Wednesday, April 30, 2008

UPDATE II: Nenana Ice Classic, Jackpot again tops $300,000

From the contest website:
The Nenana River went out in the late afternoon of April 28, 2008. The Tanana River is still frozen from bank to bank with no open water showing. The Tripod is still standing firmly in place.

The Nenana usually goes out a week before the Tanana. The breakup is now later than 29 of the 92 years the contest has been held.

From the Anchorage Daily News:

...Event organizers say this year's jackpot is $303,895. Ice Classic manager Cherrie Forness said that's an increase of $623.

The Ice Classic, now in its 92nd year, is Alaska's version of a lottery. Thousands of people pay $2.50 a ticket to guess what date and time to the minute a tripod set up on the Tanana River ice at Nenana, 55 miles south of Fairbanks, will move downstream and trip a clock that is wired to shore.

Forness said judging from the looks of the ice, it will probably be another week before the tripod falls or moves.

Forness said ticket sales in Anchorage and Fairbanks appeared to be up. However, she said, vendors in the Bush didn't fare as well, probably because of the high price of fuel in rural areas.

"I noticed the village sales were down," Forness said. "I think that's where (the high price of fuel) hits the hardest."...

From the Fairbanks News-Miner (Apr. 25):

Nenana Ice Classic still far from crowning a winner

Nenana Ice Classic officials have taken the last ice measurement on the Tanana River at Nenana. Now it’s just a matter of time before the ice goes out.

The ice measured 40.5 inches Monday, the thickest measurement this late in the spring since 2002. Even with warm temperatures in the high 50s this week, there is no sign that the ice is rotting or weakening, Ice Classic manager Cherrie Forness said.

“It’s just solid ice, bank to bank,” she said. “There are no (open) leads.”>>>MORE

The Woman Who Predicted The Mortgage Crisis Goes On The Record About The Future

From Women's Voices for Change:
We kept hearing about this woman named Karen Weaver (left), a top Wall Street analyst, who correctly sounded the alarm three years ago about the subprime mortgage crisis that has shaken the global economy (PDF) to its core. If only Wall Street and the banking industry had listened.

Today, Weaver is a Managing Director and the Global Head of Securitization Research, responsible for Deutsche Bank's research on securitized fixed-income products. She also manages Deutsche Bank Research-Americas, which has 300 professionals covering economics, debt and equity markets. Weaver joined Deutsche Bank from Credit Suisse First Boston in 2000. Prior to joining CSFB, she was a portfolio manager active in the ABS and MBS markets.

We asked Weaver -- who everybody listens to now -- for her thoughts on the economy and the future:

WVFC: You were sounding the alarm bell on the subprime crisis three years ago. What signs did you see then that there would be problems, and why were those signs seemingly ignored?

Weaver: As a research analyst, I spent time visiting the operations of mortgage lenders, where I was able to meet with the employees who were underwriting mortgages. Often these mid-level employees are more direct and less guarded then the senior management of their companies. In my visits, I was able to see that many of the mortgage loans being made were very, very risky.

I think the signs were ignored largely because home prices had been rising for so long in so many areas of the country, so that even very risky loans did not create losses for mortgage lenders. Borrowers who could not make their payments could always just sell the home -– at a profit. What too many people failed to see is that home prices were rising because mortgages were so easy to get, and that fed on itself. Now it is operating in reverse -- mortgages are harder to get, and so there are less potential buyers, and home prices are falling....MORE

HT: 24/7 Wall Street

Asian vultures disappearing faster than dodo

Sorry, I thought it was Sovereign Wealth Funds vs. Investment Bank Sr. Management.
From Reuters

Lazard Hikes First Solar Target (FSLR)

From 24/7 Wall Street:

There is an interesting call after First Solar Inc. (NASDAQ: FSLR) blew past earnings expectations and guidance today. Lazard Capital Markets alternative energy analyst, Sanjay Shrestha, has reiterated his BUY rating on the stock But his target has been raised to $350.00 from $300.00.

Shrestha noted that its output translates to a throughput increase to 45MW per line, up from 44MW in 4Q07, suggesting capacity of 1,035MW by year-end 2009....MORE

Dual treatment of incontinence and dementia associated with functional decline

Amazing how one's interests change over time.
From PhysOrg

Look for MUCH Higher Meat Prices (after they drop)

Last week we reprised our intro to meat markets course, with a Harvard fillip:

No not Harley-Davidson, although I imagine some econ grad student has written the paper.
Wheat and hogs are two commodities with long price series. We mentioned the hog cycle back in January:

The hog price series is one of the longest we have records for, back to the 1200's. The cycle is:
slaughter begets scarcity begets higher prices begets breeding begets over-supply begets slaughter. It's been going on for a while.

Today Professor Mankiw tips us to a government subsidized variation:
A Bad Time to be a Pig

Chapter 5 of my favorite economics textbook talks about how...

We just got another confirmation of the effect from MarketBeat, this time regarding the 22% pop in Buffalo Wild Wings:

...One might expect that the dramatic rise in prices for corn and other feeds would contribute to a jump in chicken prices, but it has had the reverse effect. “Many raisers are finding it less costly to slaughter than to feed livestock,” writes Stephen Anderson, analyst at MKM Partners.

Because of that, the excess inventory, if you will, has contributed to lower prices than expected. Buffalo Wild Wings, which posted an 18% increase in revenue, said second-quarter spot wing prices are likely to average about $1.20 per pound in April and May. By contrast, in the second quarter of 2007, prices averaged $1.25 a pound. J.P. Morgan Chase & Co. analysts note that the company had outstanding contracts for jumbo wings, which expired in March — just as prices were beginning to decline.

Demand trends may be contributing to the soft prices of late, in part because of the resurgence of concern about avian flu. The Georgia Department of Agriculture said in a weekly release that demand for wings is currently “normal to light.” Georgia dock quoted spot prices for wings fell to $1.06 a pound as of Wednesday, the lowest weekly quoted price for wings since the week of Dec. 20, 2006.

However, Mr. Anderson believes the softness in prices will not last. “As this increased supply of chicken wings is worked off in 2Q, we expect wing prices to rebound beginning in 3Q and continue rising into 2009 amid dwindling supplies,” he writes....

Thoughts on First Solar 1st Quarter Results (FSLR)

After trading down $15.00 in early pre-market trading, First Solar reversed and got up to $307.80.
The fact that the stock did not trade higher than the $308.24 all-time-high from April 22 is a sign of waning enthusiasm.
Today, at its high the stock was up $22.88 from yesterday's close.
On Feb. 13, when FSLR released Q4 numbers the stock closed up $52.90
On Nov 8, on release of Q3, the stock closed up $57.31.

There a couple things that I think about when talk turns to FSLR.
On the upside, a utility scale contract would be good for a pop.
On the downside, I've got my "Tokyo earthquake" scenario.

FSLR's use of Cadmium Telluride could come back to bite it in the butt, and not because of the much memed Te shortage.
Cd is one of six hazardous materials on the EU's "Restrictions on Hazardous Substances" list.

