Day: June 8, 2018

Argentina Clinches $50B IMF Financing Deal to Speed Up Cuts

By Uponbiz | | No Comments | Business

Argentina and the International Monetary Fund said Thursday that they had reached an agreement for a three-year, $50 billion standby lending

arrangement, which the government said it sought to provide a

safety net and avoid the frequent crises of the country’s past.

Argentina requested IMF assistance on May 8 after its peso currency weakened sharply in an investor exodus from emerging markets. As part of the deal, which is subject to IMF board approval, the government pledged to speed up plans to reduce the fiscal deficit even as authorities now foresee lower growth and higher inflation in the coming years.

The deal marks a turning point for Argentina, which for years shunned the IMF after a devastating 2001-02 economic crisis that many Argentines blamed on IMF-imposed austerity measures. President Mauricio Macri’s turn to the lender has led to protests in the country.

“There is no magic. The IMF can help but Argentines need to resolve our own problems,” Treasury Minister Nicolas Dujovne said at a news conference.

Dujovne said he expected the IMF’s board to approve the deal during a June 20 meeting. After that, he said, he expects an immediate disbursement of 30 percent of the funding, or about $15 billion.

Argentina will seek to reduce its fiscal deficit to 1.3 percent of gross domestic product in 2019, down from 2.2 percent previously, Dujovne said. The deal calls for fiscal balance in 2020 and a fiscal surplus of 0.5 percent of GDP in 2020.

“This measure will ultimately lessen the government financing needs, put public debt on a downward trajectory and, as President Macri has stated, relieve a burden from Argentina’s back,” IMF Managing Director Christine Lagarde said in a statement.

Higher inflation, for now

Speaking alongside central bank governor Federico Sturzenegger, Dujovne noted that the agreement was well above Argentina’s IMF quota. A minimum $20 billion had been expected based on Argentina’s quota.

The interest rate will be from 1.96 to 4.96 percent, depending on how much Argentina uses. The South American country must pay back each disbursement in eight quarterly installments, with a three-year grace period.

As widely expected, the government will also send a proposal to Congress to reform the central bank’s charter and strengthen its autonomy. The central bank will also stop transferring money to the treasury, a practice known locally as the “little machine” that is seen as a major driver of incessant

inflation.

“The little machine has been turned off. It has been unplugged,” Sturzenegger said.

The IMF’s backing was expected to boost Argentine assets, which have sagged in recent months amid a global selloff in emerging markets.

Neighboring Brazil, Latin America’s largest economy, has also seen its currency weaken in recent days to its lowest level in more than two years on fears about the county’s fiscal outlook and political future.

“It is convincing and greatly exceeds expectations. Markets should react very positively tomorrow,” Miguel Kiguel, a former Argentine finance secretary who runs local consultancy Econviews, said in a Twitter post. “It is clear the country has capacity to pay.”

But the short-term economic picture for Argentina remains more complicated than it appeared several months ago. Dujovne said economic growth was expected at 1.4 percent for 2018 and between 1.5 percent and 2.5 percent for 2019, down from prior expectations above 3 percent in both years.

The central bank will also abandon its 2018 inflation target of 15 percent and will not target any particular level this year, Sturzenegger said. Argentina agreed to new, looser inflation targets of 17 percent for 2019, 13 percent for 2020 and 9 percent for 2021, down from 25 percent currently.

“They are mortgaging the future for our children and grandchildren,” Martin Sabbatella, a politician aligned with former populist President Cristina Fernandez, wrote on Twitter.

Both Argentina and the IMF said the deal would protect the most vulnerable.

In a separate statement, the president’s office said it had clinched agreements for an additional $5.65 billion from the Inter-American Development Bank, the World Bank and the CAF development bank over the next 12 months.
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Scientists Say Cost of Sucking Carbon from Thin Air Could Tumble

By Uponsil | | No Comments | Silicon Valley

High costs of extracting greenhouse gases from thin air could tumble with new technologies that can help to combat climate change, scientists said on Thursday.

Carbon Engineering, a Canadian-based clean energy company, outlined the design of a large industrial plant that it said could capture carbon dioxide from the atmosphere at a cost of between $94 and $232 a ton.

