After a disastrous 2017, General Electric Co. kicked off this year with the best start on the Dow Jones Industrial Average. The question is whether the gains will last.
With no major developments specific to the company, the shares probably got a boost from investors anticipating a rebound after last year’s selloff, said Deane Dray, an analyst with RBC Capital Markets. While that’s a welcome respite for long-suffering shareholders, GE still faces an arduous turnaround effort.
“There is this reflexive dogs-of-the-Dow bias,” Dray said. “There are still too many negatives and unknowns to give anyone the clear signs that the worst is behind them.”
GE is grappling with weakness in the markets for its power-generation and oilfield equipment, and Chief Executive Officer John Flannery is selling assets and cutting billions of dollars in costs. The manufacturer is also contending with a pension deficit and challenges from a long-term-care insurance portfolio.
But at least for the holiday-shortened first week of the year, GE gave off a faint glimmer of its former stock-market glory. Shares gained 6.2 percent, their biggest weekly increase in more than a year. That followed last year’s 45 percent plunge, which wiped out $128 billion in shareholder value and was the worst drop on the Dow.
GE is likely to rise 10 percent in the next 12 months, according to the average of analyst estimates compiled by Bloomberg. It should at least get a boost from broad economic health, said Nicholas Heymann, an analyst with William Blair & Co.
“The macro environment for the global industrial economy is shaping up in 2018 to perhaps be the best so far this century,” Heymann said in a report Thursday. Rising oil prices and strength in commercial aerospace are likely to lift sentiment for GE this year after a “horrendous 2017,” he said.
“We sense forward expectations have been taken down to the level where they can be achieved in a ‘sleep-walking’ environment,” Heymann said. Still, the turnaround “will require an endless amount of heavy lifting.”
GE still needs to demonstrate its ability to reduce its pension deficit, improve cash flow and pull off asset sales, Heymann said. Dray pointed to pending reserve charges related to long-term-care insurance as another concern. GE has been studying the impact of that on the finance business and announced that dividends paid by GE Capital to the parent would be suspended as a result.
The Boston-based manufacturer will announce its fourth-quarter earnings Jan. 24 and may provide additional details on expectations for the year.
Growth must go on and its destroying the Earth. But theres no way of greening it. So we need a new system, writes Guardian columnist George Monbiot
Everyone wants everything how is that going to work? The promise of economic growth is that the poor can live like the rich and the rich can live like the oligarchs. But already we are bursting through the physical limits of the planet that sustains us. Climate breakdown, soil loss, the collapse of habitats and species, the sea of plastic, insectageddon: all are driven by rising consumption. The promise of private luxury for everyone cannot be met: neither the physical nor the ecological space exists.
But growth must go on: this is everywhere the political imperative. And we must adjust our tastes accordingly. In the name of autonomy and choice, marketing uses the latest findings in neuroscience to break down our defences. Those who seek to resist must, like the Simple Lifers in Brave New World, be silenced in this case by the media.
With every generation, the baseline of normalised consumption shifts. Thirty years ago, it was ridiculous to buy bottled water, where tap water is clean and abundant. Today, worldwide, we use a million plastic bottles a minute.
Every Friday is a Black Friday, every Christmas a more garish festival of destruction. Among the snow saunas, portable watermelon coolers and smartphones for dogs with which we are urged to fill our lives, my #extremecivilisation prize now goes tothe PancakeBot: a 3D batter printer that allows you to eat the Mona Lisa, theTaj Mahal, or your dogs bottom every morning. In practice, it will clog up your kitchen for a week until you decide you dont have room for it. For junk like this, were trashing the living planet, and our own prospects ofsurvival. Everything must go.
The ancillary promise is that, through green consumerism, we can reconcile perpetual growth with planetary survival. But a series of research papers reveal there is no significant difference between the ecological footprints of people who care and people who dont. One recent article, published in the journal Environment and Behaviour, says those who identify themselves as conscious consumers use more energy and carbon than those who do not.