If you ever wake up and hear that there was a fire at a FSLR plant or in shipment or at a ground array, look for a four to ten billion dollar loss in market cap. And you'll get the news too late to avoid the rush.

Here's some info on the RoHS from Wikipedia.

What's the Upside, What's the Downside, What's the Timeframe?

If someone is going to pitch me an idea, those are the questions I have. If a person can make it interesting, interweave the alpha and numeric (or the alpha and beta) in a creative way, all the better, but at bottom it's really only the answers to those three questions that I'll remember.
And don't mess up on the facts! This thought comes to mind because of a brief back-and-forth I had at Environmental Capital re: their post "Going Nuclear: What To Do With the Waste?":

Interesting question.
Ask Sweden.
In the story you linked to in this morning’s Green Ink the fact that 45% of Sweden’s electricity is produced by nukes was nowhere mentioned by The Guardian.
Another 26% is hydro.
When the Brit press gets called on reporting half the story they get grumpy. That’s why there is a place to cathart:

Comment by Climateer - April 29, 2008 at 11:15 am

To which another reader responded:

... And indeed, we should ask Sweden.

They planned to decommission all of their nuclear power plants by 2010.
(Admittedly, they aren’t on schedule for that)
They’ve already shut down 2 plants, and only have a handful of plants left to go.

And of course they have no plans to build new ones.

Comment by David Ahlport - April 29, 2008 at 3:46 pm

You never know when your audience knows something about the subject in question, in this case I knew Mr. Ahlport had made two misstatements of fact and two blatant spin moves in 46 words. So I took on the two that didn't require looking up the exact numbers:

Mr. Ahlport,
Sweden shut down 2 of 12 nukes. Your ‘handful’ remaining = 83%.
The Swedes are “uprating” the existing plants to make up for the loss of the two that were shut down. Reactor upgrades 2008-10 will extend the lives of the plants to 2040-50.
Back to the original question, what to do with the waste-the proposed European long-term repository is in…wait for it…

Cracks me up every time the French sends the train.
Earth Times reported this morning, no train in ‘09.
Trust not the Euro-spin.

Comment by Climateer - April 29, 2008 at 5:25 pm

After I wrote that I checked and it turns out that the two plants that were shut down produced a total of 1200 MWHe and the upgrades (already approved by the government) total 665 MWHe or better than 55%.

I'm sure Mr. Ahlport is a lovely man but any time I see him writing I'm going to have a subconcious twinge and maybe a conscious thought: "Hmm, on Swedish nuclear he appeared to be a spinmeister" and that's how you lose access, without ever knowing why.

First Solar raises 2008 revenue, output forecast (FSLR)

From Reuters:

First Solar Inc (FSLR.O: Quote) raised its full-year 2008 revenue forecast to between $975 million and $1.05 billion from its previous estimate of $900 million to $950 million, Chief Financial Officer Jens Meyerhoff told a conference call on Wednesday....MORE

First Solar Disappoints on Nine-fold Earnings Growth (FSLR)

I can't believe I just typed that.
Yesterday we posted the analyst estimates: $0.36 low, $0.63 high, $0.47 average, along with our take on Lazard's April 16 call. With the benefit of two weeks hindsight I've got to say "Twas an interesting call". Speaking of calls, the conference call is going on right now. Today's word is:

Here's the press release:

First Solar, Inc. Announces 2008 First Quarter Financial Results
First Solar, Inc. (Nasdaq:FSLR) today announced its financial results for the first quarter ended March 29, 2008. Quarterly revenues were $196.9 million, down from $200.8 million in the fourth quarter of fiscal 2007 and up from $66.9 million in the first quarter of fiscal 2007.

Net income for the first quarter of fiscal 2008 was $46.6 million or $0.57 per share on a fully diluted basis, compared to net income of $62.9 million or $0.77 per share on a fully diluted basis for the fourth quarter of fiscal 2007. Net income for the first quarter of fiscal 2007 was $5.0 million or $0.07 per share on a fully diluted basis.

First Solar will discuss these results and expected results for fiscal 2008 in a conference call scheduled for today at 5:00 a.m. PDT (8:00 a.m. EDT). Investors may access a live audio web cast of this conference call in the Investors section of the company's website at An audio replay of the conference call will be available approximately two hours after the conclusion of the call. The audio replay will remain available until Monday, May 5, 2008 at 8:59 p.m. PDT (11:59 p.m. EDT) and can be accessed by dialing 888-266-2081 or 703-925-2533 and entering access ID number 1227426.

Fertilizer Scarcity Threatens Agricultural Productivity (IPI; POT)

Since we posted "J.P. Morgan on POT : Way High" the stock went from $195 to $207 the day of the post and then dropped in the next two sessions to close at $181.49 yesterday. That's volatile:

Chart for Potash Corp. of Saskatchewan, Inc. (POT)
Chart via Yahoo

Here's the story from Naked Capitalism:

Dear readers,

I will give more measured impressions of the Milken Conference in a day or so, when I it is over (we have another day, but the last day is far thinner in terms of offerings) and have had a day or so to reflect.

However, to give a highlight, a subtext was was that many pressing world problems had solutions (and better yet, private sector solutions).

Now as much as I like to opine broadly, I (hopefully) maintain a sense of proportion as to where I have good knowledge and where I am sticking my neck out, and try to advise readers when I know I may be sticking my neck out.

By contrast, Gary Becker, a Nobel Prize winner in economics (more accurately, The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, created by Sweden's central bank) maintained at the Monday and Tuesday lunch presentations (remember, meals have the biggest attendance and so will have the greatest impact) that unlike oil, the problem of agricultural price increases would be old news in a year or two because productivity of agriculture in the third world was so poor. All we need to do is get them to adopt even more advanced techniques). And that's great because all those people now working the fields will produce much greater GDP per head when they move to cities and free up the land.

At least today, another Nobel winner (was it Edmund Phelps of Columbia or Michael Spence of Stamford?) bothered pointing out that food is 60% of household spending in many parts of developing countries, that 50-100% prices in food means starvation and childhood malnutrition that can lead to permanently impairment....MORE

Al Gore's Generation Investment Management: New $683 Million Fund

From the Financial Times:

The investment vehicle headed by Al Gore has closed a new $683m fund to invest in early-stage environmental companies and has mounted a robust defence of green investing.

The Climate Solutions Fund will be one of the biggest in the growing market for investment funds with an environmental slant....

...“A fear expressed by some is that the first thing to go in a downturn is the nice-to-have sort of investment. Some people put green investments in that category, but we think that is nonsense. This is not nice-to-have – it is fundamental finance...because the transition from a high-carbon to a low-carbon economy is a ginormous step that is going to happen quickly,” he said....MORE

Tuesday, April 29, 2008

Piper Jaffray Boosts Price Target on First Solar (FSLR) to $340

From StreetInsider:

Apr 29, 2008 01:24PM

Piper Jaffray raised its price target on First Solar (Nasdaq: FSLR) from $280 to $340, reiterating their Buy rating.

