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Deutsche Bank Warns That The U.S. Economy Could Slip Into Recession; A Solar Storm Arrives On Earth; More Companies Attempt To Harness Tidal Energy. Aired 4-4:10a ET
Aired April 07, 2022 - 04:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CARL AZUZ, CNN 10 ANCHOR: It makes sense that around the time of spring break, we would have stories of sun, sand and squid on today`s show. That`s
coming up in just a couple minutes. I`m Carl Azuz.
And we begin with a warning sign. A major international bank is predicting that a recession could be on the horizon for the United States. What, when
and why is how we`ll break this down.
The "what" is a potential recession itself. It`s defined as a period of decreased economic activity when a nation`s gross domestic product
contracts or shrinks. The effects of a recession might include fewer retail sales, less manufacturing, lower income and more people without jobs.
The organization predicting this is Deutsche Bank. It`s a corporation based in Germany that has a network in 58 countries from Europe to America to
Asia. It`s the first major financial institution that`s predicting a recession in the U.S. though some other economic groups have said chances
are growing for one.
When would this hit? Deutsche Bank says probably between late next year and early 2024, though it adds there`s, quote, considerable uncertainty about
the timing and how bad the recession might be.
So is this doom and gloom? Not necessarily. The bank thinks the potential recession will be mild, lasting a relatively short time. It may be a matter
of months with an unemployment rate of more than percent hitting in 2024. For perspective, the current rate, the percentage of American workers who
don`t have jobs is 3.6 percent.
Why would any of this happen? Inflation, the rapid rise in prices for the things we buy has grown by its fastest pace in 40 years. Economic experts
think prices will probably stay high for the foreseeable future.
There is a tool that America`s central bank has to try to reduce inflation. The Federal Reserve can raise interest rates which makes it more expensive
to borrow money and that can help lead to price decreases.
But there are side effects to that. Deutsche Bank says because inflation is so high, it thinks the fed will raise interest rates so quickly, that it`ll
slam the brakes on economic growth and put the U.S. into recession.
Again, none of this is certain, but the bank thinks all of these events will align in the years ahead.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: So, what`s the difference between a recession and a depression? It comes down to how long
the economy contracts.
A recession is typically defined as two negative quarters of economic growth and as part of the normal business cycle. The U.S. economy has
fallen into recession more than 30 times since 1854.
A depression is something vastly different. It happens when the economic decline is sustained and might potentially go on for years. That`s only
occurred once in American history in 1929, and it lasted 10 years. Because it lasts so long, a depression is more severe.
A decade ago, unemployment hit percent during the worst of the Great Recession. But during the Great Depression, the jobless rate peaked at
nearly 25 percent.
(BEGIN VIDEO CLIP)
AZUZ (voice-over): Ten-second trivia:
Which word can describe a thread-like object or a plasma extension on the sun?
Firmament, fragment, filament or figment?
Filament is the answer and it factors into a recent solar storm.
(END VIDEO CLIP)
AZUZ: Regardless of what the weather outside is like where you`re watching, we are all being hit by a solar storm. A coronal mass ejection
from a filament lifted off the sun on March 3rd, according to the U.S. government and the effects of this were predicted to hit the Earth on
Wednesday and Thursday.
So what does that mean? Hopefully not much. Even though solar storms can cause problems on Earth by disrupting GPS, satellites and the power grid,
the one hitting now is relatively minor. It`s classified as a G1 on a scale from G1 to G5 with the "G" standing for geomagnetic and the one being the
weakest classification on the NOAA Geomagnetic Storm Scale.
So why and how are scientists keeping up with these events?
RACHEL CRANE, CNN CORRESPONDENT: Solar storms have been known to cause all kinds of trouble disrupting flights and power grids sounds kind of scary.
So how worried should we actually be?
The weather on the sun is a little different than the weather here on earth. It consists of solar wind, solar flares and coronal mass ejections,
which are these giant bubbles of plasma and magnetic fields from the sun that send high-speed particles into space. These storms can last a few
minutes or several hours. And even though they`re happening over 90 million miles away, they`re so powerful that their effects can linger in our
magnetosphere and atmosphere for days or weeks.
