Daily Archives: November 11, 2021

So where’s Europe’s real source of strength?

By Justin Urquhart Stewart – We are all familiar with the large political behemoths that dominate our globe, not just in terms of political influence, but also through their financial strength. The United States, although having a federal structure, has power centered very clearly on Washington. The same would apply to the other superpower, namely China, albeit under a completely different totalitarian political system. As events in Hong Kong have so perfectly illustrated, any thought of an alternative political view or opinion, let alone action, will not be tolerated.

We should also mention Russia, who although no longer a superpower, is still formidable and a potentially dangerous entity. By way of illustration, the value of the entire economy of this geographical giant, as measured by its GDP (Gross Domestic Product) is less than half of that of Germany. It, too, despite nominally titling itself as a democratic nation, is quite obviously under a firm central system of Putin’s command and control.

These three, therefore, stand in great contrast to the real strength and opportunity supplied by the structure of the EU. Since its birth back in the 1950s, some have desired and dreamt of creating an alternative to the US via “a United States of Europe”, with a similar centralized strength and concentration of power in order to combat those other leviathans. more>

Updates from McKinsey

The energy transition unfolds
The transition to zero-carbon energy isn’t going to be a single shift, but a set of interrelated, system-level shifts. What will it take to get things moving quickly toward net-zero emissions?
McKinsey –  Decarbonizing the world’s economy will largely be a matter of overhauling the global energy system. And the necessary changes made to policies, technology, finance, and business models will affect the way that all individuals and all institutions produce and use energy.

Today McKinsey convened leaders from different points in the energy system to share observations on the state of the energy transition and the factors that might accelerate it. A few of the comments made during the session, edited for clarity, appear below. A full replay of today’s session can be found here.

Charting green hydrogen’s path to affordability: “The starting point is stone age: little [electrolyzer] units made by hand welding and hand cutting. The minute we are able to automate a process, with robotic welding machines and long factories assembling fast, phenomenal scale will come in. In renewable energy, the price has come down. Producers still need to bring down the cost of the electrolyzer and the balance of the system. We are very confident. … There is no reason why green hydrogen cannot end up competing with gray hydrogen. No reason whatsoever.”
—Paddy Padmanathan, president and CEO, ACWA Power

Rethinking the financial risk of new technologies: “We’ve had a long period when the perceived risk associated with new solutions for the climate problem has been higher than it really is. Now we’re starting to get to a point where that is tipping. It’s becoming obvious how carbon capture and storage, hydrogen, and direct-air capture are fitting into the climate equation. And therefore finance can start to factor them into credible transition pathways for clients.”
—Zoë Knight, managing director and group head, Centre of Sustainable Finance, HSBC more>

Updates from Ciena

How bold hardware and software innovations are changing the game in optical networking
How are hardware and software advancements helping network operators solve key challenges they face today?
By Paulina Gomez – Communications have come a long way since Western Union took the bold step of implementing the first transcontinental electric telegraph system in October of 1861. Fast forward 160 years and optical networks across the globe are what lay the foundation for modern communications and the way we live, work and play.

Keeping pace with today’s “new normal” customer demands for always-on, anywhere, reliable connectivity requires innovative technologies to deliver open, scalable, and programmable networks, that include next-gen coherent modems to drive down the cost of transport and reconfigurable open line systems, to be able to quickly adapt to changing customer requirements.  However, evolving towards a smarter optical network also requires leveraging advanced analytics with intelligent software automation to not only drive operational simplicity but also actionable insights based on what is happening in the network.

As our customers evolve to more open, programmable, and automated networks they need the right analytical tools at their fingertips to be able to extract the full value of their deployed network assets across all stages of the photonic network lifecycle. Paving the path towards a smarter optical network starts with an SDN domain controller like Ciena’s Manage, Control and Plan (MCP), that lays the foundation for multi-layer, automated, lifecycle operations. Advancements in hardware and software are also required to give more control to end-users so that they can fully operationalize and realize the benefits associated with a modernized network. Let me explain further: more>

Are Policymakers Being Too Patient on Inflation Risk?

The Fed is modestly tapping the brakes on monetary stimulus, but will it do enough to cool a stock market that may be at risk of overheating?
By Lisa Shalett – The Federal Reserve last week made its highly anticipated announcement on “tapering” its asset purchases, the first step in pulling back on the unprecedented support it provided markets and the economy early in the pandemic. Later this month, the Fed will begin reducing its $120 billion-per-month asset-buying program by $15 billion a month.

In his announcement, Fed Chair Jerome Powell largely kept to the script, hitting consensus expectations spot-on regarding the pace of tapering. Powell also acknowledged that the risk of inflation may not be as transitory as the Fed had anticipated earlier this year. But he left interest rate hikes for another day, stressing patience as well as a need for the job market to get back to “maximum employment” before any hikes took place. Stocks rallied to yet more new highs in response to the broadly dovish communique.

Although the Fed is working with some uncertainty around policy choices, we are concerned that the Fed’s emphasis on patience remains disconnected from actual economic data, which could possibly result in policymaking that’s late in raising rates to tame inflation. Consider the following points:
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