GE says funding arm receives Wells notice from SEC

From Reuters:

A funding arm of General Electric Co (GE.N: Quote) this month received notification that the U.S. Securities and Exchange Commission is considering a civil action against it, the second-largest U.S. company by market capitalization said in an SEC filing on Friday....MORE

GE reorganizes to squeeze out inefficiencies

A few different views on where the big dog is going.
From MarketWatch:

General Electric Co. said Friday it will reorganize its operations by folding its six business segments into four, in a bid to improve future growth and prop up a slumping share price....

...The Fairfield, Conn.-based conglomerate said its new units now comprise technology infrastructure, energy infrastructure, capital and NBC Universal. The move continues a trend over the years of consolidating the sprawling company's multiple divisions....

...GE also named newly appointed vice chairman John Krenicki to head its newly configured energy unit. Krenicki, 46, was previously chief executive of the old GE Energy....

Two from 24/7 Wall Street:

GE (GE) Restructuring May Take A Number Of Quarters To Bear Fruit

...The shuffling of divisions and management should really not interest investors. GE's shares are now inexpensive by almost any measure. With the exception of an unforeseeable major problem, GE is predicting relative robust growth despite a slowing economy.With a gold-plated balance sheet and tremendous cash flow, GE is not a $28 stock. Not in a period when most other stocks are becoming more risky as the months pass.

Over the next year, GE may not get back to its 52-week high of $42.15, but its results and financial strength in a deteriorating economy make it one of the most attractive big cap stocks in the market....

And:

Cramer Gets Behind General Electric (GE)

On tonight's MAD MONEY on CNBC, Jim Cramer came out talking up the aspects of General Electric Co. (NYSE: GE)

Cramer discussed how it is winning in financial services while others are failing, noted how it hasn't rallied with other financial stocks, discussed the consolidation of its enterprise, and more. He also noted how it is winning in energy and alternative energy and noted how the new $8 Billion pact with Mubadala in Abu Dhabi is going to bring in a shareholder who has committed to buy millions of shares of stock in the open market to become one of GE's largest shareholders....MORE

Focus on Feed-in Tariffs (FiT) at the state level for solar.

Warning: Wonks ahead! (but worth the read for pros and those who watch the money)
From GUNTHER Portfolio:

...Adam Browning kicked off the discussion with his presentation, "US Solar Market - Policy Drivers". In his opening, Mr. Browning said:

When it comes to Energy policy much of it is lead at the state level rather than at the Federal level. Most of the most critical electricity related rules and regulations are set at a state level.

This observation was echoed by many panelists who advocated activity at the state level over complex and protracted energy policy legislation at the Federal level.

However, a misleading comparison of Rebate programs with net metering versus the Feed-in Tariff model is shown in the slide above titled “Avoided Utility Purchases with Marginal Incentives vs. Feed-in Tariffs”.

Adam Browning said:

…From a policy maker’s perspective we are looking at what is the amount of public funds, the above market cost, that they are going to need to have to provide to a program in order to make that program work, give a financially interesting proposition to people who want to go solar.

Under this particular model, most of the value comes from avoided utility purchases and you give an incentive that is just the marginal difference to get to an economically interesting proposition.

Under a Feed-in Tariff, you must provide the full value of that electricity and from the policy maker’s perspective that often looks like a much larger amount which makes it harder to do.

This perpetuates Adam Browning’s flawed Feed-in Tariff versus Marginal Incentive article refuted by Michael Hoexter in Feed-in Tariffs: Getting off the Renewables Roller Coaster, both found at RenewableEnergyWorld.com....MORE

This Bear Market May Have More Bite

From the New York Sun:

Yesterday's wicked 283-point drop in the Dow Jones Industrial Average lends renewed credence to the increasingly worrisome view that the bear market may have a lot more teeth. Supporting this argument is an intriguing study by the chief investment strategist of Standard & Poor's, Sam Stovall, which looks at more than half a century of data to conclude it's far too soon for the bear to hibernate.

Last week's three-day, 528-point jump in the Dow may have been little more than a short-lived bounce, as the report opens the possibility of an additional 12% drop in the Dow before year-end.

The thrust of Mr. Stovall's study is to provide investors with an insight into how stock prices fare following a bear market decline, and to offer some perspective on the length and depth of a bear market.

A market is in bear territory when stocks decline 20% between peak and trough. The latest bear market, as reflected in the S&P 500, kicked off October 9, and in theory became official almost nine months later, July 9, when the index crossed the 20% threshold.