The firm expects upside to raised Q1 and Q2 estimates.

Analyst Jesse W. Pichel said, "Based on recent channel checks with FSLR's largest customers, we believe efficiency improvements are afoot and may take hold in 2H08" and "we believe demand and pricing remains strong and consequently we raise our estimates ..."

About First Solar's Earnings Tomorrow (FSLR)

I'm trying to think but nothing happens!
-Jerome "Curly" Howard
Calling All Curs –1939

Nyuk! Nyuk! Nyuk!*

I got nothing. But I think Lazard was trying to tell us something a couple weeks ago when we relayed the price target and our 'weak' comment. As it happens, I just found the link:

From MarketWatch:

Lazard Capital Markets on Wednesday increased its price target for First Solar to $300 a share from $250 a share as part of its overall review of the solar energy sector....MORE

We like Lazard's feel for the solar sector but this seems a bit weak, the stock closed yesterday at $287.32.

Here are the analysts expectations:

Earnings Est Current Qtr
Next Qtr
Current Year
Next Year
Avg. Estimate 0.470.502.535.12
No. of Analysts 24232524
Low Estimate 0.360.341.893.40
High Estimate 0.630.743.506.69
Year Ago EPS

Yahoo has trends, revisions etc. here.

The stock traded up to its all-time-high, $308.24 on the 22nd, the low since that call has been $277.50, this morning.

Vanna, I'd like to buy a clue, please.

Here's "The Curley Shuffle" (talk about obscure)

*More than you ever wanted to know:
...Nyuk! Nyuk! Nyuk! Besides the great timing, his wonderful expressions and priceless bits, Curly made sounds like no one else. His Nyuk! Nyuk! Nyuk! was first heard in 1934's Men In Black, along with his famous Hhhmmm! In The Three Stooges first Columbia short – Woman Haters – Curly gave us the Woob! Woob! Woob! He added the snarling Rrrufff! To the repertoire in 1937's Dizzy Doctors. Among others is Nyagghhh! Usually used when the Boys were confronted by the bad guys, the monster or whomever or whatever was chasing them!


News you Can't Use: Not Sure What This Means

One of Europe's nuclear waste repositories (and the proposed long term facility) is:


Gore life?
or, as in Gorleben oder Leben?

Which thought was triggered by this post at Environmental Capital: Going Nuclear: What To Do With the Waste?
(my comment there refers to the Guardian article: Sweden's carbon-tax solution to climate change puts it top of the green list)

Ah Hell, Just Go Read Mother Jones

I realized I had linked to two stories from Mother Jones today without mentioning that this is her Energy issue:
If We don't Confront Our Energy Crisis We're Screwed

(she's a tough old biddy)

Here's the link, there are 31 stories and 13 editorials in The Future of Energy.
(mouse over the dashboard); and Financing Solar

From cnet:
Here come the solar tech financiers

Joseph Brakohiapa is thrilled to hear about how scientists are making solar cells more efficient at converting light to electricity. But he'd much rather be making a sale of solar panels.

Brakohiapa is the CEO of Clean Power Finance, one of a growing number of young companies that are spending their brain power on software and financing, rather than photovoltaics....MORE

HT: earth2tech

From Mother Jones:

Mr. Pimps Solar

Gary Kremen sat in his San Francisco office on a winter afternoon, shouting on his cell phone and taking frequent, inexplicable swigs from a bottle of lemon juice. Kremen is 44 and stout, with a raspy voice and an inability to sit still. He founded in 1993 and ran the porn-marketing site before selling it off for a reported $14 million in 2006. Lately, he has been sinking a chunk of his wealth and most of his energy into a new, slightly more altruistic startup called Clean Power Finance.

The new company, says Kremen, "is all about bringing solar to mass market"—making the case for going solar to average Americans, rather than just selling its virtues to what he calls "green liberals," "national-security types," and "utility haters." He wants to make installing solar panels on your roof as mundane as buying a car or any other big-ticket item. "If we're really going to get solar working, it can't be a green sell. It's got to be an economic sell," he says. "I'm all about 'green is cool.' But that's not big enough.">>>MORE

Trade War: With Canada?

That doesn't seem like a very good idea. But, the prohibition on buying your way out of Lieberman-Warner via CDM projects is smart, something I'll post on as we get closer to a committee vote in June.
From the Vancouver Sun:

Carbon credits: only from the U.S., you say?

It's all supposed to be about saving the planet. But fighting global warming is creating the political environment for another wave of economic protectionism in the United States. Carbon could change the flow of North American and global trade.

Call it the rise of the carbon tariff. It turns out the "decarbonizing" of the atmosphere is seen by many south of the border as a useful lever in saving U.S. manufacturing jobs and reversing the country's unsustainable trade deficit.

Canada, and British Columbia, better be paying close attention....MORE

Burlington Northern's 1Q Net Rises 30%

From Dow Jones via CNN Money:

Burlington Northern Santa Fe Corp.'s (BNI) first-quarter net income rose 30%, as the commodities boom translated into increased volume and better prices on shipments of agricultural products and coal.

The gain came even as the second-largest U.S. freight railroad operator behind Union Pacific Corp. (UNP) spent more than $1 billion on fuel, up 55% from a year earlier. The company, however, was able to collect an additional $280 million in fuel surcharges from its customers....MORE

From yesterday's Houston Chronicle:

Closing Glance: Rails, shippers up as oil falls from record

Shares of railroads hit all-time highs Monday as investors awaited first-quarter earnings from the nation's second-largest operator, Burlington Northern Santa Fe Corp., due out before the bell Tuesday. Shippers also rose as oil retreated slightly after hitting an all-time high near $120 a barrel earlier.

Here's how major players fared Monday:

Union Pacific Corp., up $1.01 to close at $141.60. The stock hit an all-time high of $142.50 during the session.

Burlington Northern Santa Fe Corp., up $1.37 to $101.12, after setting an all-time high of $101.46 earlier.

CSX Corp., up 14 cents to $62.08. Shares reached an all-time high of $62.94 during the session.

FedEx Corp., up $1.10 to $95.56.

United Parcel Service Inc., up 4 cents to $72.76.

The Seven Myths of Energy Independence

Bookmark this article, it's a bit long for the middle of the work day but definitely worth reading. I guarantee you will disagree with about half of what you see and think the other half is "obviously" true.
(which half will be different for every reader, our visitors literally range from crypto-fascists to avowed Marxists [I've gotten emails from both], with most folks somewhere in the middle)
Tough love from Mother Jones:

Myth #1
Energy Independence Is Good

Myth #2
Ethanol Will Set Us Free

Myth #3
Conservation Is a "Personal Virtue"

Myth #4
We Can Go It Alone

Myth #5
Some Geek in Silicon Valley Will Fix the Problem

Myth #6
Cut Demand and the Rest Will Follow

Myth #7
Once Bush Is Gone, Change Will Come

X Prize: $100 Million for Clean Fuels

From BusinessWeek:

In a bid to speed innovation, the foundation plans awards for breakthroughs in biofuels and other alternative-energy fields

The X Prize Foundation made its name handing out $10 million awards for cutting-edge innovation in promising but thinly financed fields of research. But now the Santa Monica (Calif.) foundation is targeting one of the most-crowded contests in technology: the race to discover clean alternatives to fossil fuels.

