Friday, November 30, 2007

The Plan To Destroy OPEC

From EnergyDaily:

Venezuela's Hugo Chavez says he wants to send oil to $200 a barrel. Robert Zubrin has a plan to stop him. In his just released book, Energy Victory: Winning the War on Terror by Breaking Free of Oil, Zubrin, an American aerospace engineer known previously primarily for his inventive approach to Mars exploration, lays out the strategy.

To say the book is remarkable, would be a severe understatement. Combining soaring idealism, incisive thinking, and a viscous go-for-throat killer instinct in a single package, Energy Victory is the first book I have ever read that actually lays out a credible plan to turn around the world energy situation.

Let's talk about the killer instinct first. Zubrin wants to destroy the oil cartel. In fact, I think a better title for this book would have been "The Plan to Destroy OPEC", and "Why We Must". He has Saudi Arabia and Iran dead center in his sights (he even provides an aerial photograph and targeting information of the Iranian oil export terminal on Kharg Island.) The second and third chapters of the book are entitled Terrorism: Your Gas Dollars at Work (Part 1), and Corrupting Washington: Your Gas Dollars at Work (Part 2), respectively.

Backed up by no less than 84 footnotes, the dossiers presented in these two chapters, particularly of Saudi involvement in the promotion of international terrorism and influence peddling in Washington, are forceful and convincing. He also alludes to Iranian bribery of Moscow officialdom, but unfortunately is rather more sketchy in that department. Suffice to say, however, that there are plenty of people in Riyadh and in both parties of the American political establishment who are not going to be happy when they read this book.

Having thus established that there is considerably more at stake in the energy battle than the pump price of gasoline, Zubrin gets down to the matter of how to win it. This is where the incisive thinking comes in, and is, in my view, the best and most valuable part of the book. You see, Zubrin really does have an answer, and as surprisingly simple as it is, I think it just might work.

In a nutshell, his proposal is this: that the American congress should pass a law mandating that all new cars sold in the United States be flex-fueled, which is to say able to run on any combination of gasoline or alcohol fuels. Flex fuel is proven technology which only adds a few hundred dollars to the cost of a car.

In 2007, roughly 90 percent of all cars sold in Brazil were flex-fueled, but outside of that country, their market share was quite low - comprising about 3 percent of US auto sales, for example. However, as Zubrin argues convincingly, if it were mandated that every new car sold in the USA had to be flex fueled as a standard feature, then practically every auto manufacturer in the world would be forced to switch their lines over to flex fuel....MORE

[Greed & Fear] The bizarre nature of America’s GSEs and the coming Asian bubble

From FT Alphaville:

The saga of the big US, government-sponsored mortgage lenders has fired up CLSA’s Christopher Wood this week. In the latest issue of his client newsletter Greed & Fear, Wood muses over the recent “spectacular” declines in the share prices of Fannie Mae and Freddie Mac (latest news in the FT, here and here).

The federal mortgage agencies are a “bizarre mix of private- and public-sector incentives”, says Wood. “They have long borrowed money with an implicit federal government guarantee which investors tend to assume have made their bonds the equivalent of higher yielding Treasury bonds”....

...And in his romp around the world, Wood alights on the bond market, where he describes action as “scarily deflationary”. This makes Wood even more wary of cyclicals geared to external demand in the context of an Asian-equity portfolio. It is also the case that where domestic cyclicals are owned, the place to own them in his view is primarily in India.

It remains a reality that Asia as an asset class is cyclical by nature, notes Wood.

There will clearly be collateral damage in Asian markets if the American slowdown isas severe as suggested by the recent US bond-market rally. But the key long-term point to remember is that Asia and emerging markets will be the next bubble to form globally from the current Fed-easing cycle, which has much further to run. It would seem that 2 per cent is a good place to start for where the fed funds rate is ultimately going to end up in this easing cycle.

In the same series, Buy gold, avoid 'structured excreta'

Professor Haab is Happy-Environmental Economics

He has a flow* experience with this post:

Friday Beer Post

And this one has an environmental twist...

Scientists have found a new threat to the planet: Canadian beer drinkers.

The government-commissioned study says the old, inefficient "beer fridges" that one in three Canadian households use to store their Molson and Labatt's contribute significantly to global warming by guzzling gas- and coal-fired electricity....

Beer, climate and env-econ!
is the mental state of operation in which the person is fully immersed in what he or she is doing, characterized by a feeling of energized focus, full involvement, and success in the process of the activity.

Csikszentmihalyi identifies the following as accompanying an experience of flow:

  1. Clear goals (expectations and rules are discernible and goals are attainable and align appropriately with one's skill set and abilities).
  2. Concentrating and focusing, a high degree of concentration on a limited field (a person engaged in the activity will have the opportunity to focus and to delve deeply into it).
  3. A loss of the feeling of self-consciousness, the merging of action and awareness.
  4. Distorted sense of time, one's subjective experience of time is altered.
  5. Direct and immediate feedback (successes and failures in the course of the activity are apparent, so that behavior can be adjusted as needed).
  6. Balance between ability level and challenge (the activity is neither too easy nor too difficult).
  7. A sense of personal control over the situation or activity.
  8. The activity is intrinsically rewarding, so there is an effortlessness of action.
  9. People become absorbed in their activity, and focus of awareness is narrowed down to the activity itself, action awareness merging (Csikszentmihalyi, 1975. p.72).

Not all are needed for flow to be experienced.

Home wind turbines in UK warming the planet

Also from Reuters:

Many wind turbines mounted on homes in British cities are contributing to global warming, not fighting it, according to a new study.

And although many environmentally-friendly homeowners also hope to cut their bills by generating their own power, most micro-turbines will never save as much money as the equipment costs, according to the study by the Building Research Establishment Trust....MORE

Investors bet on China's clean energy race

From Reuters via The Guardian:

Beijing-based clean energy investors are enlisting foreign and local interest, as financiers show increasing faith in China's ability to meet tough goals to clean up its coal-based economy.

The China Environment Fund, for example, has just tapped foreign investors to top up its clean energy fund to $250 million. It counts Beijing's Tsinghua University, famous for its engineers, as a significant shareholder.
China is in the spotlight for its much dirtier, coal-based power generation, with the country poised to overtake the United States as the world's number-one emitter of carbon dioxide, the main greenhouse gas blamed for global warming.
High carbon-emitting coal still accounts for more than 70 percent of the country's power.
...A clutch of Chinese companies have recently burst into the global solar power industry. Founded in 2001 and listed in 2005, Suntech now counts itself as a top-three solar cell maker, and its founder, Shi Zhengrong, is a billionaire, according to Forbes.
..."What it's taken the world to do in the past 20 years, China will do in the next 10," said James Pennay, from the Beijing office of wind project developers IW Power.

‘Snooty’ bankers blamed for crisis

From the Financial Times:
The “snooty” attitude of bankers and financiers who thought they were cleverer than everyone else is largely to blame for the global credit squeeze “disaster”, Germany’s finance minister has said....MORE

The President's Working Group on Financial Markets

John Crudele does not sound happy.
From the New York Post:

AFTER a year and a half of stalling, the US Treasury finally complied with The Post's requests for information about The President's Working Group on Financial Markets - by delivering 177 pages of crap.