Whether the bear has had enough after that 20% drop is anyone's guess, but judging from the study, the answer is no. History shows that the S&P 500 doesn't cross the 20% threshold until two-thirds of the way through the overall decline. In other words, there's another third to go before anyone can legitimately claim the bear is dead....Go here for the conclusions.

Never Have So Many Short Sellers Made So Much Money

From Bloomberg:

Investors worldwide are betting more than $1 trillion on a collapse in stock prices.

Managers from William Ackman to Jim Rogers made a total of at least $1.4 billion in July with wagers against U.S. mortgage financiers Fannie Mae and Freddie Mac, data compiled by Bloomberg as of last week show. Harbinger Capital Partners staked $665 million that U.K. mortgage lender HBOS Plc would drop and Sao Paulo-based hedge-fund manager Francisco Meirelles de Andrade's short selling of Cia. Vale do Rio Doce is also paying off.

More than $1.4 trillion of equities worldwide are now on loan, about a third higher than at the start of 2007, data compiled by Spitalfields Advisors, the London-based firm specializing in securities lending, show. Almost all of that is being used to speculate that shares will fall, according to James Angel, a finance professor at Georgetown University who studies short selling. The global economic slowdown, $453 billion in bank losses and an explosion of funds that can profit from stock declines spurred the increase in short selling, helping send 22 of 23 countries in the MSCI World Index into bear markets.

``It's a huge amount of money,'' said Peter Hahn, a London- based research fellow for Cass Business School and a former managing director at Citigroup Inc. ``Shorts have come a long way. They are getting into the mainstream, and long holders need to understand the shorts are not evil.''

$11 Trillion

While U.S. and U.K. regulators tighten rules on short sellers amid concern they're accelerating more than $11 trillion in global stock losses this year...MORE

Where Are The Arctic's Big Oil and Gas Deposits?

From Arctic Economics:

The U.S. Geological Survey estimates that 13% of the world's undiscovered technically recoverable oil, 30% of its undiscovered technically recoverable gas, and 20% of its undiscovered technically recoverable natural gas liquids, are in the Arctic. Most of that gas is in Russia: Circum-Arctic Resource Appraisal (U.S.Geological Survey data released July 23, 2008):

Here's a map showing the location of the estimated undiscovered oil; the title is a little misleading. Click on it to see a larger version. The darker the green the more oil there is. Alaska looks pretty good, and actually accounts for about a third of this undiscovered Arctic oil:

The two provinces in the central Arctic Ocean, the Eurasian Basin, with 1.3 billion barrels, and the Lomonosov-Makarov Basin, with 1.1 billion, are small parts of the picture. This suggests to me that, to the extent the "race for Arctic oil" rhetoric is about the control of the central Arctic Ocean, it may be overblown....MORE

Iran says oil could reach $500 on dollar, politics

Am I bid $1000?
From Reuters:

Iran's OPEC governor said world oil prices could reach as high as $500 per barrel in a few years' time if the dollar falls further and political tension worsens, an Iranian weekly said.

"If the dollar's value continues to decrease and if the political crisis becomes worse, the oil price would reach up to $500," Mohammad Ali Khatibi told Shahrvand-e Emrooz in an interview published on Saturday....MORE

Solar: Largest PV Plant in Greece Grid Connected

Thank goodness. I have been reassured that my cut and paste Greek in "Solar: Arrivaderci Roma, γεία σου* Thessaloniki!" was not a curse on a Greek grandmother, or something.
From Renewable Energy World:

This week the largest solar photovoltaic (PV) plant in Greece, which was built by Phoenix Solar AG, was connected to the grid in Pontoiraklia, near Thessaloniki. Phoenix Solar was responsible for planning and construction of the plant as general contractor. Sunergy A.E. is the owner of the 944-kilowatt capacity power plant.

The project is part of a major push by solar companies into the Greek market, which is the result a recently launched renewable energy incentive program in the country. In 2006, the country’s Parliament passed comprehensive Renewable Energy Sources legislation which provides grants, favorable tax treatment, and a €0.40-0.50 [US $0.62-0.78] feed-in tariff as incentives for setting up business or installing solar-PV systems....MORE

Russian stock markets plunge

From the AP:

Mechel criticism rattles investors, heavy trading sends Russian stock markets down

Investors piled out of Russian stocks Friday after the abrupt departure from the country of a foreign oil boss and the prime minister's unexpected severe criticism of a large steel firm.
MICEX, the exchange where the bulk of trading in Russian stocks takes place, plunged 5.5 percent by the close of markets, while the RTS Index lost 5.6 percent to sink to its lowest point since March.