In its richest and largest competition yet, the foundation will divvy up some $100 million for transformations in biofuels, clean aviation fuel, energy storage, the provision of basic utilities for developing nations, and other categories....MORE

Archer Daniels Midland's quarterly profit up 42%

Unprecedented commodity prices propel revenue to 51% growth
"So you're saying that margins are slipping?" I know a guy who talks like that, he'll immediately glom onto any negative he sees. Yuck.
From MarketWatch:

Archer Daniels Midland Co.'s third-quarter profit increased 42% as a result of sharp increase in prices for grain commodities, the company said Tuesday.

The designer of genetically modified crop seed and ethanol producer said quarterly revenue rose 51% to $18.71 billion from $11.38 billion last year.
Higher selling prices for corn, soybeans, wheat and other commodity grains accounted for about 85% of the company's revenue growth, Archer Daniels Midland said.
Analysts polled by FactSet Research had expected, on average, first-quarter earnings of 69 cents a share on sales of $12.9 billion.
Shares of Archer Daniel Midland added 1.8% to $48.25 in premarket trading.

"Volatility in commodity markets presented unprecedented opportunities," said Patricia Woertz, chairman and chief executive....MORE

Chinese Fund May Pledge $1 Billion in African Investment in '08

From Bloomberg:

A Chinese fund set up to encourage investment in Africa may commit to spend $1 billion by the end of the year, Liliang Teng, president of the China-Africa Development Fund said today.

The fund is in discussions with Chinese companies on projects to improve energy infrastructure in South Africa, Mozambique, Zimbabwe and eastern Africa, Teng said in interview at a business forum in Tanzania's northern city of Arusha.

``Besides energy and power plants we will also focus on infrastructure, like rail, roads and airports as well as other areas, including agriculture and manufacturing,'' he said....MORE

Calpers: Read's Exit Is a Boost for Clean Tech

From the Wall Street Journal:
Calpers Head Aims
To Start Own Fund
Focusing on Sector
Russell Read, chief investment officer for the California Public Employees' Retirement System, plans to launch his own clean-tech-focused private-equity fund....MORE

Meanwhile, back at the behemoth, they try to balance activism, civil service employment and ROI:

...``It would not seem appropriate to engage in projects that had an impact on their jobs,'' Diehr said in an April 26 interview. ``I don't see it as that restrictive in light of the huge need for infrastructure development, both in the United States and internationally.''

A Calpers committee overseeing investment policy met April 21 to review proposed guidelines for infrastructure investments, Diehr said. The fund already has guidelines to ensure it doesn't make decisions that would eliminate jobs of pension members.

Balancing Act

``There are a fur ball of issues,'' said Casey Jennings, a principal at Lincoln Road Partners LLC in Lincoln, Massachusetts, which arranges debt financing for municipalities. ``How does a pension fund invest in infrastructure amid privatization, when its fiduciary responsibility is to get the best, safest return?''>>>MORE from Bloomberg

First Reserve to invest $940m in solar energy

From the Financial Times:
First Reserve, the private equity group specialising in energy investments, on Monday announced plans to invest €600m ($938m) in a solar energy company it created through recent acquisitions in Spain and Italy....

Carbon too:

...The buy-out group has been on a spending spree in recent months, including its £906m ($1.8bn) buy-out of Abbot, the Aberdeen-based oil drilling rig operator, and its $1.5bn acquisition of CHC Helicopter, the Canadian oil services group.

Following its €261m purchase of Gamesa Solar, the Spanish solar energy company, and its acquisition of Ener3, an Italian photovoltaic plant developer, First Reserve said the €600m would be for capital expenditure at the company over four years.

It said the new solar energy company – its biggest renewable energy investment – would expand into wind power and deliver 400MW of power in four years. Two-thirds of the capacity would be operated by third parties and a third by Gamesa Solar....MORE

Monday, April 28, 2008

Oil Bulls Biggest Nightmare...A Stronger Dollar

As usual Bespoke puts deep insight into a simple graph:


Go here for the verbiage.

Hedge Funds Buying Farmland

We may have an answer to the age old question: "To Whom?".
For some reason I picture Farmer Jones (with a couple Iowa State Masters Degrees) aw shucking the city folks and I think of Senator Sam Ervin (running intellectual circles around Attorney General John Mitchell, John Dean and the rest of "Richard Nixon's Secret Tapes Club Band"*) and his "I'm just a simple country lawyer" line.
From the Financial Times:

Hedge funds and investment banks are swapping their Gucci for gumboots as they bet on rising food prices by buying farms.

Billions of dollars are flowing into farmland across the world as investors gorge themselves on vast tracts of Australia, South America and eastern Europe.

“Sell banks, buy cheese,” Crispin Odey, manager of London-based hedge fund Odey Asset Management who has started investing in farming companies, said recently.

His recommendation is being followed by many hedge funds and a new type of farmland holding company – often backed by hedge funds – which believe the food boom will make farming highly profitable.>>>MORE

In a sidebar of related stories the FT has:

Earlier Climateer Investing posts:

The hedge fund manager who bought a farm

Crash could follow farm boom; Ethanol Subsidies to be Cut?

Farm visits can ease mental illness

Finally a story from John Kenneth Galbraith:

This tale is said to be told by John Kenneth Galbraith on himself. As a boy he lived on a farm in Canada. On the adjoining farm, lived a girl he was fond of. One day as they sat together on the top rail of the cattle pen they watched a bull servicing a cow. Galbraith turned to the girl, with what he hoped was a suggestive look, saying, "That looks like it would be fun." She replied, "Well.... She’s your cow."

*from Doonesbury

Solar ETF Performance Comparison (KWT; TAN)

For two ETF's with 70%+ overlap in constituents... let's just say I started laughing when I saw this 15 minutes to the close:

KWT41.88+1.71+4.26%Chart for MARKET VECTORS ETF

Here's the best open access comparison that I've seen:

Let The Sun Shine Through: Solar ETFs Compared (Claymore, Van Eck; TAN, KWT)

Climateer's Quote of the Day

From The Guardian:

...As a top energy producer and consumer, Russia welcomed the fact that Kyoto had not limited its carbon emissions and expected the same of any future climate deal, said Vsevolod Gavrilov, the official in charge of Russia's Kyoto obligations.

"Energy must not be a barrier to our comfort...

HT: Environmental Capital

And from our earlier post:

"I don't know if climate change is caused by burning coal or sun flares or what," said the Moscow-based carbon cowboy. "And I don't really give a shit. Russia is the most energy inefficient country around, and carbon is the most volatile market ever. There's a lot of opportunity to make money."

