Thursday, June 30, 2011

IEA Already Considering Extending Oil Release Period, Fireselling More Crude To China

Sure, why not?
And when U.S. bacon prices start to reflect the move in pork bellies, China will bust open their Strategic Pork Reserve, right?
Chart via FinViz:

From ZeroHedge:
Following the abysmal decision by the Obama administration, presented in IEA letterhead, to release crude stockpiles, the resulting lower prices lasted less than one week, and in the case of gasoline, the price has actually surged way above the decision day fixing.

So what is an administration with no credibility to do? Why double down of course, and sell even more crude at firesale prices to the Chinese.

Per Reuters: "The International Energy Agency could decide by mid-July whether the release of strategic oil reserves needs to be extended for a month or two, an official said."...MORE

Corn plunges on “shocking” USDA report

From the Des Moines Register:
Corn futures dropped 59 cents per bushel to $6.39 for the July contract and 30 cents per bushel to $6.20 for the December at the opening of the Chicago Board of Trade after the U.S. Department of Agriculture surprised the market with a report that the number of acres planted for corn rose 5 percent this spring to 92.3 million acres.

“The report this morning caught the trade by complete surprise,” said broker Tomm Pfitzenmaier of Summit Commodities in Des Moines. “The planted acres were well above the highest of the trade estimates. Apparently the high price of corn did entice farmers to plant many more acres than were expected.”
Don Roose of US Commodities in West Des Moines said “the market sent a signal to farmers to plant fence row to fence row, and they did. Now we’re going to find the true value of corn.”

Arlan Suderman of Farm Futures Magazine said the market was “shocked” by the report.
“USDA shocked the grain trade with mostly bearish data this morning,” Suderman said. “This was a year when everything needed to go right to get the acres planted and very little did go right, outside of Iowa. It is also a year when end users are scrambling trying to find supplies ahead of the approaching harvest. Yet, USDA found the bushels and acres somewhere, with both above trade expectations in most categories.”
The report is expected to cause a sharp drop in corn prices, which have fluctuated wildly most of this year. Corn reached a 2011 high of $7.99 per bushel in early June, then lost $1.50 per bushel as investors became nervous about international market conditions. Corn had regained about 45 cents of its losses in the last two days....MORE

Dearie Me, It Appears the First Solar Shorts are Under Assault (FSLR)

The stock is up $9.23 at $138.65.
Today's big news is "First Solar (NASDAQ:FSLR): Home run on loan guarantees - Credit Suisse", upon which Notable Calls comments:
...Notablecalls: This is easily the most significant piece of Solar news this summer. These FSLR contracts were signed around 2008, which means the terms are very favourable in terms of pricing vs. today. The DOE loan guarantees provide very cheap financing, which further amplifies the profitability of the projects. The upside could be $5-6 in EPS in 2012/13.

Most analysts were expecting 1 or 2 of the projects to get DOE backing but NONE expected a slam-dunk (all 3) decision we got today.

Solar has been extremely out-of-favour sector evidenced by the whopping 46% short interest in FSLR. I would call this an explosive combo.

I expect FSLR to trade $140-145 range today. Yes, I'm expecting a $10-15 pt move.
I was early with "First Solar: Short Squeeze Being Set Up (FSLR)" on May 26th at $120.55 and with
"German Nuclear Decision: Phase One of First Solar Short Squeeze (FSLR; GS)" on May 31 at $124.75.
Here's the chart:


The June 8 low was a bit scary but as I said in "Thoughts on Markets, Investing and Life":
"The original title of this book was 'Jimmy James, Capitalist Lion Tamer' but I see now that it's... 'Jimmy James, Macho Business Donkey Wrestler'... you know what it is... I had the book translated into Japanese then back in again into English. Macho Business Donkey Wrestler... well there you go... it's got kind of a ring to it don't it?

Anyway, I wanted to read from chapter three... which is the story of my first rise to financial prominence...

I had a small house of brokerage on Wall Street... many days no business come to my hut... my hut... but Jimmy has fear? A thousand times no. I never doubted myself for a minute for I knew that my monkey strong bowels were girded with strength like the loins of a dragon ribboned with fat and the opulence of buffalo... dung.

...Glorious sunset of my heart was fading. Soon the super karate monkey death car would park in my space. But Jimmy has fancy plans... and pants to match. The monkey clown horrible karate round and yummy like cute small baby chick would beat the donkey."
Well there you go. Pretty much says it all.
(okay, that wasn't really me. It was Jimmie James, News Radio -Episode #57 "Super Karate Monkey Death Car by way of
We're looking for an entry to short the entire market, I think it will be today or tomorrow and that up-gap on FSLR looks like a target.

Here's our June 2 post:
First Solar Chartology: Mind the Gaps (FSLR)
The stock is up 83 cents at $120.54.
It still amazes me how many times a stock or commodity will fill the gap on a chart.
I've been at the market for my entire adult life, going back to the days of CycleCharts and other chart books [tell them about the quill pens -ed] and it is one of the basic tenets of technical analysis that still has a statistically meaningful result.

That said, when I was a pup there was an older analyst who would not buy into the 18-year bull market that started on August 12, 1982 at DJIA 776 because of a gap on the Dow's chart dating back to 1973 or '74 in the 590 area.

He died poor and crabby....

...Here's the six month chart showing the gaps at the round numbers, 130 and 140:

Betting the Farm: Debt Brings Risk of Losing it All

The risk for farmers is the same as that faced by the U.S. government.
It's not the debt per se, it is the cost of servicing it. Low interest rates seduce borrowers into taking on more debt than they should because the current interest cost is manageable. Should rates increase the proportion of cash flow that must go to debt service can crowd out any other use.

I touched on this problem during the run-up to the 2010 mid-term elections in "For My Republican/Conservative/Tea Party Friends: "Here is where all that Government Spending is Really Going". In a November post, "U.S. Government Debt Service to Surpass Military Outlays by 2016" we had a chart showing Federal interest payments rising from a bit over $200 billion/year to $800 billion, $600 bil. that could go toward productive purposes but instead would be used to keep the collection agency from calling.

