Millionaire porn

From FT Alphaville:

The environment for millionaires remains challenging over the next 6-12 months, but long term, the trend remains intact, reports Merrill Lynch, in its annual World Wealth Report....

They are just so earnest.

Costly Chemistry: Dow Hikes Prices Another 25 Percent

From CFO.com:

Second major rise by the company this month, added to other corporate reactions to costlier energy, adds to inflationary fears.

A broad price increase announced by Dow Chemical, raising the price of its products by as much as an additional 25 percent in July, is the latest pass-through blow to companies. Dow said the rises are an effort to offset "the continuing relentless rise" in the cost of energy and hydrocarbon feedstocks.

The latest price hikes come just weeks after Dow announced it would raise prices by 20 percent....MORE

A123 Systems plugs lithium-ion batteries into power grid

From cnet:

A123 Systems has signed on electricity utilities to use its lithium-ion batteries for short-term energy storage, according to a company executive.

The company, spun out of the Massachusetts Institute of Technology, is a closely watched venture that is best known for activity in the auto and power tools markets.

It is working with General Motors for plug-in hybrids and Think for all-electric town cars. A123 Systems also owns Hymotion, a company that converts hybrid cars to plug-in hybrids.

But lithium-ion batteries, already used in millions of consumer electronics devices, can be plugged into the electricity grid as well, according to the company.

A123 Systems is working with investor General Electric to use A123 batteries for "grid stabilization," said Ric Fulop, founder and vice president of business development, on Tuesday. He spoke on a panel of energy storage experts organized by the New England Clean Energy Council....MORE

HT: earth2tech

A New Crop of Ag-Stock Deals? (ADM; BG; CPO)

From BusinessWeek:

Bunge's $4.4 billion deal to buy Corn Products could signal a new round of consolidation. Could ADM be the next big player to make a move?

With corn prices soaring (BusinessWeek.com, 6/18/08) since the floods in the Midwest put an estimated 3.3 million acres of crops under water, it's not surprising that companies with global reach and, more important, financial strength are looking to solidify their position in this increasingly vital market.

That's likely part of the rationale for food conglomerate Bunge's (BG) plan to buy Corn Products International (CPO) in an all-stock deal announced on June 23 and valued at $4.4 billion, or $56 for each share of Corn Products. The purchase price includes the assumption of roughly $414 million of Corn Products' net debt....MORE

Britons fear the carbon cops are coming: survey

I don't know what to make of this. If the poll results are accurate it puts carbon politics in a whole 'nuther light. And I did check the sourcing. From Reuters:

First there were the thought police, then the surveillance society, now Britons fear the carbon cops are coming to ensure compliance with climate change legislation, a survey showed on Wednesday.

And with warnings of global catastrophe ringing in their ears some people fear that failure to cut personal carbon emissions will eventually result in enforced carbon behaviour re-education, the Energy Saving Trust said.

It said 41 percent of Britons think the country will need its own Carbon Police Force by mid-century and one quarter believe repeat offenders will have to go into carbon rehab and take carbon addiction classes....MORE

McKinsey on the economics of solar

From Grist:

Business consulting firm projects robust growth for solar and grid parity in many locations by 2020

McKinsey has a great new analysis piece: "The economics of solar power." Overall it's extremely optimistic, saying that despite uncertainties around technology and policy, growth in the solar sector is all but certain to be robust.

Here's a interesting chart. The size of the yellow ball is the size of the solar market in TWh. The upper right of the chart is "grid parity" -- i.e., solar electricity selling for roughly the same price as fossil electricity....MORE

Iceland on High Alert

From Planet Gore:

...MARAUDING polar bears could cause terror on Iceland after experts claimed global warming could bring the killer beasts across the sea....

...Climate expert Thor Jakobsson said: "Since two have reached the shore, more could be on the way."

Thor is calling for aerial surveillance of the ice, as well, to protect the Icelandic population:

“Since two bears have already reached the shore, more could be on the way, but there’s no telling whether this trend will continue in the coming years.

“Surveillance of the drifting ice must be improved. It has obviously not been taken good care of.

"Thin and filmy ice can easily reach over the canal between Greenland and Iceland, but cannot be spotted from satellite, so planes must fly over the area regularly to locate the ice and identify the polar bears.

"It is better to know if they are on the way,” Mr Jakobson concluded.

I would think that the Viking forebears of Mr. Jakobson are rolling over in their proverbial graves right about now.