-From "The Bored Whore of Kyoto"

USDA Crop Progress Report: April 28, 2008

In a word: Slow.

CORN-For the 18 states that planted 91% of last year's crop, 2008 10% vs. '03-'07 average 35%.
RICE- For the 6 states that planted 100% of last year's crop, 2008 20% emerged vs. '03-07 average 32%.
SOYBEANS- For the 18 states that planted 95% of last years crop, 2008 2% vs '03-07 average 5%.
Winter WHEAT: 15% had headed vs. 25% trailing average.

The corn traders were looking for 16-18%. Hmmm

Here's the 6 page PDF, released 4:00 EDT.

Buffett says recession may be worse than feared. And: Centrica Jumps 2 Percent on Buffett Stake Talk BRK.A; CNA.L)

Wall of worry. 'Til it stops.

Warren Buffett, the world's richest person, said on Monday the U.S. economy is in a recession that will be more severe than most people expect.

Buffett made his comments on CNBC television after his Berkshire Hathaway Inc. agreed to invest $6.5 billion in the takeover of chewing gum maker Wm. Wrigley Jr. Co. by Mars Inc. in a $23 billion transaction.

"This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think," Buffett said. "This will not be short and shallow...MORE

From Reuters (Apr. 22):

Shares in British energy firm Centrica (CNA.L: Quote, Profile, Research) rose as much as 2.5 percent on Tuesday on the back of market talk that Warren Buffett's Berkshire Hathaway (BRKa.N: Quote) investment group was building a stake in the company, traders said....

Starbucks retreating from music business (SBUX)

And after their movie venture "Arctic Tale" worked out so well:

When compared to Di Caprio's "11th Hour".*

From Box Office Mojo: Domestic Total Gross: $833,532
Foreign Total as of Apr. 20, 2008: $1,020,838
From the L.A. Times:
Starbucks, ‘Arctic Tale’ frozen out at box office

The polar bears of “Arctic Tale” have gotten a chilly reception in movie theaters despite Starbucks Corp.’s serving up promotional materials in thousands of stores.

The Paramount Classics documentary, co-financed by National Geographic Films, has failed to draw the crowds that flocked to other recent environmental movies such as Oscar winners “March of the Penguins” and “An Inconvenient Truth.”

Costing less than $5 million to produce, the film has grossed roughly $600,000 domestically since its release July 25.

Here's the music story from Blogging Stocks, I really just wanted to rib SBUX for forgetting their roots.
*Leo's venture into the eco-flick genre was probably 0ver-the-top with the volcanoes.
(and I just used up all my Hollywood lingo in one sentence)
From Box Office Mojo:
Domestic: $707,343 72.8%
+ Foreign: $264,180 27.2%

= Worldwide: $971,523

One Guy Who Has Seen It All Doesn't Like What He Sees Now

From the Wall Street Journal:

Peter Bernstein has witnessed just about every financial crisis of the past century.

As a boy, he watched his father, a money manager, navigate the Depression. As a financial manager, consultant and financial historian, he personally dealt with the recession of 1958, the bear markets of the 1970s, the 1987 crash, the savings-and-loan crisis of the late 1980s and the 2000-2002 bear market that followed the tech-stock bubble....

...WSJ: Aside from securitization, what were the main causes of the problem?

Mr. Bernstein: You don't get into a mess without too much borrowing. It was sparked primarily by the hedge funds, which were both unregulated by government and in many ways unregulated by their owners, who gave their managers a very broad set of marching orders. It was a real delusion. It was like [former New York Gov. Eliot] Spitzer: "I am doing something dangerous, but because of who I am, and how smart I am, it is not going to come back to haunt me."

When you think about how all of this will work out in the long run, we are going to have an extremely risk-averse economy for a long time. The lesson has painfully been learned. That's part of the problem going forward. You don't have a high-growth exit from this, as you've had from other kinds of crises. We won't have a powerful start, where the business cycle looks like a V. Here, the shape of the business cycle is like an L, where it goes down and doesn't turn up. Or like a U, a flat U. The reason for that is that people aren't going to get caught in this bind again. They will tell themselves, "I'm too smart to do that again." And everyone else is going to be saying the same thing. It is, in fact, going to be a wonderful environment in which to take risk, because there aren't going to be any excesses....MORE

Thailand wants Opec-like cartel for rice

From the New Straits Times:

With the rice price soaring in tandem with the skyrocketing oil price, Thailand’s largest enterprise has call on the government to form an Opec-like alliance on rice to elevate its price.

CP Group chairman Dhanin Chearavanont said Thailand, the world’s biggest rice exporter, should approach three major rice-producing countries, namely China, Vietnam and India, to form the alliance similar to the Organisation of Petroleum Exporting Countries (Opec).

“Today Vietnam has halted its export of rice for fear of domestic shortage.

China alone doesn’t have excess rice for export, while India may have some rice surplus for exports in the coming years. So why don’t we join hands with those three countries to improve prices,” said Dhanin, as rice price rose to US1,000 (US$1 = RM3.15) a tonne from just US$367 about 10 months ago....MORE

US Congress reaches deal on farm bill: Ethanol subsidy to be cut

Remember: USDA crop progress this afternoon, I'm all atingle.
From the Financial Times (Saturday):

Congressional negotiators on Friday reached a tentative agreement on the farm bill, potentially ending months of deadlock over US agricultural policy amid record profits by farmers and mounting concerns over rising food prices.

The proposed legislation, whose final details will be unveiled next week and still face the possibility of a White House veto, will cost $280bn over five years and largely preserves an extensive programme of subsidies to US farmers.

Under the terms of the deal reached by House and Senate negotiators, a key ethanol tax credit is expected to be reduced from 51 cents per gallon to 45 and the tariff on ethanol imports from outside the US is also expected to be scaled back....MORE

And a few minutes ago, from Brownfield Network:

Ethanol industry fights back against misinformation
The Indy Racing League’s (IRL) Road Runner Turbo 300 took place at the Kansas Speedway in Kansas City, Kansas, Sunday. The IRL is, for the second year in a row, using 100% ethanol to fuel all its race cars. And before Sunday's race, the Ethanol Promotion and Information Council (EPIC) held a press conference at the speedway to counter the recent spate of negative stories and misinformation about the renewable fuel.

As recently as a year ago, anti-ethanol coverage in the mainstream media was less common, typically focusing on questions related to its efficiency as a fuel. But over the last several months, articles blaming ethanol for a wide range of global ills have surfaced in media outlets around the world. Now, EPIC Executive Director Toni Nuernberg told reporters the entire renewable fuels industry is banding together to counter the false claims about ethanol in an initiative called Renewable Fuels Now.

"It isn't just EPIC," Nuernberg said. "It's EPIC. It's RFA [Renewable Fuels Association]. It's ACE [America Coalition for Ethanol]. It's a number of our members, EPIC members, ethanol plants, working together to combat some of this.">>>MORE

China a buy for top investor Jim Rogers

From the Telegraph:

Renowned investor Jim Rogers has revealed that he has begun buying Chinese shares again as the market has bottomed.