From Agrimoney:
Large, young farmers at risk if land prices tumble

A rise in borrowings for buying tractors has raised the threat of agriculture insolvencies if the farmland market collapses, with large operations, and younger farmers, at greatest risk, America's central bank has warned.
The debt-to-asset ratio on farms run by bosses aged less than 35 has already reached nearly 40%, "a level that has signalled significant insolvency risk in the past", thanks to their greater willingness to run up debts, the Federal Reserve said.
The ratio could reach "dangerously high" levels if the farmland market suffers the kind of collapse today that did in the 1980s, the last major correction, when values halved during the decade.
With big enterprises also notable leveraged, "the number of large farmers facing insolvency could more than double, and the number of young operators [facing insolvency] could quadruple", the Fed's Kansas City bank said.
'Risks could intensify'
The bank said that the nature of debt was also behind them categorising large operations, or those with a youthful boss, as higher risk, with non-land loans  - for buying items such as tractors, combines and silos -  forming a bigger proportion of total borrowings.
"History has demonstrated that high debt levels are a concern, but high non-real estate debt levels can be devastating," the bank said.
And loans for farm equipment and machinery had been on the rise, up 73% in the January-to-March quarter, compared with the year before, according to official data.
"The industry's experience from the 1980s farm bust suggests that if the current run-up in non-real estate debt accelerates, the risks for farm bankruptcies could intensify should farmland values turn down abruptly."...MORE
From the University of Illinois' Farmdocdaily:
FOMC Policy: Potential Linkages to Farm Interest Rates
The Federal Open Market Committee (FOMC) met this past Tuesday and Wednesday. The statutory dual mandate of the Committee is to foster maximum employment and price stability. From the FOMC statement: “The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan." The Committee decided to keep the target range for the federal funds rate at 0 to ¼ percent and conditions likely warrant low levels for the federal funds rate for an extended period.

Continuing macroeconomic problems in Greece, a depressed U.S. housing market and disappointing May unemployment data raise concerns that economic growth may slow and be weaker than expected. A key question is whether this is a soft patch and just a temporary issue or is the economy actually at a tipping point with a substantial prospect for a double-dip recession as suggested by Yale economist Robert Shiller.
One implication of recent FOMC policy is the increased probability that interest rates on farm loans will remain low for the next few months. Figure 1 shows that interest rates to farmers are at historically low levels. The average interest rate on loans to farmers from banks with agricultural portfolios greater than $25 million was 3.89 percent in the first quarter of 2011. Almost 50 percent of the loans made to farmers were less than 5 percent while over 75 percent were less than 6 percent.


A potential risk for borrowers is that they became more indebted than they otherwise would have under normal interest rate environments. A general rule of thumb is that interest costs on farms should not exceed 20 to 25 percent of gross farm income. Figure 2 shows that interest expense as a proportion of value of farm production (VFP) has decreased in this decade. The median level for Illinois FBFM is less than 3 percent while 75 percent of Illinois FBFM farms are less than 5.1 percent....MORE

From the KC Fed:
Farm Balance Sheets: The Hidden Risk of Non-Real Estate Debt
(5 page PDF)

USDA: Planted Acreage Increases, Prices Slip (WEAT; CORN; MOO)

Yes, those are ETF symbols.
Corn and wheat are now down fractionally.
USDA releases bearish data
The U.S. farmers planted a lot more corn acres in 2011 than the trade expected, according to the USDA Thursday. In its June Acreage and Quarterly Grain Stocks Reports, the government released very bearish data.

The Early Calls for commodities for Thursday's trade are as follows: Corn 30 cents (daily limit) lower, soybeans 20-25 cents lower, and wheat to follow, according to the CME Group floor traders.
For corn, the USDA's estimate of 92.3 million acres is above the average trade estimate of 90.776 million and below the March estimate of 92.178 million.

USDA estimates the 2011 U.S. soybean acreage at 75.2 million, vs. the average trade estimate of 76.476 million and its March estimate of 76.609 million.

In its report, the USDA sees the U.S. 2011 All Wheat acreage at 56.4 million vs. the average trade estimate of 56.607 million and its March estimate of 58.021 million....MORE
 From the Houston Chronicle:
Farmers plant more corn, could slow food inflation

That's the way ag commodities work. Prices go up and more acreage gets planted. Corn trades at a premium to wheat and the farmers see a 'gold' rush in corn.

USDA: Corn Stocks Down 15 Percent from June 2010 Soybean Stocks Up 8 Percent All Wheat Stocks Down 12 Percent

Last night there were traders who couldn't sleep in anticipation of this report.
They should be able to catch a nap today, corn and wheat are down a quarter-percent, soybeans are up less than that.
Coming up, acreage.
From the USDA's Grain Stocks Report, June 30, 2011:
Corn stocks in all positions on June 1, 2011 totaled 3.67 billion bushels, down 15 percent from June 1, 2010. Of the total stocks, 1.68 billion bushels are stored on farms, down 21 percent from a year earlier. Off-farm stocks, at 1.99 billion bushels, are down 9 percent from a year ago. The March - May 2011 indicated disappearance is 2.85 billion bushels, compared with 3.38 billion bushels during the same period last year.

Soybeans stored in all positions on June 1, 2011 totaled 619 million bushels, up 8 percent from June 1, 2010. On-farm stocks totaled 218 million bushels, down 6 percent from a year ago. Off-farm stocks, at 401 million bushels, are up 19 percent from a year ago. Indicated disappearance for the March - May 2011 quarter totaled 630 million bushels, down 10 percent from the same period a year earlier.

All wheat stored in all positions on June 1, 2011 totaled 861 million bushels, down 12 percent from a year ago. On-farm stocks are estimated at 131 million bushels, down 38 percent from last year. Off-farm stocks, at 730 million bushels, are down 5 percent from a year ago. The March - May 2011 indicated disappearance is 565 million bushels, up 48 percent from the same period a year earlier. ...MORE (19 page PDF)

Reuters on the IEA Oil Stockpile Release: "Europe oil stocks sale begins, market confused" (MRO;TSO; VLO; WNR)

In the U.S. the refiners are not beating down the door to buy the SPR oil.
From Reuters:

Sales of emergency oil stocks began in Europe on Wednesday, as part of a plan by consuming nations to cool prices, but traders complained about confusing signals from different countries and industry lobbies warning of price spikes.

The West's energy watchdog, the International Energy Agency, shocked energy markets last week by announcing the release of 60 million barrels of oil and products to compensate for the loss of Libyan crude. The aim was to prevent high oil prices from hitting a fragile economic recovery.

In the United States, strategic petroleum reserve (SPR) officials were in daily contact with market participants to explain how 30 million barrels of public oil stocks would be released. In Europe, however, which suffered most from the loss of Libyan oil, the process looked less organized.