For some reason I couldn't get this out of my head:

Here's "Viking Kittens" set to Led Zepplin's "Immigrant Song"

Ah, ah,
We come from the land of the ice and snow,
from the midnight sun where the hot springs blow.
The hammer of the gods
Will drive our ships to new lands,
To fight the horde, singing and crying:
Valhalla, I am coming!
On we sweep with threshing oar,
Our only goal will be the western shore.

World Meteorological Organization: Small Chance of El Nino this Year

From Reuters:

There is a small chance that an El Nino weather pattern will develop in the second half of 2008, the World Meteorological Organization (WMO) said on Tuesday.

The El Nino phenomenon, characterized by warming of Pacific Ocean surface waters, can lead to higher temperatures worldwide and is often associated with drought in typically wet areas.

"For the second half of the year, the chance of an El Nino developing is small, but it cannot be ruled out," the WMO said....MORE

Solar Energy ETFs: Don't Get Burned (KWT; TAN)

From BusinessWeek:

These volatile indexes show that sometimes there's little safety in numbers. Analysts suggest picking individual stocks instead...

...No Safe Haven

Unfortunately for investors, the ETFs have turned out to be almost as volatile as the individual stocks. Both were down more than double the Standard & Poor's 500-stock index's 1.7% drop on June 20. "Just buying the whole [solar] market means you just follow its ups and downs," says Morningstar (MORN) analyst Rick Hanna, who follows solar energy stocks. "If you do your homework, you should be able to do better than that."

That's because both funds are made up of mostly the same group of small- and mid-cap stocks. As of Mar. 31, First Solar was the largest holding in the indexes underlying both ETFs, comprising 9% of the Claymore fund and 11% of the Van Eck fund. Large-cap stocks generally don't meet the qualifications for the indexes underlying either fund, which require at least 33% of revenue from solar activities in the case of Claymore and 66% for the Van Eck fund. Index Universe Editor Matthew Hougan posted an in-depth comparison of the ETFs in April....MORE

Plan to bar funds from commodities garners few fans

From MarketWatch:

Of Lieberman's three proposals, most extreme finds fewest adherents

A proposal to ban large pension funds and other institutional funds from commodities trading was sharply criticized Tuesday, with a U.S. senator who is working on legislation to curtail energy speculation also arguing against the ban.

"While I believe that the influx of money by pension funds" and other financial investors "has had a detrimental impact on prices, prohibiting investments risks harming future and current retirees," said Sen. Susan Collins, R-Maine, at a hearing before the Senate's committee for homeland security and government affairs, which was Web cast....

... One exemption under scrutiny by both regulators and lawmakers is what's known as the "swaps loophole."

It effectively gives investment banks such as Goldman Sachs Group, Inc. and Morgan Stanley an exemption from limits on speculative futures positions when they buy these contracts as a hedge against their contracts with pension funds and other large investors. Masters and others claim the exemption has allowed pension funds to build large futures positions while avoiding the CFTC's rules on speculation....MORE

Life After Ags (AGU; MON; MOS; POT)

From Minyanville:

Where did that come from? I’m talking about that whiff of spunk that swept through the market a couple of hours ago. Was the move off the lows in the same genus as the oversold bounce and jellyfish?

In other words, is this the real deal: Does this move have a backbone? Breadth is grudgingly changing but declining issues continue to dwarf advancers. I do sense an attempt at rotation as hot niches of the market continue to gyrate. Agricultural stocks are one that has begun to struggle a little. Even an increase in the share price target of Potash (POT) hasn’t stopped it from getting hit today. It’s the same across the board with CF Industries (CF), Monsanto (MON) and Agrium (AGU) all giving back a few points. That in of itself isn’t a big deal, especially with high beta stocks, but something else is developing that raises yellow flags....MORE

Five Bargain Stocks (AMAT)

Regular readers know that we think AMAT is a class act. Apparently some other folks do as well. We've got a link on the recent patent dispute, below.
From the Wall Street Journal:

Several stock sectors have collapsed over the past year, including banks, department stores and homebuilders. However, the smart money is starting to pick up the pieces.

The valuations of some of the most beaten-up companies seem too low to overlook, even with the nation's faltering economy.

We canvassed money managers and combed balance sheets, looking for the best combination of cheap valuations and solid businesses. The result: five stocks whose better days should be ahead of them....