Mr Rogers, who founded the Quantum Fund with George Soros in the 1970s, said he would be focusing his interests on agriculture, tourism, airlines and education at a seminar in Beijing.

He recently sold his mansion in New York to move to Singapore, citing the investment potential in the Asian markets as the key factor....MORE

HT: FT Alphaville

Sunday, April 27, 2008

Um, folks, um, maybe we should start thinking about rebuilding our grain reserves.

Last week we saw, in "Climate Change and the Pacific Decadal Oscillation" that the Pacific Decadal Oscillation had flipped into its cold phase.
The Atlantic Multidecadal Oscillation went into its warm phase in 1995.
If I'm reading the literature correctly (always ask that question!), the drought in the southwestern U.S. (+PDO; +AMO) should start to relax* and, as the PDO settles in, move to the nations breadbasket (-PDO; +AMO).
Over the next five to twenty years this is going to get really interesting.
Just a little heads-up.

...North American Drought

Drought over north America has been correlated to the Atlantic Multidecadal Oscillation and the Pacific Decadal Oscillation.

North American drought frequency

The relationship between drought in the continental US and the phases of the Pacific Decadal Oscillation (PDO) and the Atlantic Multidecadal Oscillation (AMO). The most severe droughts occur when the PDO is in a negative phase, and the AMO is in a positive phase.
From McCabe (2004).

More than half (52%) of the space and time variance in multidecadal drought frequency over the conterminous United States is attributable to the Pacific Decadal Oscillation (PDO) and the Atlantic Multidecadal Oscillation (AMO). An additional 22% of the variance in drought frequency is related to a complex spatial pattern of positive and negative trends in drought occurrence possibly related to increasing Northern Hemisphere temperatures or some other unidirectional climate trend. Recent droughts with broad impacts over the conterminous U.S. (1996, 1999-2002) were associated with North Atlantic warming (positive AMO) and northeastern and tropical Pacific cooling (negative PDO). Much of the long-term predictability of drought frequency may reside in the multidecadal behavior of the North Atlantic Ocean. Should the current positive AMO (warm North Atlantic) conditions persist into the upcoming decade, we suggest two possible drought scenarios that resemble the continental-scale patterns of the 1930s (positive PDO) and 1950s (negative PDO) drought.
—McCabe (2004)

More from Texas A&M.

More from NOAA.

*Wet winter raises water levels, but drought persists

Arizona drought lingers even amid rains

And this could turn out to be old news:

Experts say that the drought in the U.S. could mean climate change

The U.S. Southwest's current drought could be the start of the Dust Bowl-like future that some scientists have already predicted will come from human-caused warming.

Or, it could just be another in the long line of natural, cyclical droughts in the region dating back 1,000 years.

But one of the nation's leading climate scientists, the University of Arizona's Nobel Prize-sharing Jonathan Overpeck, says he's coming to believe there's "a real likelihood" the drought is caused by global warming.

New research at the UA backs that up.

Some other scientists disagree, even as leading climate experts generally agree that someday, global warming will make the Southwest drier.

This drought is already known as the region's worst in more than a century and one of the worst in the past 500 years...

Time to Short the Platinum Group Metals? Nanonickel to Replace Platinum as a Catalyst in Fuel Cells and in Other Applications

From Azonano:

QuantumSphere, Inc., a manufacturer of metallic nanopowders, working toward catalyzing the future for fuel cells, batteries, and hydrogen generation, is moving forward with the collaboration of Robert Dopp, of Doppstein Enterprises, Inc. (DSE). Together they are testing QuantumSphere's new line of nano-catalysts in functioning air electrodes to better identify significant parameters in the development cycle.

Mr. Dopp has developed a cathode manufacturing process expressly designed to manufacture small "coupons" of highly uniform, very active and reproducible gas diffusion electrodes. These are typically used in metal air batteries, alkaline fuel cells, other air breathing systems as well as hydrogen generation cells. By producing the finished product from the new generation of catalyst, QuantumSphere can engineer their particle size distribution, composition and distribution to optimum performance. This is something that quantitative and physical measurements cannot achieve; the collaborative efforts of QuantumSphere and DSE can....MORE

You might remember QuantumSphere from this press release:

Pioneer of the Methanol Economy, Nobel Laureate and World-Renowned Scientific Leader, Dr. George Olah, Joins QuantumSphere, Inc.
QuantumSphere, Inc., the leading manufacturer of metallic nanopowders for applications in aerospace, defense, energy, electronics and other markets demanding advanced material applications, announced Professor George A. Olah, recipient of the 1994 Nobel Prize in Chemistry, has joined QuantumSphere’s Scientific Advisory Board. This news follows QuantumSphere’s previous announcement that it received Frost & Sullivan’s Technology Innovation of the Year Award for 2005.

QuantumSphere is the only supplier of the world’s highest quality magnetic, conductive and catalytic metallic nanopowders, including QSI-nano™ nickel, silver, copper, cobalt and other proprietary nanoscale alloys. QSI-nano™ metals and nanometal alloys are now replacing a significant portion of platinum, currently the main catalyst in a variety of fuel cells. These materials will also be used in high performance batteries.

Dr. Olah is the Director of the University of Southern California’s Loker Hydrocarbon Research Institute and Distinguished Professor in Organic Chemistry. Dr. Olah joined QuantumSphere’s Scientific Board of Advisors based on the following criteria: market need, technological excellence and management leadership. “QuantumSphere combines unique, proprietary technology, management team excellence and an ability to execute that will squarely place them in a position to serve a global market opportunity,” said Prof. Olah....MORE

How much your groceries will cost in 10 years

That's the headline at the London Times. The words are English but the syntax is from somewhere east of Strasbourg. Or Bratislava. Anyhoo, from the Times of London:

...Here we show you what the food is your basket might cost in ten years' time.


There is likely to be a significant price increase in the traditional centrepiece of the Sunday roast. Chicken, as a 100 per cent grain-fed animal, is at the mercy of soaring grain prices, which have increased 50 per cent in the past six months. The rise is in response to factors such as drought in Australia, the rise in affluence encouraging increasing numbers of consumers in the developing world to eat meat, and crops being grown for biofuels rather than food. As 60 per cent of the cost of a chicken is its feed, grain will have a significant impact on what we pay.


The United Nations estimates that it takes an average of 8kg of grain to produce 1kg of beef. As most British beef is fed on pastures during the summer, beef might avoid the worst of rising grain prices, which have doubled in the past year. “Stick with British grass-fed beef and you're making a green choice as well as one that might remain immune to grain prices,” says Evan Fraser, a sustainablility expert at Leeds University. Beef from the United States is likely to be worse hit since it is intensively reared on large quantities of feed....MORE

Berlin's Tempelhof Referendum Fails Amid Unexpected Low Turnout

Climateer Investing & Cie. (okay, that's just an affectation, probably fueled by Zurich envy: Bordier & Cie, Hottinger & Cie, Lombard Odier Darier Hentsch & Cie, Mirabaud & Cie, Pictet & Cie [some of these are actually headquartered in Genève with offices in Zurich]) wrote about Tempelhof in "Ag Stocks and The Berlin Airlift (AG; MOS; MON; POT) " because:

a) The overwhelming majority of cargo by tonnage was coal.
b) We were coming up on Easter and I wanted to mention the "Easter Parade".
c) I get a kick out of
über-realism (see the post)
d) the whole saga was, as the Los Angeles Times said yesterday, "... In what is now considered one of the greatest operations in aviation history..."