If directed at earth, these flares and CMEs create geomagnetic storms that then dazzle us with spectacular auroras. But that`s the fun part. Beyond a
light show, these solar storms can harm most modern-day technology, like satellites communication systems, power grids and airplanes. They can make
airplanes disappear from radar detection and cause major blackouts.
In 1989, a solar storm caused a blackout in Canada that left 6 million without power for 12 hours. While our technology is at the mercy of these
solar storms, our bodies are not. That`s because the Earth`s atmosphere shields us from harmful radiation.
But astronauts who are traveling through space won`t be as lucky. Shielding astronauts from the space weather is something NASA is working on right now
to make sure our astronauts are safe and shielded on future deep space missions.
But back here on Earth, there`s a facility in Boulder, Colorado, that monitors the sun`s forecast. It`s called the Space Weather Prediction
Center. So by getting ahead of the space weather, we can better protect our technology.
AZUZ: The second of two reports from CNN`s Rachel Crane today takes us out to sea. Tidal energy is a relatively new form of power production. The
publication `NS Energy" says it`s possible it could damage marine life or change shorelines and it has to be built close to land because it relies on
powerful currents to generate energy.
Also, not everyone supports using taxpayer dollars to subsidize or support green energy, but the technology is moving forward.
CRANE (voice-over): For decades, wind and solar have been the centerpieces of green energy. But the ocean`s ever constant waves and tides are also
rich with renewable power that has remained largely untapped.
Off the coast of Scotland, Orbital Marine Power is one of the companies trying to change that. Its jumbo jet size floating platform called the O2
has two giant rotors that sit 60 feet below the surface of the water and can harness the energy of the ocean`s tides.
ANDREW SCOTT, CEO, ORBITAL MARINE POWER: It`s kinetic energy. So the bits of technology that generate the power look not too different to a wind
CRANE: But unlike wind turbines that have to accommodate for wind coming from all directions, the O2 only needs to capture energy from two.
SCOTT: You have a flood tide when the tide comes in, you have an ebb time when the tide goes out.
CRANE: And tides are far more reliable than wind.
SCOTT: You can predict those motions years and decades into advance.
CRANE: This is orbital`s third tidal turbine system to be connected to the U.K. national grid for testing since 2012. This latest design features
rotors that can lift out of the water for easier access for repairs. The company says one O2 unit generates up to megawatts which it says is enough
to power around 2,000 homes a year.
TREY TAYLOR, FOUNDER, VERDANT POWER: Think of what Verdant Power`s doing at Roosevelt Island in New York City is what the Wright Brothers did at
CRANE: In the U.S. Verdant Power`s tri-frame system operates at the bottom of the East River, which is actually a tidal strait. It`s in a pre-
commercial phase but actively delivers power to New York City`s electric grid.
TAYLOR: The potential for marine energy is something like 250 gigawatts around the world and that`s just tidal. Doesn`t include rivers or large
canals. So you can see the potential for the applications not only our technology but competitors as well. I mean, there`s lots of room and we
really hope our competitors succeed too for the sake of the industry, but we`ve got to get our costs down.
CRANE: Right now, the high cost of building, operating and maintaining tidal power technology means that tidal energy comes at a premium. But
government investment could play a vital role in driving the price tag down.
TAYLOR: In the U.K., there are economic incentives. We`re counting on those for our first commercial projects as we start mass producing the
technology we`re going to pivot from the U.K. and right back to North America, Alaska, New York, Canada, tremendous water currents everywhere to
AZUZ: Squid have been known to change color in the wild, likely to avoid being seen and eaten. But could they be observed doing this in captivity.
The answer as you can see is yes.
Scientists at a lab in Japan noticed that while they were cleaning out the squid tank, the cephalopods appeared to be different colors depending on
whether they were near the algae. One experiment later, a climactic chameleon color conversion was quickly confirmed.
Some of you might be hoping I`ll just squid while I`m ahead. You know, squidaddle before I start squiding around. Just because I love puns doesn`t
mean I`m calimarried to them. But whether you`re streaming the show or watching the cephalopodcast, you know I like to drop a few or a plankton of
them because they`re totally tubular and tasteful to a wide array of palate.
Staples High School in Westport, Connecticut -- shout-out to you for subscribing and leaving a comment on our YouTube channel.
I`m Carl Azuz for CNN 10.