more affluent communities to receive and benefit from the power. Inequalities in cities such as Austin and Dallas were also revealed during blackouts in this winter storm. These cities, like Houston, saw their downtown areas shining while the communities around them were dark. This issue has led many to turn to life-threatening methods of staying warm such as using cars for heat. A woman and a girl in Houston passed away from carbon monoxide poisoning after they left their car running in their garage to try to generate heat. This utility inequality in Texas has been amplified by the winter storm and has greater consequences than we believe.
Winter Storm
This unprecedented winter storm threatens millions of Americans across the United States
This winter storm has blanketed large parts of the South with snow and freezing rain. As a result, millions of Americans have been left without power and running water. The storm is predicted to clear out and move towards the East Coast later this week, however, it is currently prolonging freezing conditions across many states such as Texas, Oklahoma, and Tennessee. Other states, such as North Carolina, Virginia, and Mississippi, are also predicted to be affected. The icy weather poses a real threat for widespread power outages, which has already began in Texas. According to the Associated Press, without power and in freezing conditions, more than two dozen people have died due to weather-related issues. Many states such as North Carolina have even declared a state of emergency in response to this storm. Utility and electricity companies are aware of these power outages and have been working to try to restore electricity and redirect power to those who need it most. Conditions are predicted to return to normal or at least improve by the end of the week. However, vaccinations have been postponed in these areas, further slowing the vaccination rate in the United States.
Bitcoin
Bitcoin has crossed the $50,000 price barrier
Bitcoin first tentatively passed the $50,000 price barrier on Tuesday. But on Wednesday, February 17th, it definitely passed this barrier. This barrier is a crucial threshold and Bitcoin has surpassed many predictions. Today, the driver of Bitcoin’s price is largely speculation. Tesla’s purchase of $1.5 billion worth of Bitcoin on February 8th is believed to have been the final push Bitcoin needed to pass the $50,000 barrier. Tesla, along with other big-name investors, are betting on Bitcoin’s “store of value” for its demand. Though Bitcoin transactions may be too expensive for everyday transactions such as buying a cup of coffee, it makes a good bank account. This is due to the fact that Bitcoin is debatably uncorrelated with other asset prices. Many are buying Bitcoin on the assumption that demand for bitcoin from new investors will continue to push its price up. However, at this point, the only thing that will likely push Bitcoin’s price up is more large-scale buying by institutions or individuals.
Oil Prices
Saudi Arabia plans to reverse its recent cut in oil production
In the coming months, Saudi Arabia plans to increase its oil production, a reversal of its recent cut in production. This is a sign of growing confidence in an oil-price recovery. Oil markets were surprised last month when Saudi Arabia, the world’s largest oil exporter, cut 1 million barrels a day of crude oil production. This cut was made in an effort to raise oil prices. Now, as Saudi Arabia plans to reverse its decision and increase production, there is growing confidence that oil prices will recover. Their decision to cut production was planned to be in effect until March, so this rise in price and production likely won’t be seen until April. Saudi Arabia has warned that its plans to increase oil output could be changed in circumstances change as well. Saudi Arabia also has not communicated this plan to the Organization of the Petroleum Exporting Countries (OPEC) either. Prince Abdulaziz bin Salman warns that though they are in a better place in terms of oil and price, there is still lots of uncertainty and Saudi Arabia has to be cautious with its plans. This week, oil prices returned to levels that were not seen since the COVID-19 pandemic began in early 2020. However, there is still much uncertainty, resulting in the caution taken by Saudi Arabia.