Why? Because environmental awareness tends to be higher among wealthy people. It is not attitudes that govern our impact on the planet but income. The richer we are, the bigger our footprint, regardless of our good intentions. Those who see themselves as green consumers, the research found, mainly focused on behaviours that had relatively small benefits.
I know people who recycle meticulously, save their plastic bags, carefully measure the water in their kettles, then take their holidays in the Caribbean, cancelling any environmental savings ahundredfold. Ive come to believe thatthe recycling licences their long-haul flights. It persuades people theyvegone green, enabling them to overlook their greater impacts.
None of this means that we should not try to reduce our footprint, but we should be aware of the limits of the exercise. Our behaviour within the system cannot change the outcomes ofthe system. It is the system itself thatneedsto change.
Research by Oxfam suggests that the worlds richest 1% (if your household has an income of 70,000 or more, this means you) produce about 175 times as much carbon as the poorest 10%. How, in a world in which everyone is supposed to aspire to high incomes, can we avoid turning the Earth, on which all prosperity depends, into a dust ball?
By decoupling, the economists tell us: detaching economic growth from our use of materials. So how well is this going? A paper in the journal PlosOne finds that while, in some countries, relative decoupling has occurred, no country has achieved absolute decoupling during the past 50 years. What this means is that the amount of materials and energy associated with each increment of GDP might decline but, as growth outpaces efficiency, the total use of resources keeps rising. More important, the paper reveals that, in the long term, both absolute and relative decoupling from the use of essential resources is impossible, because of the physical limits of efficiency.
A global growth rate of 3% means thatthe size of the world economy doubles every 24 years. This is why environmental crises are accelerating at such a rate. Yet the plan is to ensure that it doubles and doubles again, and keeps doubling in perpetuity. In seeking to defend the living world from the maelstrom of destruction, we might believe we are fighting corporations and governments and the general foolishness of humankind. But they are all proxies for the real issue: perpetual growth on a planet that is not growing.
Those who justify this system insist that economic growth is essential for the relief of poverty. But a paper in the World Economic Review finds that the poorest 60% of the worlds people receive only 5% of the additional income generated by rising GDP. As a result, $111 (84) of growth is required for every $1 reduction in poverty. This is why, on current trends, it would take 200 years to ensure that everyone receives $5 a day. By this point, average per capita income will have reached $1m a year, and the economy will be 175 times bigger than it is today. This is not a formula for poverty relief. It is a formula for the destruction of everything and everyone.
When you hear that something makes economic sense, this means it makes the opposite of common sense. Those sensible men and women who run the worlds treasuries and central banks, who see an indefinite rise in consumption as normal and necessary, are beserkers: smashing through the wonders of the living world, destroying the prosperity of future generations to sustain a set of figures that bear ever lessrelation to general welfare.
Green consumerism, material decoupling, sustainable growth: all areillusions, designed to justify an economic model that is driving us to catastrophe. The current system, basedon private luxury and public squalor, will immiserate us all: under this model, luxury and deprivation areone beast with two heads.
We need a different system, rootednot in economic abstractions butin physical realities, that establishthe parameters by which we judgeits health. We need to build a world in which growth is unnecessary, aworld of private sufficiency and publicluxury. And we must do it beforecatastrophe forces our hand.
The killing of two activists who successfully campaigned to shut down a mine has shocked environmentalists in Turkey who fear their deaths will embolden others to kill to protect their profits
Cedar branches whisper in the Anatolian breeze. Twigs crunch underfoot. A truck rumbles from a distant marble quarry. The crack of a hunters rifle echoes through the forest.
The sounds of tranquility and violence intermingle at the remote hillside home of Aysin and Ali Byknohutu, the Turkish beekeepers and environmental defenders whose murder in Finike earlier this year has sent a chill through the countrys conservation movement.
If the killings of the retired couple were not shocking enough, the aftermath a dubious judicial investigation and the alleged suicide of the key suspect have raised questions in parliament and the media about the priorities of prime minister Recep Tayyip Erdoan, who increasingly seems to care more about the economy and concrete than lives and the environment.
Ali and Aysin were organic farmers who moved to a remote forest home so that they could be closer to nature after they retired.