Today Bloomberg is reporting:

Berlin's Tempelhof Referendum Fails Amid Unexpected Low Turnout
An initiative to save Berlin's Tempelhof airport from closure failed to win enough support as voters, primarily in the city's former communist east, opted not to turn up at polling stations in a city-wide referendum.

With 99.8 percent of ballots counted, 21.7 percent of registered voters cast ballots to keep the airport, short of the 25 percent necessary to validate the non-binding referendum, Berlin's State Election Office said in an e-mailed statement. Total turnout was 36 percent, compared with a Berliner-Zeitung poll yesterday showing that 47 percent had planned to vote.

Tempelhof, the main site of the post-World War II Berlin Airlift, has become the focal point of a movement that sought to preserve the historic building. The referendum's collapse is a victory for Mayor Klaus Wowereit, who spearheaded plans to close the airfield by October and shift all flights and operations to a refurbished airport on the German capital's outer limits....MORE

Help from the sky
Associated Press
Children in 1948 West Berlin, isolated by a Soviet blockade, watch as a U.S. plane delivers food to Tempelhof Airport.

Proposition Bets, Markets, and Suckers, from Jeff Watson

From Daily Speculations:

When I was a kid, I was always looking for an easy way to make money. My dad used to point out laborers working in the hot sun, explaining that "Those guys were the ones who didn't care about their grades." As always, my dad was 100% correct, and I didn't want to end up like that, preferring to make money in an easier manner.

Since I liked to play games as a kid, I tried to get as good as I could at whatever game I could master, then play it for cash. I found limited success, but after awhile, my friends avoided playing against me like the plague. During high school, I used to spend a lot of time playing poker in various places that would be considered to be shady, but those games were out of the orbit of my friends and presented opportunities to make money. I played a pretty tight- mechanical game those days, and observed the sharp type of guys, and how they operated. It was in those games, from those guys, that I discovered the beauty of proposition bets. A proposition bet is one of those "I'll bet you that….." followed by what would seem to be an impossible outcome, and a guaranteed win for anyone who would take the bet. Of course, the person taking the bet would be opening his wallet right after he lost....MORE

Nightly Business Report: Jason Zweig on Green ETF's (PBW; PZD; KWT; TAN)

From NBR:

PAUL KANGAS: In tonight's "Of Mutual Interest" segment, since it's Earth Day, we look at green funds. Joining us again, our mutual fund master Jason Zweig, investing columnist for "Money" magazine and author of "Your Money and Your Brain." Jason, welcome back to NBR.

JASON ZWEIG, AUTHOR, "YOUR MONEY AND YOUR BRAIN": Thanks, Paul, good to be with you.

KANGAS: Is it possible to buy into a fund that only invests in environmentally conscious companies?

ZWEIG: It is, Paul. There's an increasing number of exchange-traded funds or ETF's that invest almost exclusively in funds, in stocks that either clean up the environment or don't contribute to pollution and we'll talk about several.

KANGAS: All right. Well let's take a look at a few examples. First we have an ETF called WilderHill I believe it's pronounced, WilderHill clean energy. Tell us about that.

ZWEIG: Yes. That's -- the ticker symbol there is PBW and this is a fund that invests partly in companies that clean up the environment and then partly in companies that don't make it worse. So you get a mix of both. And it's been quite volatile. It was up, oh roughly 60 percent last year and down maybe 15 or 20 percent this year. So it's going to be a rough ride in funds like these.

KANGAS: What is the main influence to cause that volatility?>>>MORE

Eco-home in Cotswalds Fetches Record £7.2m

Who says green doesn't pay?
From the Telegraph:

...the cost works out at £3,000 per square foot - double that of homes in Beverly Hills and Manhattan.

For their money, the mystery buyer - reputed to be in the entertainment industry - will get a lakeside home complete with a glass-sided badger set in the garden....MORE

The Demise of the Euro

From Forbes:

Tensions between inflation-obsessed Germany and growth-hungry Latin countries will spell its end.

It is only a matter of time, probably less than three years, until the euro experiment meets its end. The financial crisis in the U.S. is hastening the process, as investors flee the dollar, pushing the euro to a price of $1.59. But it will not stay high for long. Countries like Spain and Italy will withdraw and return to their old currencies. Once that happens, get ready for the return of the deutsche mark and the French franc....MORE

See also, MarketBeat's An Endgame for the Euro?

And: Europeans, Buy Those U.S. Assets NOW

Technological Breakthrough In Fight To Cut Greenhouse Gases

This stuff is not THE answer but it can be AN answer. Plus, ever since I first poured the baking soda into the vinegar I've been fascinated by CO2 (and violent chemical reactions).
From ScienceDaily:

Scientists at Newcastle University have pioneered breakthrough technology in the fight to cut greenhouse gases. The Newcastle University team, led by Michael North, Professor of Organic Chemistry, has developed a highly energy-efficient method of converting waste carbon dioxide (CO2) into chemical compounds known as cyclic carbonates.

The team estimates that the technology has the potential to use up to 48 million tonnes of waste CO2 per year, reducing the UK's emissions by about four per cent.

Cyclic carbonates are widely used in the manufacture of products including solvents, paint-strippers, biodegradable packaging, as well as having applications in the chemical industry. Cyclic carbonates also have potential for use in the manufacture of a new class of efficient anti-knocking agents in petrol. Anti-knocking agents make petrol burn better, increasing fuel efficiency and reducing CO2 emissions....MORE

Here are a couple other approaches. Re: the first, whenever I write about baking soda I think of Arm & Hammer, which leads to Armand Hammer, which leads to Al Gore and family. In "Carbon Capture and Storage: Is This The Breakthrough? (Big Money if it is)" we wrote:

The answer isn't CaCo3. It's NaHCO3. Duh.

Sodium bicarbonate, otherwise known as baking soda. The stuff in the little yellow box, promoted by Arm & Hammer. Not to be confused with Armand Hammer, the Gore family friend, benefactor* and chairman of Occidental Petroleum. As Wikipedia says:

It is often claimed, incorrectly, that the brand name originated with or is related to tycoon Armand Hammer, who owned a considerable amount of Church and Dwight stock in 1980s and served on its Board of Directors. In fact, Hammer only bought a portion of the company as a joke.
Mr. Hammer wasted a lot of his shareholders' money and the stock rose upon news of his death. First time I had noticed such a thing.

On to the story. In November we had this post
"Can baking soda curb global warming?"**
If it works, it's huge. Worth the read, I promise.