In essence, the Treasury's Freedom of Information officials said that the Working Group - affectionately nicknamed the Plunge Protection Team - doesn't keep records of its meetings.

How interesting and convenient!

Included in the 177 pages that the Treasury said responded to our request on the actions of The President's Working Group were 53 pages on which something was redacted - blacked out so that the discussion was unreadable.

Many of those 53 pages contained no words at all - just a big black blob.

Starting in June of 2006 The Post asked for an accounting of the actions of The President's Working Group, which was formed under President Reagan. The Group seems to have the ill-defined task of keeping an eye on the financial markets. We also asked for e-mails related to our request through the Freedom of Information Act (FOIA).

The Working Group operates out of the Treasury Department and includes the heads of the various exchanges in the US, as well as top-ranking government officials....MORE

Dubai opening hotel next to White House


Istithmar Hotels, part of the Dubai government-owned Istithmar investment house, is opening a W hotel on Pennsylvania Avenue, Washington DC.

One its closest neighbours will be the President of the United States, who lives on the same street at 1600 Pennsylvania Avenue.

W Washington DC will be located directly across the street from the White House, offering 317 luxurious guest rooms, including 32 suites, a spectacular rooftop bar and terrace and a world-class signature restaurant....MORE

Planktoast? (PLKT.PK)

From Biopact:

Scientists find ocean fertilization won't work - final blow to controversial geoengineering option

Scientists have revealed an important discovery that raises serious doubts concerning the viability of plans to fertilize the ocean to solve global warming, a projected $100 billion 'geoengineering' venture that has attracted a lot of criticism from environmentalists, climate scientists, civil society and oceanographers who think the scheme may destroy marine environments. The concept was recently deemed 'not scientifically justified' by the International Maritime Organisation (IMO) (earlier post). The bioenergy community for its part is opposed to the idea, because it distracts attention from a much safer solution to global warming, namely the production of negative emissions from bioenergy. But now scientists deal the final blow to the controversial concept, saying it simply won't work....MORE

From EurekAlert:

New research discredits $100B global warming 'fix'
Research raise doubts about viability of ocean fertilization

Virginia Key, Fla. -- Scientists have revealed an important discovery that raises doubts concerning the viability of plans to fertilize the ocean to solve global warming, a projected $100 billion venture.

Research performed at Stanford and Oregon State Universities, published in the Journal of Geophysical Research, suggests that ocean fertilization may not be an effective method of reducing carbon dioxide in the atmosphere, a major contributor to global warming. Ocean fertilization, the process of adding iron or other nutrients to the ocean to cause large algal blooms, has been proposed as a possible solution to global warming because the growing algae absorb carbon dioxide as they grow.

However, this process, which is analogous to adding fertilizer to a lawn to help the grass grow, only reduces carbon dioxide in the atmosphere if the carbon incorporated into the algae sinks to deeper waters. This process, which scientists call the “Biological Pump”, has been thought to be dependent on the abundance of algae in the top layers of the ocean. The more algae in a bloom, the more carbon is transported, or “pumped”, from the atmosphere to the deep ocean....MORE

Warren Buffet on The Entity (M-LEC, Super-SIV, Super-Conduit, Whatever)

Let's talk clearing price.

From The Financial Times:

...“One of the lessons that investors seem to have to learn over and over again, and will again in the future, is that not only can you not turn a toad into a prince by kissing it, but you cannot turn a toad into a prince by repackaging it,” Mr Buffett said during a visit to South Korea

“But very imaginative people in the securities market try to do that. If you have bad mortgages they do not come better by repackaging them. To some extent the chickens are coming home to roost for the mortgage originators and securitisers,” he said.

The proposed superfund would buy assets from cash-strapped structured investment vehicles (SIVs) following the subprime mortgage crisis in the US.

Mr Buffett, one of the world’s most successful investors, said the market should set the price.

“I think there should be a requirement that before the securities are put into the new super-SIV, 10 per cent of the holdings should be sold into the market to people who are not associated [with the subprime problem],” he said.

“That way we can be sure that they are being put in at appropriate market prices . . . They should give the market the opportunity to price the super-SIV themselves so we can see what they are really worth.”


Why Citadel Pounced (ETFC, C)

See post below on the problems Citadel may have exposed for Citigroup's pricing of their junk paper. This could be the story of the week.*

From the Wall Street Journal Online:

On Monday, Nov. 12, Kenneth Griffin was boarding a plane to New York when he received an urgent call from Joe Russell, a lieutenant at Mr. Griffin's big hedge fund, Citadel Investment Group. Shares of online broker E*Trade Financial Corp. were plunging in value, and Citadel, a holder of E*Trade shares and debt, was losing money rapidly.

"We need to focus on this fast," said Mr. Russell, Citadel's head of credit investments, relaying word that an analyst report suggesting possible bankruptcy had sent shares of E*Trade reeling.

"Let's go," Mr. Griffin shot back, as he authorized a plan to begin buying up millions of shares of E*Trade. The next morning, Mr. Griffin and his team reached out to E*Trade, hoping to inject money directly into the company. Mr. Griffin was sensing that he could profit from a recovery at E*Trade and the overall financial markets, which have been in turmoil since the summer.

Late Wednesday night, a deal was reached to invest $2.55 billion into E*Trade, which is best known as a discount brokerage firm but also runs a federal savings and loan. That unit's ventures into mortgage securities have taken a devastating toll, sinking E*Trade's stock to 78% below its price at the start of the year. The stock closed yesterday in Nasdaq Stock Market trading at $4.82 a share, down 46 cents....MORE

*Here's David Gaffen at the Wall Street Journal's MarketBeat blog, Nov. 9, with as succinct an explanation as I've seen:
The truth about this CDO nonsense is that at this moment, the last thing the banks holding the paper want is the sudden appearance of an efficient market. Which is why the announcement from Standard & Poor’s that a CDO managed by State Street Global was being forced to liquidate its holdings should scare the heck out of them. In a sense, what’s kept the lid on these losses is that nobody knows just what these various pieces of paper are worth, and many of the financial services firms held the paper in part because they felt the market would recover to a point that would satisfy whatever “mark to model” or “mark to myth” they were doing. After all, Merrill Lynch’s once-CEO Stan O’Neal wouldn’t comment on the firm’s earnings conference call as to whether their CDO exposure had been marked down to a level that could “clear the market.” Because when no price exists, the price is whatever you want it to be — but if a liquidation has begun, investors can no longer can keep up the charade of paying no attention to the man behind the curtain, hence the desire by these big banks to create a presumably shape-shifting form that would eat up these assets without showing any details, sort of like the Blob. S&P said the trustee of the CDO, called Carina CDO, “has not informed us when the collateral will be liquidated, we believe the liquidation process has begun.” State Street is down 2.7% today, and it doesn’t even own assets in the CDO, it merely acts as a manager. –With Aparajita Saha-Bubna of Dow Jones Newswires

Thursday, November 29, 2007

Price Check in the Subprime Aisle -That They Don't Want You to Know About**

This is an astute observation.
From the hardest working man in show business.
Er, the WSJ's Deal Journal.
Note the timestamp.

Does one deal a market make?