Germany became the first European country to launch tenders, and the Netherlands was expected to follow suit. But, the IEA said, its breakdown of the release of 19.2 million barrels of public and industrial oil and products by individual European country could still change.

"The bottom line is that we don't know how the breakdown will appear, and the numbers we have put in the table are preliminary and have probably over-exaggerated the weight of products," the agency's head of energy markets and security, Didier Houssin, told Reuters....MORE

Tudor, Pickering, Holt & Co.: "A conspiracy among gas drillers or those who write about them?" (NYT; CHK; DVN; RRC; UNG)

From the Houston Chronicle:

Following is a commentary from Dan Pickering, Chief Energy Strategist of TPH Asset Management, an arm of the energy merchant bank Tudor, Pickering, Holt & Co.

I had to sigh this weekend as I began to receive emails and phone calls regarding the New York Times article entitled “Insiders Sound an Alarm Amid a Natural Gas Rush.” I encourage you to read this article and its companions.

I don’t agree with many of the conclusions that are drawn, but it does serve to illustrate what critics of the energy industry are saying. And there is no doubt that the author (and evidently the New York Times) are indeed critics.

Having spent most of my professional career writing about energy issues, I understand and appreciate the power of the pen. Writing persuasively and interestingly can make a difference. In a world where the news cycle is 24/7 and people are swamped with information, anecdotes are king. The Times article wields cherry-picked anecdotes like a samurai with a sword.
One snippet is as follows:
“Money is pouring in” from investors even though shale gas is “inherently unprofitable”, an analyst from PNC Wealth Management, an investment company, wrote to a contractor in a February email. “Reminds you of dot-coms”.
Wow. That is good stuff. Captivating. Entertaining. But is it the truth? Or is it an opinion?
I’m not sure that PNC actually has any dedicated energy analysts (I couldn’t find any on their website). So perhaps that cool quote came from a high net worth broker? Maybe he/she is a genius with reams of analysis on shale gas decline. Or maybe the observations are based on reading blogs and internet postings. One can’t tell from the anecdote.

Which should I trust more? – the February 2011 $4.7+ billion purchase of Fayetteville shale gas assets by BHP Billiton or the February 2011 anecdotes from an unnamed broker of unknown quality. Follow the money is usually a good credo.

The New York Times also captured the eye-opening and alarming comments of Deborah Rogers, a member of the advisory committee of the Federal Reserve Bank of Dallas.

Her research indicated Barnett shale wells were declining faster than expected. Fascinating. A Dallas Fed adviser has spotted an important issue. But is it the truth? Or is it an opinion? Would I be just as fascinated if the article quoted Deborah Rogers, proprietor of Deborah’s Farmstead, a small Fort Worth family dairy that produces goat cheese? That’s her bio from the 2008 Dallas Fed press release....MORE

Wednesday, June 29, 2011

"A New Investment Strategy: Preparing for End Times"

This is not new.
Here at Climateer world headquarters

Associated Press
HT on the pic: an old MarketBeat post.

we have been  on the doom-beat for years although we don't link to Rosenberg or Roubini very much.*
In fact, seeing their names together (R,R) always reminds me of The Simpsons, episode 7GO2, Bart the Genius:
Teacher:  So y = r cubed over 3. And if you determine the rate of change in this curve correctly, I think you'll be pleasantly surprised.
[The class laughs except for Bart who appears confused.]
Teacher:  Don't you get it, Bart? Derivative dy = 3 r squared dr over 3, or r squared dr, or r dr r.
[you have lost your mind -ed]

I'm also reminded of "Portfolio Insurance" ca. 1987.
From DealBook:
Investment professionals have a new pitch: The sky could soon be falling.

While Greece took a step back from the brink on Wednesday, the possibility of a default remains a fear. Europe’s debt crisis, as well as natural disasters and political uprisings, are prompting investors both big and small to seek out investments that promise to protect their portfolios in the event of economic Armageddon.
Worried that Greece could go belly up? So-called black swan funds — named for rare and unexpected events — offer a way to profit in the event of a market collapse. Think a slowdown in the United States or China could set off a global economic crisis? New exchange-traded funds are popping up to help pad investor confidence.

Since the financial crisis, many investors have prospered from a rebound in the markets. But recent events have led some to brace for the worst.

“Clients are suddenly realizing the world isn’t as rosy as it’s been,” said Ahmed Fattouh, a hedge fund executive. “It makes a lot of sense to have these tail protections on.”

That is, protections against what Wall Street calls “tail risk” — a disaster that is estimated to have less than half a percent chance of happening.

Investors learned about tail risk the hard way. For decades, diversification — spreading holdings across stocks, bonds and other investments — was promoted as the way to protect investments from market crashes. But the financial crisis proved that seemingly unrelated assets could fall in unison. As a result, an increasing number of investors now want protection for financial end times.

These funds and offerings, usually costly and complicated, can be likened to insurance. Investors lose money on them during normal times, but they stand to gain if catastrophe strikes.

Tens of billions of dollars are in such investments, representing a small but growing fraction of the investment word, particularly for a strategy that many investors would have scoffed at five years ago as expensive and unnecessary.

“In the last decade, we saw two stock market crashes, which wiped out any gains for investors over the decade and meant disaster for those who had to take their money out to meet big expenses at market lows,” said Zvi Bodie, a professor of finance at Boston University School of Management. That, he said, “has just made the current generation of investors more aware that it is risky even over a decade or more.”.

Wall Street lawyers say money manager clients have approached them in recent months about forming new funds aimed at providing protection. Banks like Goldman Sachs are marketing tools engineered to bulletproof investors. Products linked to an index known as the market’s “fear gauge” total nearly $2.5 billion. And in the last year, the amount of money managed in dedicated tail-risk accounts by the bond giant Pimco has doubled to $23 billion...MORE
We are fans of Professor Bodie, here are some mentions:
Stocks, Bonds, Pensions and Guarantees
"Turmoil May Make Americans Savers, Worsening `Nasty' Recession"......... Keynes Stops By. And What's up with TIPS Pricing?
"Berkshire May Be Required To Post Up To $8 Billion In Collateral" (BRK.A; BRK.B)

*When dancing the Apocalypto, the AA boys, Ambrose and Albert have much better rhythm.