COVID-19 Vaccine Stocks
Insiders at COVID-19 vaccine makers such as Pfizer and Moderna sold nearly $500 million of stock last year. Executives and insiders at these companies have repeated the biggest rewards from the production of the vaccine. In 2020, more than 8.5 million shares were sold. While in 2019, only around 4.7 million shares were sold. Much of these sales came from one company, Moderna, which manufactured one of the two vaccines authorized for use in the United States. Executives and a director at Modern sold more than $321 million worth of their stock in over 700 different transactions, making up most of the stock sales. Companies such as Pfizer, Merck, and Novavax also made up this $500 million in sales of stock. Some of these sales have drawn the attention of government officials, with the head of the Securities and Exchange Commission calling for new restrictions on the trading plans under which many of the sales were made. However, some say that this aggressive selling behavior is not unusual for companies that have seen dramatic growth. Some of the selling was established before the pandemic, however, most was done while the vaccine was in development. There is debate on whether or not it is ethical for executives at pharmaceutical companies such as these to reap the benefits of a vaccine. There is also debate if tighter restrictions in buying and selling securities for insiders of a company are needed. In response, Novavax has released a statement claiming its executives adhered to laws of company stock sales. While a spokesman for Moderna also claimed all executive sales are made under 10b5-1 trading plans, which are passive investment schemes that allow corporate insiders to buy and sell company stocks.
Retail Sales
Retail sales rose nearly 5.3% after months of decline in 2020
On the path to economic recovery in the United States, retail sales have risen strongly with stimulus checks in January. On Wednesday, February 17th, the government has said that retail sales rose 5.3% in January from the month before. Manufacturing output has also nearly reached pre-pandemic levels. Though the COVID-19 pandemic is still affecting the economy and the recent winter storm is also causing disruptions, this growth is a good sign for the U.S. economy. Government stimulus, as well as eased COVID-19 restrictions on businesses, has contributed to this growth. Consumer spending has also been described by economist James Knightley for the Wall Street Journal as “firing on all cylinders.” This increase in retail sales comes after three months of a decline during the holiday season. Spending across the board, such as at bars and restaurants, has also been rising. The Federal Reserve Bank of Atlanta has predicted that the economy will grow 9.5% annually in the first quarter. This is more than double the 4.5% estimate from a week ago. All these signs point in a positive direction for the U.S. economy and it seems to be on the way to recovery.
Works Cited
Ansari, Talal, and Katherine Blunt. “New Winter Storm Threatens Fragile Power Grids in Texas, Other Parts of U.S.” The Wall Street Journal, Dow Jones & Company, 17 Feb. 2021, www.wsj.com/articles/new-winter-storm-threatens-fragile-electrical-grids-in-texas-other-parts-of-u-s-11613588298?mod=hp_lead_pos1.
Faucon, Benoit, and Summer Said. “WSJ News Exclusive | Saudi Arabia Set to Raise Oil Output Amid Recovery in Prices.” The Wall Street Journal, Dow Jones & Company, 17 Feb. 2021, www.wsj.com/articles/saudi-arabia-set-to-raise-oil-output-amid-recovery-in-prices-11613570923?mod=hp_lead_pos6.
Morris, David Z. “This Isn't the $50,000 Bitcoin You're Looking For.” Fortune, Fortune, 17 Feb. 2021, fortune.com/2021/02/17/this-isnt-the-50000-bitcoin-we-predicted/.
Pacheco, Inti. “Insiders at Covid-19 Vaccine Makers Sold Nearly $500 Million of Stock Last Year.” The Wall Street Journal, Dow Jones & Company, 17 Feb. 2021, www.wsj.com/articles/insiders-at-covid-19-vaccine-makers-sold-nearly-500-million-of-stock-last-year-11613557801?mod=hp_lead_pos3.
Torry, Harriet. “U.S. Retail Sales Rose Strongly on Stimulus in January.” The Wall Street Journal, Dow Jones & Company, 17 Feb. 2021, www.wsj.com/articles/us-economy-january-retail-sales-coronavirus-recovery-11613503145?mod=hp_lead_pos2.
“Winter Storm Amplifies Power Grid Inequalities for Disadvantaged Texans.” The Guardian, Guardian News and Media, 17 Feb. 2021, www.theguardian.com/us-news/2021/feb/17/texas-winter-storm-power-outages.