On Friday, the Intergovernmental Panel on Climate Change (IPCC) — a group of hundreds of scientists and representatives of 113 governments—issued a bleak report on climate change, indicating that it was ‘likely’ man-made.
[Source: This image shows the instrumental record of global average temperatures as compiled by the Climatic Research Unit of the University of East Anglia and the Hadley Centre of the UK Meteorological Office]
The panel predicted that this climate change would result in temperature rises of 2-11.5 degrees Fahrenheit by the year 2100.
On sea levels, the report projects rises of 7-23 inches by the end of the century. An additional 3.9-7.8 inches are possible if recent, surprising melting of polar ice sheets continues. [Press Conference Webcast]
The conclusions came after a three-year review of hundreds of studies of clues illuminating past climate shifts, observations of retreating ice, warming and rising seas, and other shifts around the planet, and a greatly expanded suite of supercomputer simulations used to test how earth will respond to a building blanket of gases that hold heat in the atmosphere.
“People experience the harshest effects of global warming through extreme weather — heat waves, droughts, floods, and hurricanes,” said study co-author Philip Jones of Britain's University of East Anglia. Those [events] have increased significantly in the past decade and will get even worse in the future.”
Given all the dire predictions, why is the 10Q Detective optimistic?
Looking at the trading history of the market (re-constructed into a yearly logarithmic chart), we see that good times for investors—when the DJIA trends higher—seem to correlate with spikes in global temperatures. The warmer the air temperature variations—the better the performance in the DJIA!
Ergo, greenhouse gases are good for Wall Street. If scientists at the IPCC are correct, this bull market still has legs.