Guide to Writing About Greece For People Who Can’t Bear To Write About Greece

Kedrosky nails it. From Infectious Greed:
The Greece debt debacle has, it feels like, being going on for most of my adult life. Fine, it may only be a year or so, but it feels much, much longer. I’m way past the point where saying anything else about it is bearable, so, herewith, a Guide to Writing About Greece For People Who Can’t Bear to Write About Greece. [-]
  1. Talk about the U.S. instead. For full contrarian points, say it’s much worse/better/different than Greece.
  2. Say that the market has already discounted the Greece news, whatever it is, so it doesn’t matter.
  3. Tie it all to which banks are being bailed out, and tie that, in turn, back to everything you said about bank bailouts in 2007-8. Feign righteous indignation, or world-weariness, or both, depending on your particular bent....MORE
Reminiscent of this bit of inspired journo-genius:
Attention Journalists: "How to write about pointless international organisations"
The Financial Times' Alan Beattie wrote this bit of brilliance last year for the G8 meeting. His friend Gideon Rachman duly posted it on his FT Rachmanblog. I am reposting it in full to bookmark for future reference:
...Alan then forwarded me a generic column on international institutions that he has written. It really says it all - and I think I may simply reproduce it, every year, round about G8 time.
It goes as follows:
By reporters everywhere
An ineffectual international organisation yesterday issued a stark warning about a situation it has absolutely no power to change, the latest in a series of self-serving interventions by toothless intergovernmental bodies.

“We are seriously concerned about this most serious outbreak of seriousness,” said the head of the institution, either a former minister from a developing country or a mid-level European or American bureaucrat.

“This is a wake-up call to the world. They must take on board the vital message that my organisation exists.”

The director of the body, based in one of New York, Washington or an agreeable Western European city, was speaking at its annual conference...
Just brilliant.
Follow the Rachman link for the whole thing.

Also at Infectious Greed:
Chewing Gum Makes You Smarter

Approaching Anniversary: Jim Cramer Makes One of the Worst Market Calls Ever (DIA; SPY; WB)

Right up there with:
"There may be a recession in stock prices, but not anything in the nature of a crash."
-Prof Irving Fisher, Sept. 4, 1929
(the DJIA had peaked the day before at 381, it would bottom at 41 in 1932),
or Fisher's more famous locution
"Stock prices have reached what looks like a permanently high plateau." on Oct. 21, 1929.
Black Thursday came three days later.

At the time he was one of the most respected economists in the world.

Here's a post from July 30, 2008:
Jim Cramer: "Yes, the Market Has Bottomed"
I respectfully disagree but at least he's humble and lovable.
From CNBC:
If you thought you heard Cramer call a bottom during Tuesday’s Mad Money, you were right.“It smells to me like something, in fact many things,” he said, “have at last changed for the better.”
I am indeed sticking my neck out right here, right now,” Cramer continued, “declaring emphatically that I believe the market will not revisit the panicked lows it hit on July 15. and I think anyone out there who’s waiting for that low to be breached is in for a big disappointment and [they’re] missing a great deal of upside.”
“Stop waiting,” he said, and “buy the next dip because I think it might be the last big one.”
Cramer pointed to five specific clues that proved to him that the market was about to turn up....
...“My bottom call isn’t gutsy,” Cramer said. “I think it’s just a smart call that all the evidence points toward.”“Bye, bye bear market,” he said. “Say hello to the bull and don’t let the door hit you on the way out.”>>>MORE
DJIA closes at 11,583.69 on it's way to 6,547.05.
7 1/2 months later.

I know a lot of folks would argue that Cramer's worst call was Bear Stearns:
Bear Stearns: Jim Cramer Defends His Position, Is Still Hated (BSC)
From Gawker:
"Mad Money" host and bug-eyed madman Jim Cramer went on CNBC today to clarify his statements from last week about Bear Stearns, when he urged people not to move their money out of the firm. As we pointed out earlier in his defense, he was not referring to the company's stock, and his advice was actually perfectly sound....
Go to Gawker for the video.
HT: 1440 Wall Street.
See also: "How To Think About Jim Cramer’s Insane Confidence--Even For A Crazy Person--In Bear Stearns"

While other people might remember his September 15, 2008 buy rec on Wachovia:
Jim Cramer Admits: "I Screwed Up" In Recommending Wachovia Stock Two Weeks Ago Because I Liked The CEO

By Sunday the 28th the Comptroller of the Currency was about to seize the bank unless it was merged or acquired by the start of business on Monday.

On a more positive note, Jim did beat a monkey in a stock picking contest.

Hey Gang! Wanna Run $8,500 to $1.26 Mil? (STJ)

I haven't looked at St. Jude since it had a four letter symbol so if you do anything with this, all the best.
Should you wish to remunerate your humble blogger, well....
[he's thinks it's unseemly to say it: email for IBAN or SWIFT numbers, routing instructions, late night Krugerrand drops etc -ed]

From Phil's Stock World:
A three-legged bullish options combination play on St. Jude Medical cost $8,500 to initiate today, but the strategist responsible for the transaction could walk away with more than $1.26 million in his wallet come January 2012 expiration. The options player appears to have sold puts on the medical devices maker to offset premium required to purchase a bull call spread. Shares in St. Jude Medical are currently down 1.9% to stand at $46.49 as of 1:10pm on the East Coast.
The investor sold 1,700 puts at the Jan. 2012 $40 strike for a premium of $1.70 each, purchased the same number of calls up at the Jan. 2012 $50 strike at a premium of $2.45 per contract, and sold 1,700 calls at the Jan. 2012 $57.5 strike for premium of $0.70 apiece. The net cost of putting on the three-way trade amounts to $0.05 per contract or a total of $8,500. The spread positions the trader to make money should STJ’s shares rally 7.7% over the current price of $46.49 to exceed the effective breakeven price of $50.05 at expiration next year. Maximum potential profits of $7.45 per contract, or $1,266,500, are available to the investor if the price of the underlying stock jumps 23.7% in the next seven months to trade above $57.50 at expiration in January. The trader loses the $8,500 paid to establish the position if shares fail to rally as predicted. Additional losses accumulate if shares are sharply lower at expiration. The short stance in Jan. 2012 $40 strike puts indicates the investor may wind up having 170,000 shares of the underlying put to him at $40.00 each should the options land in-the-money at expiration day. The maximum payload requires STJ…
The stock is up a buck since this was published by Interactive Brokers on June 24. Currently $47.30.

"Thanks Folks, We'll Be Here All Week...."