...Applied Materials ($20)
Applied Materials is the leading maker of microchip-manufacturing equipment, but that hasn't helped much lately as the microchip industry has struggled. But the firm's valuation is close to its low point for the past decade, and the company is sitting on almost $2 billion in cash.

In the meantime, Applied's chip-equipment-making prowess translates well into machinery to make solar panels. Buying the stock now gives investors a chance to capitalize on both a chip-sector rebound and the growing solar-cell market....

From Reuters:

Applied Materials says did not infringe patent

Applied Materials Inc (AMAT.O: Quote) said on Monday its SunFab thin film solar technology does not infringe on a European patent held by Switzerland's University of Neuchatel.

The announcement by the maker of equipment for both the semiconductor and solar power industries came after Swiss technology group Oerlikon (OERL.VX: Quote) said earlier this month its intellectual property was being infringed by Germany's Sunfilm AG, an Applied Materials customer....MORE

Marc Faber Favors Commodities as Inflation Quickens

Faber is one of the bright ones.
From Bloomberg:

Japanese stocks, Asian real estate and commodities are investors' best bets as faster inflation erodes returns in the rest of the world's markets, investor Marc Faber said.

``Demand for commodities and oil will not vanish,'' Faber, the Gloom, Boom & Doom Report publisher, said at a conference in Tokyo. ``The shift in demand that drove up commodity prices is not going to go away.''

Inflation may boost Japanese share prices and Asian property will benefit as more people gain access to mortgages, Faber said. Japan's Topix Index has fallen 8.6 percent in 2008.

``For Japan, inflation is favorable,'' Faber said, because it ``will bring cash out of the mattress and into equities and real estate.''>>>MORE

Green Ceiling: Are High-Flying Alternative-Energy Stocks Due for a Fall?

Dow Jones & Company is a treasure. Two of the last three links were to the online Journal and MarketWatch. This one is to a Journal blog. From Environmental Capital:

Alternative energy companies have long cheered high oil prices, figuring it would make them even more competitive and attractive. But even if there’s seemingly no limit to oil-price rises, clean-energy stocks are hitting the wall.

Plenty of governments around the world, from London to Beijing, are falling over themselves to promote renewable energy like wind and solar power—both to fight climate change and offer succor against ruthless fossil-fuel price hikes. Even where governments aren’t quite promoting clean energy (like in the U.S.), the market is doing the rest, driving record growth in wind power....MORE

Gas could fall to $2 if Congress acts, analysts say

Holy downtick, Batman!
From MarketWatch:

The price of retail gasoline could fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy-futures markets, four energy analysts told Congress on Monday.

Testifying to the House Energy and Commerce Committee, Michael Masters of Masters Capital Management* said that the price of oil would quickly drop closer to its marginal cost of around $65 to $75 a barrel, about half the current $135.

Fadel Gheit of Oppenheimer & Co., Edward Krapels of Energy Security Analysis and Roger Diwan of PFC Energy Consultants agreed with Masters' assessment at a hearing on proposed legislation to limit speculation in futures markets.

Krapels said that it wouldn't even take 30 days to drive prices lower, as fund managers quickly liquidated their positions in futures markets.

"Record oil prices are inflated by speculation and not justified by market fundamentals," according to Gheit. "Based on supply and demand fundamentals, crude-oil prices should not be above $60 per barrel."

Futures trading in London has not been a major factor in rising oil prices, testified Sir Bob Reid, chairman of the Chairman of London-based ICE Futures Europe. Rising prices are largely a function of fundamental supply and demand, not manipulation or speculation, he said....

...There are two kinds of speculators in the futures markets, Masters said. Traditional speculators are those who need to hedge because they actually take physical possession of the commodities. Index speculators, on the other hand, are merely allocating a portion of their portfolio to commodity futures.