Citadel’s E*Trade bailout has led some to call a floor for the dodgy mortgage-backed securities that have been rattling the markets. “We finally have a market-determined price for all those mortgage-backed securities, and it is 27 cents on the dollar,” said one analyst. That would presumably have great significance for the likes of Citigroup, Morgan Stanley, and Bear Stearns. The value of this paper has been the primary question mark hanging over the stocks....MORE

**That's a feeble play on Kevin Trudeau's book:
“The Weight Loss Cure ‘They’ Don’t Want You to Know About”

Which came to mind because of this press release a couple weeks ago:

Federal Court Finds Kevin Trudeau in Civil Contempt

On November 16, 2007, a U.S. District Court judge found Kevin Trudeau in contempt of court for violating a 2004 permanent injunction. The Court found that Trudeau violated the permanent injunction when he misrepresented the contents of his book, “The Weight Loss Cure ‘They’ Don’t Want You to Know About,” in several infomercials. The permanent injunction banned Trudeau from using infomercials to sell any product, service, or program. The ban contained a narrow exemption for infomercials for books and other publications, but specifically required that Trudeau not misrepresent the content of the books. Judge Robert W. Gettelman ruled that Trudeau “...has misrepresented the contents of his book by stating in his infomercials that his diet protocol was ‘easy’ and that it allowed dieters to ‘eat whatever they want,’ and he has misled thousands of consumers.”

The 2004 permanent injunction settled the Federal Trade Commission’s charges that Trudeau had falsely claimed that his calcium product could cure cancer and other serious diseases, and that a purported analgesic called Biotape could permanently cure or relieve severe pain. The appropriate contempt remedy for violating the permanent injunction is still to be determined by the Court....

Here's the Federal Trade Commission release, I hope Kevin didn't sell all the Biotape, that's gotta hurt.

Planktos 8K: Expects to File Financials Within 5 Days (PLKT.PK)

From the 8K:

ITEM 3.01


Planktos Corp. (the “Company”) has been notified by the Financial Industry Regulatory Authority (“FINRA”) in a letter dated November 20, 2007, that pursuant to NASD Rule 6530(e), the Company has been delinquent in its reporting obligations under the Securities Exchange Act of 1934 three times during the past 24 months. As a result, the Company will be ineligible for trading on the Over-the-Counter Bulletin Board (the “OTCBB”) for a period of 12 months beginning November 29, 2007. The Company has requested a hearing with FINRA to appeal the determination of delinquency.

According to the FINRA notice, during the past 24 months the firm has previously been delinquent in making timely filings with the Securities and Exchange Commission (the “SEC”) on two other occasions. A late filing of the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005 and late filing of the Company’s Quarterly Report on Form 10-QSB for the interim period ended June 30, 2007.

The Company has also not yet filed its Quarterly Report on Form 10-QSB for the quarter ended September 30, 2007 (the “9/30/07 10-QSB”). Such report was required to be filed not later than November 19, 2007. The delay in filing the 9/30/07 10-QSB has been due to the accounting challenges resulting from the completion of the reverse merger with Planktos, Inc. The Company expects to file its 9/30/07 10-QSB within the next five days.

Planktos is a development stage company intent on producing carbon credits by utilizing proprietary technology designed to restore the world’s oceans and forests as a means by which to sequester CO2 in the environment.

The Company intends to comply in a timely manner with all SEC reporting rules over the next 12 months and pending the outcome of the hearing with FINRA expects to reapply, if necessary, for the quotation of its common stock on the OTCBB.


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



By: /s/ Russ George

November 29, 2007

Name: Russ George


Chief Executive Officer

Stay Tuned.

A Lack of Apron Area Will Compel Delegations Attending the UN Climate Change Conference to Park their Planes Outside of Bali.

Once again, I am (almost) speechless.

From Bali Discovery Tours:

Bali News: How to Jettison a Jet
(11/3/2007) Tempo Interaktif reports that Angkasa Pura - the management of Bali's Ngurah Rai International Airport are concerned that the large number of additional private charter flights expected in Bali during the UN Conference on Climate Change (UNFCCC) December 3-15, 2007, will exceed the carrying capacity of apron areas. To meet the added demand for aircraft storage officials are allocating "parking space" at other airports in Indonesia.

The operational manager for Bali's Airport, Azjar Effendi, says his 3 parking areas can only accommodate 15 planes, which means that some of the jets used by VIP delegations will only be allowed to disembark and embark their planes in Bali with parking provided at airports in Surabaya, Lombok, Jakarta and Makassar.
If you didn't catch it, besides flying in on private jets; they will land, deplane the VIP's, take off, park, take off, land, board the VIP's and take off for home.
These guys are gonna give Gulfstream Environmentalists a bad name.


China: "Don't patent CO2 Technology"

This meme seems to be spreading. Last week we had Nicholas Stern saying it in India:
‘No patenting of clean technology, please’

That's Nicholas Stern talking. I'm curious how my florescent green venture capitalist friends will react.
For the most part they were okey-dokey with Sir Nick when he was downplaying the costs of mitigation.*
Now the Chinese. From Reuters:
Rich countries must rethink intellectual property protection on energy-saving technology if costs of such technology are to be within reach of developing nations, a top Chinese energy official said on Wednesday.

China, which is set to surpass the United States as the world's top emitter of heat-trapping carbon dioxide, has called on rich countries to focus on technology transfer to help it offset emissions.

"I think we have to resolve a lot of barriers on the so-called intellectual property rights issues," Zhou Dadi, of China's Energy Research Institute, told reporters.

"That means if you really want to help China to speed up the technology transfer process, we have to really think about how to help China cover the high costs. Most of them are not based on material, they're based on intellectual property rights."

Asked if China would raise that issue in negotiations opening in Bali next week that will begin the process of finding a successor to the Kyoto Protocol, Zhou said: "I think so -- it should."...MORE

Hedge Funds: SAR [to] launch environmental fund

From Hedge Funds Review:

Systematic Absolute Return AG is to launch of the SAR Environmental Fund. The company has been researching environmental or “green” hedge funds for the past 12 months and has now completed a rigorous due diligence process for the initial portfolio. The fund will be open to investments for the 1st of January, 2008, and SAR is prepared to offer early stage investors significant fee rebates until the fund has reached $50m AUM.

The SAR Environmental Fund is unleveraged and targets absolute returns above 15% net for investors, with limited correlation to general debt and equity markets....MORE

‘Qatar ranks No.1’... per capita CO2 emissions

From the Gulf Times:
QATAR ranked No.1 in the world, followed by the UAE, in terms of per capita carbon dioxide emissions, an environmentalist said yesterday.
Estimates of per capita carbon dioxide emissions ranged from 28 to 43.5 metric tonnes a year, said Jasleen Bhinder, environment officer at Emirates Environmental Group (EEG) in the UAE....MORE

Is Google tilting at windmills?

BloggingStocks (a TWX company!) has a post by Zac Bissonnette that touches on three of my favorite topics: Google, Enron and mission creep (also known as management hubris; see: Climateer Investing).
Peter Lynch called it diworsification: the hubris that overtakes a management team that has been successful, and convinces them that they can achieve similar success by branching into new industries. For Google (NASDAQ: GOOG), we can just call it "renewable energy".