Via the Dilbert blog:

What Happens To Corn Prices If Ethanol Subsidies Disappear? (ADM; BG; MOO)

I've forgotten who said it but the pithiest comment back in 1990, when the Omnibus budget bill and the EPA mandates on oxygenates teamed up was something to the effect:
The recipe for ethanol?
Combine corn with subsidies...
From the Farmgate blog:
The US Senate votes earlier this month that were for and against continuation of the nation’s ethanol policy indicated the political split over the controversial subsidy program that is designed to enhance ethanol production and foster a declining reliance on petroleum.  The 45¢ per gallon tax credit that goes to blenders helps reduce the cost of ethanol, and the 54¢ tariff is designed to reduce the importation of foreign ethanol.  While Members of Congress feverishly work to re-appropriate the $5 billion spent on ethanol supports among other ethanol programs, it becomes more apparent the subsidies will disappear.  If that happens, what will happen to corn prices, ethanol demand, soybeans, and all of the economic dynamics set in motion by ethanol?

The Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri put its economic models in motion to provide answers to Congress about the impact that the subsidies have on agriculture.  The FAPRI report examines a number of policy scenarios, however the ones that will rise to headline status will be those that show the result of subsidy elimination at the end of the calendar year when they are set to expire.
An expiration of the ethanol supports creates a continuation of ethanol production, but a slowdown in the rate of increased production.  As corn production increases with higher yields, the excess does not become consumed by ethanol, but adds to the carryout stocks and is reflected in exports and domestic production.
The ten year FAPRI forecast for that scenario keeps planted corn acres at the 89 million acre level, and with yield increases up to a 184.5 bushel per acre yield, production climbs from 13.6 bil. bu. in the coming marketing year to 15 bil. bu. by 2020-2021.  Corn being refined for ethanol increases from the current 4.9 bil. bu. to 5.6 bil. bu. in 20/21.  Ending stocks will double, exports will grow by 20%, but farm prices will only be at $4.70 when the ten year period ends, but revenue per acre will edge over $500.

The disappearance of the ethanol subsidy program will have a small impact on soybeans, although acreage will remain static at 77 mil. and yield grows slowly from the current 43 to 48 bu. per acre with total production reaching 3.7 bil. bu.  The domestic crush will slowly grow with the increased production, and exports will likely be locked at 1.6 bil. bu.  Ending stocks will remain steady at 170 mil bu. or less, and farm prices will remain in the 11 dollar range and revenue per acre will grow slightly, but remain under the $400 per acre mark....MORE

Analysts: "The Glencore lovefest" (GLEN.L)

From FT Alphaville:
The IPO research blackout on Glencore International has been lifted this Wednesday, which means the investment banks responsible for the UK’s latest IPO flop are now free to heap praise on the commodities trading house.
From Citigroup:
Glencore (GLEN.L) — Staying the Course
UNITED KINGDOM | MINING – DIVERSIFIED | BUY/MEDIUM RISK We are initiating coverage on Glencore with a Buy recommendation and £5.70 target price. Our Buy recommendation is based on Glencore’s unique market positioning and long term growth opportunities. We forecast the company to generate earnings of $5.9bn in 2011e and $7.4bn in 2012e, we base our 12- month target price on a 9x 2012E.
And from UBS:
Glencore (GLEN.L)
Growth dynamic
Management-driven entrepreneurial approach
This report initiates coverage of Glencore with a Buy rating and 630p price target. Glencore is the world’s largest integrated producer and marketer of commodities by traded volume. The company seeks to maximise ROE in all activities and employs an entrepreneurial approach to managing its assets, listed equity stakes and marketing division. In our view, this sets Glencore a.part from other London listed miners.
And Morgan Stanley...MORE

"Reconsidering the Role of Food Prices in Inflation"

A working paper from the International Monetary Fund, April 2011:

Food prices are generally excluded from measures of inflation most closely watched by policymakers due either to their transitory nature or their higher volatility. However, in lower income countries, food price inflation is not only more volatile but also on average higher than nonfood inflation. Food inflation is also in many cases more persistent than nonfood inflation, and shocks in many countries are propagated strongly into nonfood inflation. Under these conditions, and particularly given high global commodity price inflation in recent years, a policy focus on measures of core inflation that exclude food prices can misspecify inflation, leading to higher inflationary expectations, a downward bias to forecasts of future inflation and lags in policy responses. In constructing measures of core inflation, policymakers should therefore not assume that excluding food price inflation will provide a clearer picture of underlying inflation trends than headline inflation.

22 page PDF

I'm in the Wrong Business, Part 984: "£7bn windfall for UK utilities from carbon price floor"

Following up on "I'm in the Wrong Business Part 983: European Carbon 'Fat Cats' Have Stashed Over $10 Billion Worth of Carbon Credits" where we watched the steel and cement companies score big with cap-and-trade, we see how the utilities (and the homemakers) are faring.
From Environmental Finance:
The UK’s carbon price ‘top up’ will encourage utilities to raise electricity prices, increasing their profits by £7 billion ($11 billion), according to a report by investment bank Credit Suisse.

From April 2013, electricity generators will have to pay a top-up carbon tax on fossil fuels – initially set at  £4.94 a tonne. It has been introduced by the UK government in case the EU carbon price does not increase enough to make the case for investing in lower carbon generation, such as renewables.

Higher prices will bring in an extra £24 billion in revenue between 2013 and 2020, the report concludes, but only about £17 billion will end up in the public purse.

“Whilst the EU  ETS [Emissions Trading System] is successfully delivering emissions reductions across the UK and Europe, so far the carbon price has not been sufficient to incentivise the required levels of new low-carbon investment,” the Department of Energy and Climate Change said last week in its latest energy policy proposal.

Credit Suisse calculates that all UK utilities stand to benefit from the measure, except for Drax Group, which operates one large coal-fired power plant....MORE
Meanwhile, the Independent, no greenies-come-lately they, report:
 UK's carbon floor price 'could waste £1bn a year'
While the Telegraph headline is:
Centrica chairman warns steep energy price increases are inevitable
and the always subdued Register says:
'Leccy price hike: Greens to blame as well as energy biz

Monsanto Beats, Raises, Stock Rumbles Higher (MON; MOO)

Early pre-market the stock is up 3.1% at $69.03, here's the chart:

Wrong chart.
That's from New Low Observer who comments:
Below is an excerpt from a 1937 issue of Barron’s showing the price history of Monsanto (MON) from 1929 to 1937. The high price set in 1929 at $40 was marked down over 75% in 1932. Subsequent price movement brought the stock of Monsanto back to the 1929 high by the end of year 1933. By late 1935, Monsanto (MON) was just short of $100 a share....
Current holders can dream, the stock is still off from the June 18, 2008 high of $145.8.
Here's the news, from the AP via KTAR (Phoenix):

Monsanto posts $680 million profit in 3rd quarter 
Monsanto Co. says higher sales of genetically engineered seeds helped it nearly double its third-quarter profit.
The St. Louis company reported Wednesday its net income rose to $680 million, or $1.26 per share, for the quarter ended May 31, compared with $384 million, or 70 cents a share, a year ago.
It says revenue increased 21 percent to $3.59 billion.

