“Lehman Event” Looms For Europe As Energy Companies Face $1.5T In Margin Calls
Excerpt:
European energy companies are facing margin calls of a total of $1.5 trillion in the derivatives market and many would need policy support to cover them amid wild swings and skyrocketing gas and power prices, an executive at Norway’s energy major Equinor told Bloomberg on Tuesday. According to Helge Haugane, Equinor’s senior vice president for gas and power, the $1.5-trillion estimate is even “conservative”.
Liquidity at energy firms is drying up as many companies have started to struggle to meet their margin calls on the energy derivatives market.
“If the companies need to put up that much money, that means liquidity in the market dries up and this is not good for this part of the gas markets,” Equinor’s Haugane told Bloomberg.
Some countries in the EU have already decided to set up funds to avoid a collapse of their energy derivatives markets. Finland and Sweden put out plans this weekend to support their energy companies trading in the electricity derivatives markets, looking to avoid a “Lehman Brothers” event in their respective energy industries and financial systems.
“This has had the ingredients for a kind of a Lehman Brothers of energy industry,” Finland’s Minister of Economic Affairs, Mika Lintila, said on Sunday, as carried by Reuters, commenting on the energy crisis in Europe.
The crisis deepened after Russia said on Friday that the Nord Stream gas pipeline to Germany would remain closed indefinitely, and blamed on Monday the Western sanctions for this situation.
Finland discussed stabilization measures required in the electricity derivatives market, and a proposed central government scheme “is a last-resort financing option for companies that would otherwise be at risk of insolvency,” the Finnish government said in a statement on Sunday.
Finland will look to set up a loan and guarantee scheme of up to $9.92 billion (10 billion euro), under which the State may grant loans or guarantees to companies engaged in electricity production in Finland.
In neighboring Sweden, the government proposed state credit guarantees to mainly electricity producers trading in the market for electricity derivatives. The total amount of required collateral in the market has since June increased from about $6.5 billion (70 billion Swedish crowns) up to about $16.6 billion (180 billion crowns), the government said.
“The purpose of the measure is to prevent that the lack of liquidity could create risks for contagion to other parts of the financial system,” Sweden’s Finance Ministry said.
YEAH! somebody does an excerpt and a link! FINALLY!!
It’s like a contest of people trying to make their posts more important by posting five pages. Thanks for the effort seriously.
Why is the World Economic Forum in Missouri?
https://www.semissourian.com/story/2962023.html
https://www.globalshapers.org/
Excerpt:
Cape Girardeau, Missouri is home to one of the World Economic Forum’s newly-formed hubs of its Global Shapers Community.
The small town of Southeast Missouri is hub No. 481 in the world.
Global Shapers Community’s mission: “We believe in a world in which young people are central to solution-building, policy-making and lasting change.”
“If there was ever a time in which strengthening local communities and empowering youth leaders were paramount, now is that time,” said Klaus Schwab, founder and executive chairman of the World Economic Forum and the Global Shapers Community.
Awareness started with Kalyan Gautham, age 31, who relocated to Cape Girardeau with his start-up, WATT, recipient of last year’s 1st50K from Codefi. It was always his passion to connect with globally-minded people and joining Global Shapers in Bangalore, India, changed his world.
“I would travel the world as a business consultant and be immediately welcomed into vibrant communities through Global Shapers, all seeking to make a difference,” Gautham said.
When relocating to Cape Girardeau, Gautham learned the Global Shapers community had yet to start a hub in Missouri. The closest chapters are in Nashville and Chicago.
Missing the caused-based camaraderie, Gautham explored starting a hub, literally putting Cape Girardeau and Missouri on the map for World Economic Forum and Global Shapers.
“Having lived in the UK, Dubai, Manila, Hong Kong and Singapore, I have always been involved in social initiatives through Global Shapers, contributing to a greater cause,” Gautham said. “For me, members of Global Shapers are like family. And I wanted to bring that experience and opportunity to Cape Girardeau.”
It was a challenge for a city more rural than others in the network. To succeed, Gautham knew he needed help. Enter Courtney Cannell.
Cannell relocated to Cape from Portland with her own startup opportunity. Having lived abroad in Ecuador and Peru, she also worked for the government of Spain on immigration issues and with U.S. Senator Jeff Merkley in Oregon, which were precursors to her move to Cape and quest for a cause-based community.
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They are infesting America in places unexpected like Cape Girardeau, Mo. Fascists disguised as liberals.