According to the New York Times, Google will be spending hundreds of millions of dollars to hire engineers and energy experts. This raise three important questions: What the heck? Why are they doing this? and What are they thinking?

I don't mean to be an alarmist, but this is sort of reminiscent of Enron. While that company will mainly remembered for the lessons it taught about accounting fraud, internal controls and the importance of investor skepticism, Enron's descent into fraud began as a business failure....MORE

Planktos is Now on the Pink Sheets

The senile dementia is kicking in.
I can't remember if going from the OTC Bulletin Board to the Pink Sheets is a step closer to, or a step away from, an NYSE listing.
There are some very good companies quoted on the Pinks.
In 1994 (it was a slow year) we looked at and analyzed every company listed there, mining for treasure.
We found some extraordinary values.
Unfortunately, when the market took off in '95 value was out, growth (exemplified by Netscape's IPO, here's some inside chatter.) was in and three months of work was set aside.

Here's Planktos:

PLKT — Planktos Corp.
Com ($0.001)
Primary Venue: Pink Sheets
Inside Quote
Best BidBest AskTime of Last Inside Change
0.21 (5000 shares)0.24 (5000 shares)10:49 AM

Trade Data / Last Trade 10:44 AM
Last Sale0.20Change-0.09
% Change-31.0345TickDown
Daily High0.33Daily Low0.20
Opening Price0.33Volume47,200
Annual HighundefinedAnnual Lowundefined
Prev Close0.29Dividendundefined
Yield0.00Beta Coefficientundefined

E*Trade’s White-Hot White Knight (ETFC)

From the WSJ's Deal journal blog:
Investors may do well by taking Citadel’s investment in E*Trade as a sign the worst of the mortgage market turmoil is behind us.

The Chicago hedge fund and its thirtysomething billionaire chief, Ken Griffin (left), have had the kind of performance this year that makes the enormous fees they charge their investors seem like a bargain. According to this story last week in the Chicago Tribune, Citadel has notched a 27% return this year, even as one august financial institution after another has been brought to its knees by the credit crisis.

...The hearty returns point out a surprising feature of the volatility that has enveloped financial markets for five months.
I believe I will appropriate the term "hearty returns" for the balance of the holiday season. It will supercede "jolly returns", my current fav.

All I Want for Christmas Is a Compost Bin

When I was a pup, a very old, very experienced trader advised me to "only read the headlines" in the Wall Street Journal, skimming until I had seen every page. Then I was to go back and read two stories that I thought might make money that day. The next step was to take note of stories to look at that evening. Then: Put the paper in your briefcase.

It is a difficult discipline.
With its worldwide reach and high-value, low-pay writers and editors you can spend hours with the darn thing.

Today I was torn between posting an on-topic story with the above headline, drawing our reader's attention to the ongoing green marketing meme, or linking to a take home story.
I'll do both.

Eco-Friendly Retailers Tout
'Green' Holiday Presents;
Carbon-Offset Gift Certificates


Trappist Command:
Thou Shalt Not Buy
Too Much of Our Beer
Monks at St. Sixtus Battle
Resellers of Prized Brew;
Brother Joris Plays Hardball

The Trappist monks at St. Sixtus monastery have taken vows against riches, sex and eating red meat. They speak only when necessary. But you can call them on their beer phone.

Monks have been brewing Westvleteren beer at this remote spot near the French border since 1839. Their brew, offered in strengths up to 10.2% alcohol by volume, is among the most highly prized in the world. In bars from Brussels to Boston, and online, it sells for more than $15 for an 11-ounce bottle -- 10 times what the monks ask -- if you can get it.

For the 26 monks at St. Sixtus, however, success has brought a spiritual hangover as they fight to keep an insatiable market in tune with their life of contemplation....MORE

Carlyle's Blue Wave Hedge Fund Loses 9.3% Since March

It is not known if they will be attending Hedge Funds World Zurich 2007 - Leading the way for the world’s most sophisticated investors!

From Bloomberg:

Blue Wave, the hedge fund started by Carlyle Group in March, lost 9.3 percent this year after credit investments backfired.

The fund, overseen by former Deutsche Bank AG executives Rick Goldsmith and Ralph Reynolds, was hurt in October by bets on structured credit, which can include securities backed by repackaged home loans, according to an investor who declined to be named because returns are private. It had $690 million in assets as of Sept. 30, according to a client letter obtained by Bloomberg.

Blue Wave's decline since March compared with the 10 percent average gain by hedge funds globally and the 6.7 percent return by multistrategy funds that bet on price differences between stocks, bonds and other securities, according to Chicago-based Hedge Fund Research Inc. The losses made Washington-based Carlyle, the world's second-largest buyout firm, vulnerable to client redemptions in its first hedge fund....MORE

A Fifth of U.N. Carbon Credits Maybe Bogus: WWF

One of the major supports for the housing binge was the fact that at the bottom of the inverted pyramid of financial non-, mis-, and mal-feasance was an appraiser who could be influenced, pressured or bought.

In the carbon trade you have the same situation with the third-party verifiers.
Making it even more fun, rather than a physical property as the basis for all the financial engineering, we buy, sell and package the absence of an invisible gas.
What a great time to be alive.

From Reuters:

One in five carbon credits issued by the United Nations are going to support clean energy projects that may in fact have helped to increase greenhouse gas emissions, environmental group WWF said on Thursday.

The United Nations runs a scheme under the Kyoto Protocol that allows rich nations to invest in clean energy projects in developing countries and in return receive certified emissions reduction credits (CERs) to offset their own emissions.

But WWF said in a report that the credits are being delivered to projects that would have gone ahead anyway, even without the extra incentive provided by U.N. approval under the scheme, called the Clean Development Mechanism (CDM).

The report, prepared by Germany's Oeko Institute for Applied Ecology, said projects lacking this so-called 'additionality' help increase gases blamed for global warming by giving firms a spurious justification for continuing to pollute.

"One out of five emissions reductions credits sold under the Kyoto Protocol's Clean Development Mechanism (CDM) lack environmental integrity," WWF said in a statement....MORE

Birinyi Associates Analysis of the Recent Market Downturn: Not Yet Time to go Long Canned-Goods

That headline is a take-off on something I read last week:
"Gold is for optimists, I'm buying canned-goods".

From Ticker Sense:

-10%, and Maybe a Little More to Go

As stated by the Journal this morning (and Birinyi Associates yesterday), the market is now down 10% from its 10/9 high. 2007 has been a year market with corrections, two are very significant and a third still deserves of attention.


We have noticed some recent analysis pointing to comparisons between current market conditions and that of the first part of 2003. We note that this is also the first 10% correction since the decline that occurred between 11/27/02 and 3/11/03. Below we show the S&P 500 50-day spread throughout the current bull market. It would be prudent to point out that the 11/27/02 correction preceded the strongest rally since 1990, taking the market up 95.47%....MORE

Tax energy wastage - not carbon dioxide

That's the headline of the short paper below.
One of the conundrums of encouraging energy efficiency is that, at any given price, less unit volume means lower revenue to the supplier. This acts as a financial disincentive to the supplier/producer, and leads to what amounts to lip-service for the concept of conservation.