That is well below past estimates of about $600 a ton by the American Physical Society, said David Keith, a Harvard University physics professor and the founder of Carbon Engineering who led the research.

“I hope to show that this as a viable energy industrial technology, not something that is a magic bullet … but something that is completely doable,” he told Reuters of the peer-reviewed study published in the journal Joule.

Carbon Engineering, which has about 40 employees and produces about a ton of carbon dioxide a day from an experimental plant. The technology makes synthetic fuels using only air, water and renewable power.

Keith said an industrial-scale plant could make fuel at a dollar a liter. That would be competitive in California, where low carbon fuel standards to cut pollution from cars and trucks mean high prices.

He said some investors were interested. An industrial plant, costing hundreds of millions of dollars, could capture a million tons of carbon dioxide a year, equivalent to emissions by 250,000 cars.

Other experts welcomed the study as a step to clear up huge uncertainties about the costs of “direct air capture.”

U.N. reports indicate that governments may have to deploy such novel technologies this century to remove carbon from nature and bury it to limit global warming under the 2015 Paris climate agreement.

“Direct air capture is a politically promising route for carbon dioxide removal,” said Oliver Geden, of the German Institute for International and Security Affairs.

And an air capture plant could be built almost anywhere. It would not threaten farmland, unlike options of planting vast forests which soak up carbon dioxide, he said.

Climeworks, a Swiss company and Carbon Engineering’s main rival, also told Reuters it was hoping to cut its production price to $100 a ton in the next 5-10 years, from about $600 now. It sells carbon dioxide to greenhouses as an airborne fertilizer to grow tomatoes or cucumbers.

Jan Wurzbacher, a founder of Climeworks, said more and more governments are likely to jack up penalties on carbon emissions to limit floods, storms and rising seas in coming years, making the technology more viable.

The World Bank says Sweden has the highest carbon taxes, currently 1,150 Swedish crowns ($133) a ton.
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Theater Club at NASA Center Gives Scientists Creative Outlet

By Uponent | | No Comments | Entertainment

By day, she’s a cryogenics engineer at NASA’s Goddard Space Flight Center, where she works on what she calls a “baby step toward a mission to Mars.” By night, she participates in Goddard’s Music and Drama Club, often known as MAD. She played keyboard for the club’s spring musical.  

“The work here can get very intense,” said Breon, a 30-year NASA veteran. “We did our thermal vacuum testing a couple of months ago, and it was an around-the-clock, 24/7 operation.” 

The club members include scientists, engineers and managers who work for NASA on projects including weather satellites and space telescopes, and they say the club is a creative outlet for them.  

“We’ve got more engineers per square foot than any other theater group around,” said Randy Barth, who directed the club’s latest musical, “Weird Romance.”

MAD has staged at least one show a year at Goddard since 1970, from “Oklahoma!” and “The Sound of Music” to science-fiction fare. Club members say it helps them with their day jobs and shows the public another side of scientists at the sprawling flight center northeast of Washington.

Astrophysicist Kim Weaver is the club’s president. Doing theater helps her connect with people who aren’t scientists, she says.  

“When I say I’m an astrophysicist, I usually get a blank stare. So in order to get (people) to actually open up and smile at me, I then say I also do theater, because that’s the part that they think is cool,” Weaver said. “You say you’re a scientist, and I think that scares people. They think they can’t talk to you.”

She was a graduate student intern when she saw a flyer about the club’s auditions for “Sweet Charity.” Making the show was what led her to take a job at Goddard. 

“It really helped improve my chances, even in my career,” Weaver said. “I met some more senior astronomers who later on down the line were able to help steer me and guide me in my career path.”

“Weird Romance’” combines science and drama.  

In the first act, “The Girl Who Was Plugged In,” a corporate mogul creates his own celebrity using a beautiful, artificial body that is controlled by a homeless woman. 

The second, “Her Pilgrim Soul,” was adapted from a “Twilight Zone” episode. In it, a projector shows holographic images of a woman that were not programmed into it, to the surprise of the scientists involved. 

One of the production’s stage directions describes a character as having “a smile that could melt frozen methane.” 

Breon considered that a good omen, since her job actually involves melting frozen methane. 

“We have to do more than smile at it, though,” she joked. 
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