Analysts surveyed by FactSet had expected net income of $1.10 per share on revenue of $3.4 billion....
From Reuters:

Monsanto Company Raises FY 2011 EPS Guidance
Monsanto Company raised fiscal 2011 as-reported and ongoing EPS guidance. The company expects fiscal 2011 ongoing EPS in the range of $2.84 to $2.88 and fiscal 2011 EPS guidance on an as-reported basis is expected in the range of $2.82 to $2.86. According to I/B/E/S Estimates, analysts on an average are expecting the Company to report EPS of $2.82 for fiscal 2011. 

Another View of Google's Clean Energy Push (GOOG)

Following up on yesterday's "Google: "Examining the impact of clean energy innovation" (GOOG)".
From our last link to some of Marc Gunther's writing, June 1 "General Electric’s Big bet on Natural Gas (GE)":
In a 2009 post, "GE, Cleantech and Your Tax Dollars" I said:
Marc Gunther is pretty green and has been for as long as I can remember. He's also a good analytical thinker.
Although he doesn't mention it, I find it astounding that GE's CEO Jeff Immelt is an advisor to President Obama at the same time his company has $51 Billion of a subsidiary's debt guaranteed by the FDIC.
Meet the new boss, same as the old boss....
At the time, and for a couple years prior, many writers in the alt/green/clean space became cheerleaders for the companies, regardless of the underlying economics. Mr Gunther avoided that trap and remains someone I'll link to. Add to that the fact that Marc was dubious of GE's pronouncements and strategy under Jeff Immelt and I thought "Hey, this guy is seeing the stuff without the rose colored glasses". Cool...
From Marc Gunther's blog:

Google: Energy innovation will pay off but..

The folks at Google, not surprisingly, have enormous faith in the power of technology. So a group of them set out to see what technology breakthroughs in clean energy will mean to the economy, the environment and the typical American household.
They found good and bad news.
The good: Energy innovation could pay off big, benefiting GDP, jobs, energy security and reducing carbon emissions. It’ll even save homeowners money, over time.
Specifically, as Bill Weihl and Charles Baron write on the Google blog, here are the benefits of energy breakthroughs, when compared with a business as usual scenario. In their parentheses is even better news; those numbers reflect what clean energy technology can do when combined with stronger U.S. policy to promote clean energy and discourage the burning of fossil fuels:
  • Grow GDP by over $155 billion/year ($244 billion in our Clean Policy scenario)
  • Create over 1.1 million new full-time jobs/year (1.9 million with Clean Policy)
  • Reduce household energy costs by over $942/year ($995 with Clean Policy)
  • Reduce U.S. oil consumption by over 1.1 billion barrels/year
  • Reduce U.S. total carbon emissions by 13% in 2030 (21% with Clean Policy)
The not-so-good news is the last bullet: Reducing U.S. carbon emission by 13% by 2030, or even 21% under the more favorable clean policy scenario, won’t do much to reduce the threat of catastrophic climate change. The report also found that by  2050, innovation in the modeled technologies alone reduced CO2 emissions by 55% and by 63% when combined with policy. Those are under best-case assumptions....MUCH MORE
Also at Marc's blog:
Marks & Spencer: Sustainability, profits and a carbon-neutral bra
Do we need energy subsidies?

Tuesday, June 28, 2011

York Water Company to Pay Dividend to Shareholders of Record A/O June 30 (YORW)

It's their 562nd

Here's the press release

Barron's Cover: China's Military Buildup

It is China's pursuit of "Carrier killers" that has the U.S. Navy thinking very, very hard. India is planning for the Indian Ocean to become a battleground. Russia seems ready to sell Siberia. Other than that...
From Barron's:

Dragon Fire 
The U.S. military is getting ready to leave Iraq and Afghanistan. The next threat is much bigger.
Even the most casual observer seems to know that China's economy has been growing at a roughly 10% annual rate for much of the past decade. Less recognized and arguably more important to the state of the world is the fact that China's defense spending rose even faster than that -- 12% or more a year between 2000 and 2009.

"The accelerating pace of China's defense budget increases is driving countries in the region, as well as the U.S., to react to preserve a balance of power and stability," says Jacqueline Newmyer, head of Long-Term Strategy Group, a Cambridge, Mass.-based defense consultant. "There is a real potential for arms races to emerge," she adds. "While once we assumed we'd have access to areas to conduct anti-terrorism or anti-insurgency operations, now we're compelled to think about preserving our ability to gain access to East Asia."

Stephen Rosen, Harvard's Beton Michael Kaneb professor of national security and military affairs, agrees. "All of us are clearly moving in that direction: We, the Japanese, the Indians. The only thing stalling it now are fiscal problems in Japan and the United States," says the former advisor to one-time presidential hopeful Rudy Giuliani.

Highlighting one of the fastest military buildups in history was China's debut of its stealth jet just hours before the January visit to Beijing by outgoing U.S. Defense Secretary Robert Gates. The fighter will rival the U.S.'s F-22 Raptor, the world's only operational stealth fighter. Larger than the F-22, with bigger fuel tanks, it will fly higher, faster and with less chance of detection. It's one of many Chinese weapons that will impede the U.S. military's ability to roam freely in the region.

The investment implications for China's military modernization are only starting to take shape. But some U.S. companies like Lockheed Martin (ticker: LMT) and United Technologies (UTX), facing big budget cuts as President Obama withdraws the U.S. from wars in Afghanistan and Iraq, should get some offset from a new spending cycle worldwide. Like it or not, U.S. investors also are likely to hear more about Chinese companies such as Xi'an Aero-Engine (600893.China) and China Shipbuilding Industrial (601989.China) that are helping arm the country.