In the case of electricity, it would probably be easier to implement what just about everyone agrees is a societal good, energy efficiency, if the utility is owned by the municipality.

This type of ownership has been fought tooth-and-nail in the U.S. by GE, Enron and the investor-owned utility industry since the 1890's, with some good arguments (and some lousy, self-serving ones as well) made for each approach.

Here's an idea that I use as a thought problem rather than a solution to the conundrum.
From COSPP via Blogactiv:

A global tax on wasted energy - especially the heat discarded by thermal, power-only generation plants -would be a powerful incentive for generators to begin to replace inefficient plant with CHP stations.

Aleksandar Kovacevic makes the case for such a tax and outlines its likely effects. The least efficient sources of energy today are those that are centralized. The waste heat they produce is simply released into the environment. Although the direct contribution of released heat to global warming is negligible, these sources have the side effect of low energy efficiency - a major contributor to climate change.

On a global scale, burning coal and oil to generate electricity produces more than 8000 TWh of electricity a year while releasing over 13,000 TWh of waste heat into the environment. If that waste energy were eventually used, it could produce the electricity equivalent of 2200 TWh of useful energy or increase power generation capacity today by almost one quarter for the same level of emissions.

Taking into account all fossil fuel plants (coal, oil and natural gas), Greenpeace1 argues that only 38.5% of fuel energy is converted into electricity, while 3.5% is lost through transmission and distribution (T&D), and about 13% through inefficient end use. But these are average figures. In many developing countries, energy systems are even less efficient. The International Energy Agency’s recently published World Energy Investment Outlook argues that almost half of available energy assets will be replaced by 2030, while total electricity generation capacity needs to be almost doubled by that time. Investments over the next decade will lock in technology that will remain in use for the next 60 years.

In 2003 more people were living in urban areas than rural. By 2030, 60% of people will be urban dwellers. Their need for energy services is a driving force behind energy investment. Infrastructure investment expenditure could amount to 9% of the GDP of low-income countries and to over 5% of (the larger) GDPs of wealthier countries.

Urban infrastructure is the most difficult to refurbish, restructure or replace. Solutions for urban transport, housing and energy supply are likely to be locked in for decades to come.2 In its World Energy Outlook in 2002, the IEA warned that under business-as-usual, CO2 emissions would grow by 69% by 2030 - at a rate faster than the growth of energy supply. Fast growing developing countries would burn more carbon-intensive fuels to support economic growth. Despite the higher efficiency of modern technologies, delayed investments and the prolonged life of existing facilities could create an even more difficult situation than projected.

Sir Nicholas Stern, in his Review: The Economics of Climate Change, warns: ‘Using the results rom formal economic models, the Review estimates that if we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more. In contrast, the costs of action - reducing greenhouse gas emissions to avoid the worst impacts of climate change - can be limited to around 1% of global GDP each year.

The investment that takes place in the next 10-20 years will have a profound effect on the climate in the second half of this century and in the next. Our actions now and over the coming decades could create risks of major disruption to economic and social activity, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century. And it will be difficult or impossible to reverse these changes.’

The IEA’s World Energy Outlook 2006, the latest, contrasts the alternative policy scenario with the reference scenario, which is roughly the development of ongoing trends. The alternative policy scenario comprises hundreds of measures that are already under consideration by governments and international institutions....

5 page PDF

Recipe for a meltdown

The primary culprits behind the market turmoil are sky-high stock prices -- and it's only going to get worse, writes Fortune's Shawn Tully.

From Fortune:

With the S&P down over 10% from its October record high, TV pundits and Wall Street strategists are blaming the most obvious culprits for the sudden reversal of fortune, chiefly the subprime crisis and the looming threat of a recession. But it's neither the credit crunch, nor a slowing economy -- nor a third hobgoblin, the weak dollar -- that pushed the markets into correction territory Monday.

The real reason is so basic, and so antithetical to Wall Street's habitual happy talk about stocks, that it barely rates a mention in the market chatter. Put simply, stocks are extremely expensive relative to the daunting risk in owning them. At current prices, earnings can't possibly grow fast enough to give investors the fat returns they covet.

There's just one way for equities to get their lustre back -- their prices have to fall substantially so that investors can harvest attractive returns from the modest profit growth that's in the cards. Like the biblical sheik who hastens to Samarra to escape death, only to find death waiting for him there, stocks have an inescapable appointment with a withering fate.

Naturally, stocks could bubble back to their old heights in the next few weeks or months. If the recent past proves anything, it's that the course of equity prices is totally unpredictable from day to day or quarter to quarter. As the economist Milton Friedman once told me, after returning my call collect, "Stock prices are rational in the long-term, but in the short-term, they're far from rational. They're full of noise."...MORE

Wednesday, November 28, 2007

Commercial Property Market Imploding?

From Bloomberg:

In the bond market, commercial property investors are about as creditworthy as U.S. homeowners with subprime mortgages.

``Commercial real estate is a full-blown bubble that feels very much at a bursting point,'' said Christian Stracke, an analyst in London at CreditSights Inc., a fixed-income research firm. ``There's a fairly toxic mix of factors at work.''

The cost of derivatives protecting investors from defaults on the highest-rated bonds backed by properties more than doubled in the past month, according to Markit Group Ltd. Prices suggest traders anticipate defaults rising to the highest level since the Great Depression, according to analysts at RBS Greenwich Capital in Greenwich, Connecticut.

The seven-year rally in offices and retail properties ended in September when prices fell an average of 1.2 percent, according to Moody's Investors Service. Banks worldwide are holding $54 billion of unsold commercial mortgages, according to data compiled by New York-based Citigroup Inc. that includes fixed and floating-rate debt.

Lenders are struggling to sell loans to investors after losses on debt backed by subprime mortgages to people with poor credit caused financial markets to seize up in July and August. Bonds with AAA ratings secured by properties ranging from the Sears Tower in Chicago to trailer parks in Delaware yield about 203 basis points more than similar maturity Treasuries, up from 92 basis points on Oct. 12, according to Morgan Stanley indexes.

Sales Tumble

The benchmark CMBX-NA-AAA index of derivatives tied to the safest commercial mortgage securities rose to 102 basis points from 44 a month ago. It costs $102,000 a year to protect $10 million of bonds backed by property loans against default, up from $44,000 a month ago. Derivatives are contracts whose value is derived from assets including stocks, bonds, currencies and commodities, or from events such as the weather or changes in interest rates....MORE

Iran May Seek to Lure Europe with Gas

From Der Spiegel:

Iran wants to use its massive gas reserves to wield influence over Europe. But if offering to supply Europe with gas via a pipeline through Turkey doesn't work, then the Revolutionary Guards may resort to plan B.

Iran is planning to leverage its massive gas reserves to increase its influence in Western Europe -- by fair means or foul. If selling gas to Europe doesn't work, then Iran's Revolutionary Guards may resort to violence in the worst-case scenario.

According to intelligence sources in the Middle East, Iranian leaders are considering making an unusual offer to supply Europe with large quantities of natural gas. The gas would be supplied via the planned Nabucco pipeline, which will run from Azerbaijan to Austria via Turkey.