*Here's the Wall Street Journal's John Fund on the Gore family's zinc mine. There are a whole lot of OXY/Gore links; some say Al Gore Sr. was a wholly owned subsidiary of Mr. Hammer.

**Here's a Skyonic investor:
TXU takes stake in Skyonic, will test pollution system in '07

Here's another approach, from Carbon8Systems:

Dr Paula Carey of UK start up Carbon 8 Systems explains how an innovative new carbon capture technology built around a simple chemical process has the potential to cut carbon emissions from waste incinerators and save businesses money...MORE

Friday, April 25, 2008

Schism: Australian cardinal disputes global warming theory. AND: Green monks and nuns on the march

During the Western Schism (1378-1417) there were, at minimum two, and for a while, three Popes serving at the same time. Rome, Avignon and Pisa. It confused the peasants. Gibbon, in the Decline and Fall comments on one of the Anti-Popes, John XXIII:

...Of the three Popes, John the Twenty-third was the first victim; he fled and was brought back a prisoner, the most scandalous charges were suppressed; the Vicar of Christ was only accused of piracy, murder, rape, sodomy and incest...
a passage which titillated a few generations of English schoolboys. Here are two stories from EnerPub:
Cardinal George Pell, in an article entitled "Global warming is over", referred to "an intolerant bandwagon with loud, exaggerated claims that the issue is settled". Climate change, he said, is an issue that is far from settled in the Sunday Telegraph....MORE
Three hundred members of religious orders are expected to demonstrate outside of Parliament on April 23 in London to ask legislators to 'kick the carbon habit' for the sake of the poor....MORE

Let The Sun Shine Through: Solar ETFs Compared (Claymore, Van Eck; TAN, KWT)

From Index Universe:

The boom in alternative energy stocks has given rise to a boon in alternative energy ETFs. More than a half-dozen funds launched in the past two years, and more are on the way.

The newest wrinkle is funds that focus on specific technologies. Specifically, two ETFs have launched in the past month that provide access to the solar energy market.

How should investors choose between the Claymore MAC Global Solar Energy Index ETF (NYSE Arca: TAN) and the Market Vectors - Solar Energy ETF (AMEX: KWT)?

The choices aren't obvious. Both funds offer exposure to the global solar energy market and both charge 0.65% in expenses.

But if you dig deeper, there are important differences that will translate into different performance in different cycles.

Let's take a look.

TAN And KWT Compared

The place to start is with the index methodology. The Claymore ETF (TAN) tracks the MAC Global Solar Energy Index, while the Market Vectors ETF (KWT) tracks the Ardour Solar Energy Index.

Both indexes aim to provide global exposure to the solar energy market. Both hold stocks listed on exchanges in developed markets around the world, although many of those stocks are headquartered in emerging markets like China.

Creating A Pure-Play Index

The challenge in creating a good solar energy index is that many players in the solar market are conglomerates: giant companies like GE that get just a small fraction of their income from solar energy.

The success or failure of the solar market won't have much of an impact on these diversified behemoths. So, including them in an index in theory at least makes the index less sensitive to the solar market.

To avoid this problem, both indexes have screens and/or weighting systems in place to emphasize "pure plays.">>>MORE

Kansas: Coal Plants, Maybe; Machine Guns, Yes

We're not asking for a jukebox or a pizza oven!
Captain Sloan:
Oh, I can let you have one of those.
Henry Blake:
No kidding! That would be great on movie nights! You got any of those pizza requisition forms?
Captain Sloan:
Oh, just use one of those standard S-1798s and write in "pizza" where it says "machine gun."
-M*A*S*H, episode 12, season 2 "The Incubator"

Kansas coal dispute seen as important for national policy
Smaller coal plant deal offered to Sebelius
Sebelius must not knuckle under to bad coal plant compromise

House Clears Way For Kansans To Own Machine Guns

Sebelius signs machine gun bill

To quote Maril Hazlett at the CEP blog:
...Reactions to the compromise range, naturally, from “what do you mean, this offer represents a compromise?” to “maybe this is as good as we can get.” One thing the reactions all have in common is “wow I am so tired of this mess.”

Options Now Trading on Claymore Global Solar ETF (TAN)

From the press release:

Claymore Securities, the third-fastest growing exchange-traded fund provider in 2007*, today announced that the NYSE Arca Options began trading options on the Claymore/MAC Global Solar Energy Index ETF (TAN). Listed on the NYSE Arca on April 15, 2008, TAN is the first solar ETF to provide investors a cost-efficient means of accessing the fast-growing global solar power industry. Trading more than 1 million shares on its second day on the market, the Claymore/MAC Global Solar Energy Index ETF has an average daily trading volume of 536,494 shares with $42,726,460 million assets under management in only its first week of trading. Past performance is no guarantee of future results.

The instant popularity of TAN acknowledges the maturing of the solar energy industry and reflects investor interest in funding solar power development, said Christian Magoon, President of Claymore Securities, Inc. The opportunity to now trade options on TAN allows for additional investor interest.”...

Sequoia Fund to Reopen to New Money

From the Wall Street Journal:

The Sequoia Fund, after experiencing selling by investors, is reopening its doors May 1 to new investors for the first time since 1982.

The $3.5 billion value fund is celebrated for outperforming the broader market during much of its 38-year history. For years, it was run by legendary stock picker William Ruane, who followed the same approach as Benjamin Graham and Warren Buffett....MORE

Based on Our Proprietary "What's on T.V." Timing Model...

UPDATE: Got the print. Tape must be running late.
UPDATE II: The WSJ's MarketBeat blog pulled the "Mr. Gaffen" comment below. As David Letterman reputed to Dan Rather: "What up Dog?"*

Well that's a thousand DJIA points. I attempted to congratulate David Gaffen at MarketBeat but didn't get a print on the comment. I'll try a less direct method:

Mr. Gaffen,
Congratulations are in order. It appears, based on the 1:06 p.m. timestamp, that we are up 1000 DJIA points since your Mar. 17 "Abby Joseph Cohen" market call.

Because we had the advantage of combining your call with our proprietary "What's on T.V." Timing Model (backtested to February) we were able to make the "Buy" call intraday, at DJIA 11,806.

Here are our posts from March 17:

BUY; BUY; BUY (for now) Bottoming The Market

Salvador Dali and Abby Joseph Cohen

*Top Ten Signs Dan Rather Doesn't Give A Damn Anymore:

10) He changed his name to D. Riddy

9) Coming back from commercials, he's in no hurry to put away the Gameboy

8) Refers to all foreign leaders as "Senor Slim"

7) Told viewers each time he says name "Kofi Annan" everyone does a shot

6) Every night a story about Peter Jennings' alleged hooker addiction

His "if Jack Nicholson did the news" was barely funny the first time

4) During broadcast, answers his cell phone, "What up dog?"

Attended a recent fundraiser wearing swan dress

Throws a quarter at the camera and screams, "You want news? Buy a damn paper"

1) Frequently says, "I'm Dan Rather and I'd rather be gettin' it on"