There's likely to be a steady stream of new IPOs for Chinese defense companies that some Western investors may choose to avoid. The effects go beyond equities. The sounds of new sabers rattling will stir both the bond and currency markets....MORE
From last November's "India Orders Firms to "Scour the Earth" for Energy Supplies as President Obama Heads Over":
The President will be in India later this week.
(Can This Be Right? "US to spend $200 mn a day on Obama's Mumbai visit")

The Chinese approach works best if you have a blue water navy.

The Indian's currently have one aircraft carrier, the Viraat. Back in 2001 the Chinese bought a Soviet carrier from Ukraine for $20 mil. and said they were going to turn it into a, aahhh, casino, yeah that's the ticket. They've since started work on two more.

I have a hunch that American schoolkids today will be hearing a lot about the Indian Ocean before they graduate and might even be able to find it on a map.* ...

*I mean come on, just look at the land masses that border it:

Map of Indian Ocean

Google: "Examining the impact of clean energy innovation" (GOOG)

Google is one of the largest energy users* in the world, so large that they are embarrassed to say how much electricity they consume.

The Goog will not build a data center in California because of the cost of electricity.
The company has made something on the order of $3/4 billion in clean/green/alt energy investments, some of it in decidedly staid technology. Here they appear to be forecasting breakthroughs.

Google is also one of the largest lobbyists on Capitol Hill.**
From Google's blog:
At Google, we’re committed to using technology to solve one of the greatest challenges we face as a country: building a clean energy future. That’s why we’ve worked hard to be carbon neutral as a company, launched our renewable energy cheaper than coal initiative and have invested in several clean energy companies and projects around the world.

But what if we knew the value of innovation in clean energy technologies? How much could new technologies contribute to our economic growth, enhance our energy security or reduce greenhouse gas (GHG) emissions? Robust data can help us understand these important questions, and the role innovation in clean energy could play in addressing our future economic, security and climate challenges.

Through, our energy team set out to answer some of these questions. Using McKinsey’s Low Carbon Economics Tool (LCET), we assessed the long-term economic impacts for the U.S. assuming breakthroughs were made in several different clean energy technologies, like wind, geothermal and electric vehicles. McKinsey’s LCET is a neutral, analytic set of interlinked models that estimates the potential economic and technology implications of various policy and technology assumptions.

The analysis is based on a model and includes assumptions and conclusions that developed, so it isn’t a prediction of the future. We’ve decided to make the analysis and associated data available everywhere because we believe it could provide a new perspective on the economic value of public and private investment in energy innovation. Here are just some of the most compelling findings:

  • Energy innovation pays off big: We compared “business as usual” (BAU) to scenarios with breakthroughs in clean energy technologies. On top of those, we layered a series of possible clean energy policies (more details in the report). We found that by 2030, when compared to BAU, breakthroughs could help the U.S.:
    • Grow GDP by over $155 billion/year ($244 billion in our Clean Policy scenario)
    • Create over 1.1 million new full-time jobs/year (1.9 million with Clean Policy)
    • Reduce household energy costs by over $942/year ($995 with Clean Policy)
    • Reduce U.S. oil consumption by over 1.1 billion barrels/year
    • Reduce U.S. total carbon emissions by 13% in 2030 (21% with Clean Policy)
  • Speed matters and delay is costly: Our model found a mere five year delay (2010-2015) in accelerating technology innovation led to $2.3-3.2 trillion in unrealized GDP, an aggregate 1.2-1.4 million net unrealized jobs and 8-28 more gigatons of potential GHG emissions by 2050.
  • Policy and innovation can enhance each other: Combining clean energy policies with technological breakthroughs increased the economic, security and pollution benefits for either innovation or policy alone. Take GHG emissions: the model showed that combining policy and innovation led to 59% GHG reductions by 2050 (vs. 2005 levels), while maintaining economic growth.
This analysis assumed that breakthroughs in clean energy happened and that policies were put in place, and then tried to understand the impact. The data here allows us to imagine a world in which the U.S. captures the potential benefits of some clean energy technologies: economic growth, job generation and a reduction in harmful emissions. We haven’t developed the roadmap, and getting there will take the right mix of policies, sustained investment in technological innovation by public and private institutions and mobilization of the private sector’s entrepreneurial energies. We hope this analysis encourages further discussion and debate on these important issues.
Here's the soundbite version.
Here's the report (28 page PDF)

Google Taking a Step Into Power Metering (GOOG)
INDUSTRY: "Why Google and Cisco Will Soon Manage All Your Energy Use" (CSCO; GOOG)
Google Energy Guru Pushes Congress to Insulate America
"Exclusive: Google develops prototype mirror for solar energy" (GOOG) 
Financial aspect to Google's environmental goals grows (GOOG)
Google to Move Into Clean Energy Project Investing (GOOG)
More on "Google's Power Play" (GOOG)
"10 Questions for Google on Its Wind Projects" (GOOG)
A follow-up to yesterday's "Wind: "Google Makes First Direct Investment Into Clean Power Project" (GOOG)" upon which my first thought was

"Interesting, no? Nothing fancy. Old-fashioned technology+subsidies."
"Google Buys Wind Power, First Deal for “Google Energy”" (GOOG; ENE)
BrightSource Energy Finalizes $1.6 billion in loans guaranteed by the US Department of Energy; Google Buys $168 Millinon Equity Stake (GOOG) 
Transmission: Google Announces Plan for $5 Billion Backbone for Offshore Wind Farms (GOOG)
"Google Plans to Announce Smart LED Deal With Lighting Science Group" (GOOG)
Time to Go Long Gallium: Google Ventures Leads $20M Round In Transphorm (GOOG)
Interview: "Google’s Renewable Energy Push" (GOOG)
"...Google’s Trading Desk" (GOOG)
"Google Goes $280M Long On Solar Rooftops With SolarCity" (GOOG)

Google Ventures' next big bet: Weather insurance (GOOG)

*The Cold, Green Facts
See no Evil, Hear no Evil and Evil
Adios California: Adobe, EA Games and Ebay will do Their Expanding in Utah (ADBE; EBAY; ERTS)

**See also:
Google Spent $5.2 Million On Lobbying In 2010; Up 29 Percent From 2009
and from Greenwire, Mar. 9, 2011
Google Recruits Lobbying Muscle to Promote Green-Power Ventures
Google Inc. has launched a lobbying campaign seeking government help spurring a green-technology transformation.