Index speculation damages price-discovery mechanisms provided by futures markets, Masters added...MORE

Compare to this insightful comment (he said modestly)
Responding to MarketBeat's post "On Speculation and Commodities Prices"

There is a real nomenclature problem here.
“Speculators’ is the word we used to use for the guys in the pits who took the other side of a commercial’s hedging activity.
Calling the index fund investors “speculators” is a misnomer.
In commodities speculators perform a societal good. Investors, not so much.
Here’s a simple thought problem:
What would happen to prices if $200 Billion of the estimated $260 Billion that has gone into commodities indexes was taken out?
If your answer is “prices would go down” then you’ve also got the answer to what the INflow of “investment” dollars has done.
.
Re: “…commodity derivatives contracts outstanding could well grow at a rate faster than other derivatives markets…”
Commodities are also underrepresented in the structured product universe.
Collateralized Commodity Backed Obligations anyone?
Commodity SIV’s?
Hybrids?
Synthetics?
Just be sure you’ve got the helicopter gassed up because when the townsfolk come, it won’t be with pitchforks and torches.
And pinstripes make lousy protective coloration. As they used to say in the Brit. nature shows:
“Sadly now, there can be but one outcome…”

Comment by Climateer - June 17, 2008 at 4:47 pm

*Oil Markets, the U.S. Senate and Michael Masters

As some of you suspected, Michael Masters, the hedge fund manager who testified before the Senate a couple weeks ago, was partially talking his book.
Here are the names that would be positively affected by lower oil prices:

AMR- American Airlines
DAL- Delta Airlines
LCC- US Airways
UAUA- UAL Corp.
GM- General Motors

First Solar: World's Biggest Solar Plant Goes Online in Germany (FSLR)

From Deutsche Welle:

A solar power plant described by its operators as the biggest in the world began generating electricity at the site of a former East German air base on Sunday, June 22.

The Waldpolenz Solar Park is built on a surface area equivalent to 200 soccer fields, the solar park will be capable of feeding 40 megawatts into the power grid when fully operational in 2009.

In the start-up phase, the 130-million-euro ($201 million) plant it will have a capacity of 24 megawatts, according to the Juwi group, which operates the installation....MORE

Weather and Natural Gas

This article looks at the historically high summertime nat gas price. More concerning to me is what happens this winter.
From the Wall Street Journal:

Prices Could Climb
If Summertime Heat
Is Worse Than Usual

Natural-gas prices, up 74% since the year began, could be headed higher amid predictions of an unusually hot summer in parts of the nation. If those forecasts play out, air-conditioner use will rise -- and with it, demand for electricity production fueled by natural gas, possibly driving futures prices to records.

In Washington and Saudi Arabia, where world leaders gathered during the weekend to discuss high energy prices, much of the focus was on the price of oil, which remains near its highest closing on record. Natural-gas prices have been soaring despite increased domestic production.

Natural-gas futures settled Friday at $12.994 a million British thermal units, up 11% in June and up more than 82% from 52 weeks ago. Prices are off about 16% from the record close of $15.378 a million BTUs set Dec. 13, 2005, in the wake of hurricanes Katrina and Rita, which disrupted natural-gas production in the Gulf of Mexico....MORE

HT: Environmental Capital

Solar gear makers climb on Japan's green ambitions

From Reuters:

Japan is poised to provide subsidies and tax breaks for solar panel makers next year to maintain its hold on the red-hot industry, two officials at its Ministry of Economy, Trade and Industry said.

The news drove up shares of makers of solar equipment on Monday on expectations that the measure would further spur demand for green energy....MORE

Lehman Jacks First Solar (FSLR) Target to $335, Sees Q2 Upside

From ClusterStock:

Lehman is undeterred by all the recent negativity surrounding First Solar (FSLR). Upside to Q2 estimates, target up $55 to $335:

FSLR continues to remain our high conviction idea into Q2 earnings as we expect significant upside to street estimates from better than expected output in Malaysia, gross margin expansion and positive currency impact. We believe concerns over potential margin pressure and increased competition are unwarranted. Raise PT to $335....MORE

Bunge Agrees to Buy Corn Products for $4.2 Billion (BG; CPO)

Well, except for having the wrong acquirer and the wrong target we nailed the buyout.*
From Bloomberg:

Bunge Ltd., the world's largest oilseed processor, agreed to buy Corn Products International Inc. for $4.2 billion in stock, gaining control of corn-based sweeteners at a time of record grain prices.

Bunge will pay the equivalent of $56 for each share of Westchester, Illinois-based Corn Products, Bunge said today in a statement. That's 31 percent more than Corn Products' closing share price of $42.90 on June 20.

Bunge Chief Executive Officer Alberto Weisser will gain control of refining operations that sell high-fructose corn syrup and food additives to customers including Coca-Cola Co. and PepsiCo Inc. Bunge, founded 190 years ago, buys grains from farmers across North America, South America and Europe....MORE

*Three Quarters of Ethanol Plants to Shut Down?