We take one more look at the developing story around PG&E. Barron's writer Alexandra Scaggs joins Behind the Idea to discuss the moving parts, including the latest boost to the shares from a Citigroup research note. We also discuss the gaps in modern markets around climate change and flood insurance, the political influence that might come to bear, and whether the claims bill is going to overwhelm everything else.
Topics covered:
3:00 minute mark - What's in the Citi note that led to the pop this week, and how this is a very 2019 story. 6:00 - Is this the first climate change event in the markets, and what about the political climate change? 10:00 - The other major unknowns - stress tests around the claims payouts and the tax payer/government/utility/market interplay. 15:00 - At some point the claims have to be paid; how is that not coming out of the equity? 21:00 - Sussing out the Baupost Group and BlueMountain positions, and the insurance/re-insurance market 26:30 - The role and limits of markets in the climate change arena 30:00 - What can PG&E say on their earnings call to elucidate this situation?