"The way we use energy -- whether it's powering our cars or our homes and businesses -- hasn't changed in decades," Michael Terrell, Google's energy policy counsel, wrote yesterday on the company's blog. "Our economy needs a cleaner, more efficient way of delivering energy while giving people better tools and information to manage their energy use."

The Mountain View, Calif.-based company recruited Crowell Strategies LLC. The consulting firm's lobbyist, Colin Crowell, previously worked as a senior counsel at the Federal Communications Commission and before that as an aide to Rep. Ed Markey (D-Mass.).

It is the latest venture by Google in the political energy arena. The company already has hired lobbying firms to work on energy efficiency and renewable issues and research & development of smart-grid transmission.
"Electricity is a core issue for them," said Adele Morris, policy director for climate and energy economics at the Brookings Institution. In addition to using large amounts of power, she said, Google is "taking a growing position in electricity markets."
Google last year created the subsidiary Google Energy, which received Federal Energy Regulatory Commission approval to sell electricity on wholesale markets (E&ENews PM, Feb. 18, 2010)....MORE

"Goldman Closes Nat Gas Short, Sees Higher Prices Ahead" (UNG)

The futures are up 2.15% at $4.348.
From ZeroHedge:
Two weeks ago we reported on Goldman's natgas trading recommendation change, after analyst Samantha Dart said to short at $4.84. Well, in what may be the first time in 2011 in which a Goldman trading reco has lead to client profits (and Goldman prop losses), the firm apparently has just reached its breaking point on how much losses it can take, and just announced it is closing the short. "Closing: Short October 2011 NYMEX Natural Gas (initial price $4.84/mmBtu, closing price $4.33/mmBtu, gain $0.51/mmBtu) We close our short trading recommendation in the October 2011 NYMEX contract, as prices have corrected in line with our expectations. We also see increased price support from higher coal prices going forward, which allows for coal-to-gas substitution at a higher price level." Confirming Goldman's now suddenly "bullish" bias is the firm's reco to go long Q4 2012 ICE natgas...MORE
The squid's public hydrocarbon calls have been almost uncanny this year.

Bellwether Siemens Sees Signs of Slowing Growth (SI)

In New York trading the stock is down 1% at $130.62. We are fans but take a look at the chart, below.
From the Wall Street Journal:
German industrial conglomerate Siemens AG, a barometer of the world's manufacturing industry, said Tuesday that although it expects sales and orders to rise in the fiscal third quarter, there are signs of slowing growth.

"The tailwind from the economic recovery is likely over. Now, increased efforts are required for continued growth," Siemens Chief Financial Officer Joe Kaeser told analysts at an event in Shanghai.

Siemens has already said several times in recent months that growth will slow in the second half of the 2011 fiscal year, which ends in September, as the comparison base gets tougher, even though Chief Executive Peter Loescher had stated in January that the global economy was recovering faster than anticipated.
Siemens, which competes with General Electric Co. and Royal Philips Electronics NV, makes a wide range of products from trains to wind turbines and hearing aids and has been benefiting from the economic rebound in recent quarters.

Investors turned negative on Siemens Tuesday, sending its shares down 3.5% at €89.54 during European afternoon trade....MORE
Reuters' colors it a bit rosier but this is a serious economic 'tell':
Siemens cautions on slower growth after buoyant Q3
* Siemens says Q3 new orders up significantly year on year
* Q3 revenue seen flat on previous quarter, up year on year
* Firm must increase efforts to spur growth -finance director
* Shares down 4.1 pct vs 0.1 pct decline on Europe index
(Adds comment, background)
By Marilyn Gerlach
FRANKFURT, June 28 (Reuters) - Europe's biggest engineering conglomerate Siemens (SIEGn.DE), a bellwether for the German economy, saw its shares fall on Tuesday after it warned of growth easing amid a slowdown in economic recovery.

Munich-based Siemens, which makes everything from hearing aids and light bulbs to fast trains and power plants, said growth was driven by its energy and industry sectors.

"Our growth expectations have come along in the third quarter," Finance Director Joe Kaeser said at an investor event in Shanghai, China.

Siemens said there were the "first signs of easing growth" in the second half of its fiscal year to September due to tougher comparisons with last year, when demand rose steeply as factories emerged from the financial crisis.

"The tailwind from the economic recovery is likely over. Now, increased efforts are required for continued growth," Kaeser added.

By 11.15 GMT, the shares had declined 4.1 percent while the broader European STOXX index of industrial goods was down 0.1 percent.

Analysts said the shares have fallen apparently because of comments indicating the pace of growth for its fiscal year would no longer be as fast as last year.

"Things will not move up quickly and will stabilise at these levels," according to one analyst who declined to be identified....MORE

The gaps at both the 120 and 110 areas could be a target in an overall market downturn, there will be another chance to own this class act:


"Five economic lessons from Sweden, the rock star of the recovery" plus Obama and the Swedish Model

From the Washington Post:
Almost every developed nation in the world was walloped by the financial crisis, their economies paralyzed, their prospects for the future muddied.
And then there’s Sweden, the rock star of the recovery.

This Scandinavian nation of 9 million people has accomplished what the United States, Britain and Japan can only dream of: Growing rapidly, creating jobs and gaining a competitive edge. The banks are lending, the housing market booming. The budget is balanced.

Sweden was far from immune to the global downturn of 2008-09. But unlike other countries, it is bouncing back. Its 5.5 percent growth rate last year trounces the 2.8 percent expansion in the United States and was stronger than any other developed nation in Europe. And compared with the United States, unemployment peaked lower (around 9 percent, compared with 10 percent) and has come down faster (it now stands near 7 percent, compared with 9 percent in the U.S.).

Some of the reasons for the Swedish success are as unique to the nation as its citizens’ predilection for Abba, pickled herring and minimalist furniture. But there are plenty of lessons for other countries as they struggle to find a pathway toward prosperity....MORE
I saw a couple links yesterday but let's give the tip d'chapeau to Alphaville

Oddly enough one of our top ten posts this month is from 2009, "Obama: Swedish Model Would Be Impossible Here".

Who'd have thought that so many people were interested in the Sveriges Riksbank response to the 1992 bank crisis?:
From ClusterStock:
Eventually the government might be forced to nationalize a large swath of the banking sector, but they'll be dragged kicking and screaming. Yesterday's non-bailout announcement aimed to preserve the status quo, and Obama himself dismissed the idea that the US could adopt the Swedish model in an interview with ABC...

The Swedish Model