The offer would be attractive to European leaders as it would allow Europe to reduce its dependence on Russian natural gas. Germany currently gets about a third of its natural gas requirements from Russia, and demand is expected to increase in the coming years. There are major concerns in Europe about the continent relying too heavily on Russia for its natural gas, particularly after a series of recent disputes in which Russia cut off energy supplies to Ukraine and Belarus.

According to minutes of a meeting obtained by SPIEGEL, a representative of Iran's Revolutionary Guard presented the proposal to Iran's National Security Council. The order to prepare the plan apparently came directly from Iran's supreme leader, Ayatollah Ali Khamenei, according to the intelligence sources....MORE

Exxon to unveil new battery technology (Lithium-ion)

From BusinessWeek:

Energy company Exxon Mobil said Wednesday it will present technology next month aimed at improving the efficiency and affordability of electronic and hybrid automobiles.

The company said it has codeveloped new film technology with Japanese affiliate Tonen Chemical that could allow lithium-ion batteries to be used in vehicles....MORE

The Guardian goes into a bit more detail:

Exxon develops technology for better hybrid battery

US says greenhouse emissions fell 1.5 pct in 2006

From Reuters:

U.S. emissions of the gases blamed for global warming fell 1.5 percent in 2006 on mild weather and high fossil fuel prices, the statistics arm of the Department of Energy estimated on Wednesday.

President George W. Bush said in a release that the drop kept the country "well ahead" of his greenhouse gas intensity goal, as measured by the amount of such gases emitted per unit of economic activity.

But U.S. emissions remained much higher than they were in 1990, a key year in international efforts to fight climate change because it is the baseline year for the U.N.'s Kyoto Protocol. Rich countries that signed the pact have to cut their emissions at least 5 percent under their 1990 levels by 2008 to 2012.

...Unseasonably cool weather in the summer and warm weather in the winter kept power demand flat last year which reduced emissions of CO2 from power plants, while higher prices for energy cut emissions from industry and cars, the report said...

Tackling climate change to cost 1.6 percent of GDP: UN

This number is $270 Billion per year higher than Nick Stern's 1% of world GDP but still low. My best guess (and that is all anyone is doing) after following this stuff for fifteen years, is north of 2%.

From Agence France-Presse:

Climate change could have apocalyptic consequences for the world's poor and tackling it will require cuts in greenhouse gases costing 1.6 percent of global annual GDP, the UN Development Program said in a report Tuesday.

Entitled "The Struggle Against Climate Change," the UNDP report paints an alarming picture of the climate change problem and urges richer countries to cut greenhouse gas emissions by at least 80 percent by 2050, with cuts of 30 percent by 2020.

The proposed reductions in emissions are "stringent but affordable," the report said.

Between now and 2030, the average annual cost would amount to 1.6 percent of global GDP, said the report to be presented Tuesday at a ceremony attended by UNDP chief Kemal Dervis and Brazil's President Luiz Inacio Lula da Silva....MORE

Indian Carbon Plays

From The Hindu:
Carbon trading: Money from (clean) air

...Listed Indian companies are already reaping sizeable profits through Certified Emission Reduction (CER) deals. The UNFCCC issued 1.83 million CERs to SRF Ltd in February 2006 for its HFC-23 thermal oxidation plant.

Following this there was a surge in its net profit in the third quarter (December 2006) due to an inflow of Rs 122.28 crore from the sale of CERs. This was nearly 27 per cent of the total income that year.

Tata Sponge Iron Ltd got a CDM certificate from the UN for its waste heat recovery project in Orissa. The company expects to reduce 3,17,624 tonnes of carbon dioxide over a 10-year period. JSW Steel’s plant in Karnataka has got clearance for its carbon credit project and is expected to earn 7.67 million CERs over the next 10 years.

All these CERs could be traded in the market, which would provide potential income over the next few years. Gujarat Fluorochemicals, Gujarat Ambuja Cement, Birla Corporation Ltd, Balrampur Chini Mills, Tata Steel and JK Cement are also eyeing additional profits through the CER route by 2012. Reliance Energy already has energy efficiency and process development CDM projects and is now looking at natural gas-based power plants....Source

Zimbabwe inflation 'incalculable'

Zimbabwe's chief statistician has said it is impossible to work out the country's latest inflation rate because of the lack of goods in shops.

From the BBC:

"There are too many data gaps," the Central Statistical Office's Moffat Nyoni told state media.

Many staple goods are often absent from shop shelves after the government ordered prices to be halved or frozen in a bid to stem galloping inflation.

September's inflation rate was put at almost 8,000%, the world's highest.

Other reports suggest the rate could be at near 15,000% and the International Monetary Fund had warned it could reach 100,000% by the end of the year.

Black market

Mr Nyoni said the Central Statistical Office has delayed the release of the inflation figure until an accurate way of calculating it can be found.

"We went to too many shops to observe and so compilations have not been completed," he said....MORE

Techno-Optimistic Environmentalism

Ron Bailey is probably not a genius. You could, however, argue that his writing is above average, and get no dissention from me.

From Reason Online:

In their 2004 essay "The Death of Environmentalism," activists Michael Shellenberger and Ted Nordhaus famously declared, "We have become convinced that modern environmentalism, with all of its unexamined assumptions, outdated concepts and exhausted strategies, must die so that something new can live."

What killed environmentalism? Man-made global warming. The pair argued that the problem of global warming is too big to be handled by green incrementalism. Switching to bioethanol and compact fluorescent lighting simply won't do. Something much bigger is needed. And they argued that modern environmentalism was not up to the task.

They blamed environmentalism's political ineffectiveness on the fact that environmentalists were perceived as being little more than another special interest group. In addition, the two excoriated movement activists for their "failure to articulate an inspiring and positive vision." Environmentalists turned off possible supporters because they were invested in telling the public doom-and-gloom "I have a nightmare" stories rather than delivering "I have a dream" speeches.

For Shellenberger and Nordhaus, the huge problem of global warming offers an opportunity to escape the green ghetto. Global warming is a poverty problem, a jobs problem, a food problem, an industrial problem, and an energy problem as well as an ecological problem. In their analysis, when environmentalists called for raising corporate average fuel economy (CAFE) standards, they didn't seek solutions that would also work for industry and unions. This political cluelessness means that CAFE standards have not been raised for over 30 years....MORE


Bond market blogs... you will never find a more wretched hive of scum and villainy.

That's the descriptor at Accrued Interest.
They've had a run of nice headlines recently:

Washington Mutual: What I have told you was true... From a certain point of view

Freddie Mac: We feared the worst

AMBAC: This is not going to work

AMBAC: Episode II

Protest at Goldman

From Gawker:



The protesters are apparently from the Northwest Bronx Community and Clergy Coalition and the New York City Anti-Predatory Lending Task Force and they're walking up and down Wall Street protesting everyone else now. They are singing a song, to the tune of Jingle Bells. The words to the song are unclear. Our source reports: "There's only about 20 of them. They have tiny signs!"
Tiny signs of justice!

HT: Dealbreaker

Attention Securities Analysts: Your Job is Going to India

Now, if we can figure out how to outsource the politicians.

From Bloomberg:

Behind frosted glass in rooms off- limits to anyone who isn't cleared for access, analysts at research firm Copal Partners calculate company valuations, compile industry data and write case studies of past mergers. Their specialty is pitch books, the reports that investment banks use to win M&A deals.

The Copal team is working in an office building in the New Delhi suburb of Gurgaon; its clients are Wall Street banks halfway across the globe.

``Copal does some of the things that we would do ourselves, but frankly we don't have all the time in the world,'' says Stephen Green, founder and chairman of NoonMark Advisors LLC, a privately owned New York investment bank that uses Copal's merger, company and industry analysis. ``You have a need to constantly keep your cost structure down.''...MORE

Sarkozy warns China of carbon tariffs

From the Financial Times:

Nicolas Sarkozy, the French president, on Tuesday warned China that the European Union could penalise cheap imports from high carbon-emitting countries in order to defend EU companies obliged to meet strict environmental standards.

...“We cannot have one response from Europe and one from Asia, one from the north and one from the south,” he said. “China can and must play its full part.”

But he said the EU, which regards itself as the world’s pace-setter in fighting climate change, would not indefinitely let its companies bear the brunt of this campaign if countries that mass-produced cheaper goods delayed adopting similar standards....MORE

Cleaner Nuclear Power?

Even though it comes up at the Thursday evening soirées, we've had only one post that mentioned thorium.
Time to double the SEO potential.

From MIT's Technology Review:

Congress pushes for another look at thorium fuel, saying it could reduce the amount of high-level nuclear waste produced by reactors.

Senators representing several Western states, including Utah's Orrin Hatch and Senate Majority leader Harry Reid, of Nevada, are working on legislation to promote thorium. They say it's a cleaner-burning fuel for nuclear-power plants, with the potential to cut high-level nuclear-waste volumes in half.

"They're concerned about the spent fuel from nuclear reactors ending up in their states," says Seth Grae, president of thorium-fuel technology developer Thorium Power, based in McLean, VA.

Nuclear watchdogs say that Thorium Power's technology has real potential. Moreover, they say that the legislation is needed. It would force the Department of Energy (DOE) and the Nuclear Regulatory Commission, which regulates the nuclear industry, to create new offices at the agencies to study thorium-fuel options and promote their use abroad.

"It makes a lot of sense in my view," says Thomas Cochran, director of the nuclear program at the Natural Resources Defense Council, in Washington. He says that congressional action is needed to overcome resistance within the DOE to exploring thorium.

Using thorium in existing reactors means rethinking the "once through" nuclear fuel cycle employed today in most countries, including the United States....MORE

Attention Investors: Here's Your Competition-Bookmark this Link

The Hedge Funds World post (immediately below) got me thinking about Jim Simons, who is
a) not a parvenu
b) probably won't be attending HFW this year.

Richard Teitelbaum at Bloomberg wrote a wonderful story. Give yourself fifteen uninterrupted minutes to get an inside look at a pro.
From Bloomberg:

On a hot afternoon in September, Renaissance Technologies LLC founder Jim Simons is too busy to take a phone call. It is, he says, from Cumrun Vafa, a preeminent Harvard University professor and expert on string theory, which describes the building blocks of the universe as extended one-dimensional filaments.

``Get another time when I can talk to him,'' Simons tells his assistant.

Then he mentions that the next day, he'll be meeting with Thomas Insel, director of the National Institute of Mental Health, to discuss autism research. And he's slated that Saturday to host a gala honoring Math for America, or MFA, a four-year-old nonprofit he started that provides stipends to New York City math teachers.

``I'm undoubtedly involved in too many things at the same time,'' Simons says in his 35th-floor office in midtown Manhattan. ``But you make your life interesting.''

...Renaissance is on fire: Its Medallion Fund -- which uses computers and trading algorithms to invest in world markets -- returned more than 50 percent in the first three quarters of 2007. It had about $6 billion in assets as of July 1.

Simons registered that performance as subprime and related markets were collapsing, sending two mortgage-related hedge funds run by Bear Stearns Cos. into bankruptcy. The turmoil pummeled the Goldman Sachs Global Alpha Fund, a rival to Renaissance's funds, which fell more than 25 percent during the same time. Morgan Stanley's computer jockeys lost $390 million in a single day in early August.

...More than 200 employees, of whom about a third have Ph.D.s, work in East Setauket. Another 100 are based in Manhattan, San Francisco, London and Milan. ``He creates an environment where it's easy to be creative and works hard to keep the bullshit level to a minimum,'' says former managing director Robert Frey, who worked at Renaissance from 1992 to 2004.

Even without the new commodities fund, Renaissance's assets have more than doubled in a year from about $16 billion on Sept. 30, 2006. That growth has catapulted Renaissance past such titans as Daniel Och's Och-Ziff Capital Management Group LLC, Ray Dalio's Bridgewater Associates Inc. and David Shaw's D.E. Shaw & Co. to become the world's largest hedge fund manager, according to data compiled by Hedge Fund Research Inc. and Bloomberg.

...``There are just a few individuals who have truly changed how we view the markets,'' says Theodore Aronson, principal of Aronson + Johnson + Ortiz LP, a quantitative money management firm in Philadelphia with $29.3 billion in assets. ``John Maynard Keynes is one of the few. Warren Buffett is one of the few. So is Jim Simons.''

Aronson credits Renaissance with validating the entire field of quantitative investing and proving that the freedom accorded to hedge fund managers to short stocks, borrow money and invest in myriad instruments can produce results that far outstrip typical market returns.

Simons, standing just under 5 feet 10 inches tall and weighing 185 pounds (84 kilograms), has trod an unlikely path. A former code cracker for the U.S. National Security Agency, in 1968 he became chairman of the mathematics department at Stony Brook University, part of the New York state university system. He built the department into what David Eisenbud, former director of the Mathematical Sciences Research Institute in Berkeley, California, calls one of the world's top centers for geometry....MUCH MORE

Hedge Funds World Zurich 2007 - Leading the way for the world’s most sophisticated investors!

...and a few of whom Churchill's detective bodyguard might have been speaking when he said, "Frankly sir, it smacks of the parvenu".

From the Website:
Day One

Afternoon refreshments

17.25 Networking drinks reception

Day Two

Panel discussion: the case for investing in renewable energies
  • Examining the benefits of renewable energies as an investment strategy
  • Debating the implications for investors of the trend towards biofuels
  • How volatile is the sector and what are the implications of this?

Mahmoud Ahmadinejad wants to hear from YOU!

Who knew?

From Foreign Policy's Passport blog:

Not enough Mahmoud Ahmadinejad in your life? The Iranian president has been blogging on and off for about two years—and now he's looking for feedback. In his latest post, Ahmadinejad asks for more readers write to him about Iran's relationship with the rest of the world:

As you know, the purpose of running this blog is to have a direct and mutual ‎contact and communication with the viewers and even though I have received many ‎messages from the viewers to update the blog and write new notes, I preferred to write ‎less and spend more time on reading the viewers' messages – and not let this ‎communication tool become just a one-way medium.

And apparently, people are responding. Here are some of the more colorful comments, both in agreement with and opposition to Mahmoud. All errors of grammar and spelling original:...MORE

Sunpower (SPWR): Up to $190 mil. From Morgan Stanley

The WSJ's Energy Roundup tips us with:

Morgan Stanley Throws Money at the Sun

Veronica Dagher has this report on an investment bank’s bet on solar:

SunPower said Morgan Stanley agreed to provide the company with up to $190 million in financing for future commercial and public agency solar electric power installations....MORE

Clash: What Will Climate Change Cost Us?

Scientific American rolls out their new site, CLASH by interviewing Sir Nicholas, Stern Bjorn Lomborg and IPCC lead author Gary Yohe.

Just a heads-up, This is not your great-grandma's Scientific American. It has (I think) degenerated. Their smear of Lomborg was despicable. Disagree with someone, crush them intellectually, shame them for their logical fallacies but don't do the ad hominem thing. It's just weak. Besides, everybody makes mistakes:
"... too far-fetched to be considered."
Editor of Scientific American, in a letter to Robert Goddard about Goddard's idea of a rocket-accelerated airplane bomb, 1940 (German V2 missiles came down on London 3 years later).

"That the automobile has practically reached the limit of its development is suggested by the fact that during the past year no improvements of a radical nature have been introduced."
Scientific American, Jan. 2 edition, 1909.
Here's your great-grandma's SA.
And here:
A Powerful Electric Touring Runabout:

Why China will not leave yuan to float

From the Times of London:

At least France sold the Chinese a couple of nukes. It could be all that Europe gets out of this week’s EU-China summit in Beijing.

An order for two nuclear plants, built to the latest French design, and vague pledges over a large fleet of Airbus jets. President Hu Jintao’s welcome gift to his guest Nicolas Sarkozy secured a somewhat ill-tempered response; in return, the French President treated the Chinese leader to a stern lecture about the iniquities of his country’s managed exchange rate policy.

The link between the yuan and the sinking dollar is costing eurozone exporters dear and Peter Mandelson, the European Trade Commissioner, laid into the Chinese yesterday in an article in the China Daily, calling for the policy to be scrapped. In an unsubtle hint that China might find itself in formal dispute with the European Union over a whole range of issues, from intellectual property theft to steel dumping, Mr Mandelson demanded that Beijing comply with the rules of the World Trade Organisation.

In response, Beijing officials quickly delivered a promise to cooperate with the eurozone countries and to “step up structural economic adjustments, prevent big swings in foreign exchange rates and make a contribution to an orderly adjustment of global imbalances”.

It’s words. The simple solution of letting the yuan float upwards to its natural level is out of the question....MORE

"Hey Meaty, You're Making Me So Hot!"

From Reason Online:

Heather Mills says meat eaters cause global warming.

There's something about vegetarianism that co-opts other causes—animal welfare, health, yogic meditation. Everyone seems to want to have a side of philosophy with dinner these days. The hottest, newest cause to be assimilated into the vegetarian-anti-industrial complex is global warming. Environmentalists and vegetarians have long maintained excellent relations, but the dawning of broader awareness about fossil fuels expended in food production and the other environmental impacts of farming have brought the two causes into an extremely cosy relationship.

And behold the strange offspring of that alliance:
The sweaty woman featured above is Heather Mills, the very-soon-to-be former Mrs. Paul McCartney. She was glamour model before she lost her lower leg in a motorcycle accident, and she recently strapped on her dancing leg...MORE

methane catcher

Ethanol Craze Cools

From the Wall Street Journal (front page!):

Little over a year ago, ethanol was winning the hearts and wallets of both Main Street and Wall Street, with promises of greater U.S. energy independence, fewer greenhouse gases and help for the farm economy. Today, the corn-based biofuel is under siege.

In the span of one growing season, ethanol has gone from panacea to pariah in the eyes of some. The critics, which include industries hurt when the price of corn rises, blame ethanol for pushing up food prices, question its environmental bona fides and dispute how much it really helps reduce the need for oil....MUCH MORE
HT: the WSJ's Energy Roundup

From the Ottawa Citizen:
Corn-based ethanol burns U.S. investors

From LiveScience:
Whatever Happened to Biodiesel?

However, from the Dakota Farmer:
Best Of Times Now; Better Times Coming

If you thought 2007 was a great year for growing corn and soybeans, just wait until you see what’s coming."

That’s advice from Steve Johnson, Iowa State University farm and ag business management specialist who is barnstorming across South Dakota this week talking to corn growers. Johnson is keynoting the "Growing Forward" seminars sponsored by Farm Credit Services and the South Dakota Corn Growers Association in Sioux Falls, Watertown, Aberdeen, Huron and Yankton.

"When was the best year ever for net farm income in American agriculture?" he asked more than 200 farmers who turned out for the meeting in Watertown Monday night. "It was 2007. We had record net farm income. You are living the best year ever in agriculture."

Johnson sees good times ahead – especially for row crop producers – despite a sharp rise in costs.

Crop input cost have soared, but so has income potential, he says.

You stand to make $100 per acre from corn and $60 per acre from soybeans in 2008 – even after paying more for fertilizer, seed, land and all other inputs....MORE

Tuesday, November 27, 2007

Attention Inventors: United Nations May Change Emission Rules to Lure U.S.

This is big money.
And from what I understand, carbon trading is the ginchiest*.

From Bloomberg:

The United Nations, manager of the world's second-biggest emissions-trading system, may change its rules from 2013 to encourage the U.S. to join an effort to stem climate change, an official who heads the program said.

New technology, such as equipment to capture carbon dioxide from power stations and store it underground, may be deemed worthy of generating emission credits automatically, Halldor Thorgeirsson, head of emissions trading at the UN Framework Convention on Climate Change, said in an interview.

...U.S. lawmakers are wary of greenhouse-gas credits approved by the UN because they may not ``be real,'' an adviser to U.S. Senator Joe Lieberman said Nov. 15. Because of that, a climate- protection bill introduced by Lieberman, an Independent from Connecticut, and Virginia Republican Senator John Warner, wouldn't permit the use of credits from foreign projects approved by the UN, the adviser, David McIntosh, said at the time.

... A perception exists among U.S. lawmakers that emissions trading might transfer too much wealth to developing nations from industrialized nations, said Kate Hampton, head of policy at Climate Change Capital, an investment bank with $1.5 billion of funds under management. ``That makes CDM a hard sell,'' she said last week in an interview in the bank's headquarters in London....MORE

See also:
From Forbes:
China to set up equity exchange for emission trading

From Stratfor:
Japan: Buying Carbon Credits From Hungary

From the Times of India:
India's carbon credit market set to take-off

From Reuters:
South Africa looks to cash in on carbon market

China has bigger role to play in carbon trading

From the Wall Street Green Trading Summit:
Last Chance for Carbon Seminars This Year

From; well you get the picture.
This is going to be the biggest wealth transfer in history.
As they say at USCAP,
"If you're not at the table, you're on the menu".

*" 'Cause that's the kind of scene that I dig...
baby, you're the ginchiest!" Source

From the Urban Dictionary:

1. Ginchiest

The attribute of being cool in the sense that others admire you for your apearance or actions or an object or situation that inspires those feelings. Popularized and possibly coined by actor Edd Byrnes as the character Kookie on the 77 Sunset Strip TV series.

"Baby, you're the ginchiest!"