After Prime Minister Vladimir Putin's scathing attack on Mechel late Thursday, heavy trading in New York sent the steel and coal maker's stock down nearly 40 percent, wiping more than $5 billion off its value -- though shares rose around 20 percent in early trading in New York on Friday....MORE

In other Russia news (from FT Alphaville):

Investment group alleges $230m Russia fraud

Suspected fraudsters have allegedly stolen $230m from the Russian tax authorities in a complex scheme involving forgery, impersonation and the theft of three investment companies, according to Hermitage Capital Management, formerly the country’s largest foreign portfolio investment manager. The perpetrators allegedly fraudulently re-registered the ownership of the companies before using them to make false tax rebate claims, according to the fund manager.

FT Editor's Choice Russia headline:

TNK-BP chief is ‘forced out’ of Russia - Jul-24

Airline Stocks Are Turbulent; Bondholders Stay on the Tarmac

I should state this plainly, although I've made money in them, I don't like airline or restaurant investments. In April '07 we had this:

"Investment legend Warren Buffet notes, “As of 1992, the money that had been made since the dawn of aviation by all of this country’s airline companies was zero. Absolutely zero.”

Lamenting his unprofitable purchase of stock in US Air, the normally sagacious Buffet quipped on the December 17, 2003 centennial anniversary of the Wright brothers’ historic flight, 'If I’d been at Kitty Hawk in 1903 when Orville Wright took off, I would have shot him down. Karl Marx couldn’t have done as much damage to capitalists as Orville did.'” There are numerous versions of this quote, this version sounds like Mr. Buffet but it may be apocryphal.

From MarketBeat:

The credit market often plays the role of the prudent first-in-line to the equity market’s prodigal son, and that’s now playing out in the airline sector.

Investors have gorged on U.S. carriers’ stocks ever since oil prices turned around last week — until a predictably spastic 11% decline in the American Stock Exchange Airline Index Thursday. (Naturally, the index is up more than 5% in early trading Friday.) However, credit investors have hardly touched the paper, convinced the industry is staring at a crash landing.

“The equity markets absolutely are on drugs,” said Roger King, airline analyst at CreditSights....MORE

Oil-"SemGroup: It Gets So Much Worse"

UPDATES here.
From DealBreaker:

Posted by Bess Levin, Jul 25, 2008, 10:37am

You might've thought you didn't give a rat's ass about the collapse of energy trader SemGroup but that changes now. According to Reuters, three "massage clinics," eight funeral homes, two Hooters establishments and a pawnshop that "specializes in gold jewelry" are among the companies owed tens of millions of dollars by the (voluntarily) bankrupt company.

Pawnbroker among creditors in oil trader collapse [Reuters]

Bringing to mind the Retirement Planning division of said restaurant:

"Bill Gate's and the Retirement Planning Team"

I'm not sure who the guy in the red sweater is, probably an actuary
or something.



By the way, here's the real retirement video. I know, I thought the CES vid was real.
HT (on the real retirement video): Gizmodo

Traders Slamming GT Solar IPO (SOLR)

From 24/7 Wall Street:

IPO traders and investors are probably wishing they never heard of GT Solar International Inc. (NASDAQ: SOLR). The company fell roughly 12% yesterday but that is just the start of it. Right after the open today we are seeing an unbelievable drop of more than 30%. We questioned the timing of this one yesterday, but apparently not enough.
It seems that the entire share sale being by the parent company isn't a recipe that traders and investors are going to endorse even if it is supposed to be a hot solar power provider. The underwriters were listed as Credit Suisse, UBS, Banc of America, Deutsche Bank, Piper Jaffray, and Thomas Weisel Partners. Their legal departments are probably getting ready for some calls today. At 9:37 AM EST we have seen some 3.3 million shares trade and the last print was down 34% at $9.54....

A cumulative 42% loss. That, kids, is a busted IPO.

Ford Says Electric Cars “Commercially Feasible” By 1977

From io9:

Move over, EV Smart Car, here comes your granny—the Ford Comuta! Two test models of the tiny (80 inch long) electric car were built by Ford in 1967 and demonstrated in the U.S. and Britain. Powered by batteries located in the wheel hubs, the Comuta’s top speed was a mere 25 mph.

Six months prior to its introduction to the press in 1967, Ford president Arjay Miller said that electric cars like the Comuta “could be available in five to 10 years.” According to the New York Times in 1967...MORE including a great retro video.

HT: Memebox's Future Scanner.

Meanwhile, back in Dearborn:

Ford mass plug-ins at least 5 years away

Ford Motor Co (F.N: Quote) is at least five years away from manufacturing big numbers of plug-in electric vehicles for the mass market, an executive said on Tuesday.

"We're clearly at least five years away from starting what I would call the ramp from very small volumes to substantial volumes," Nancy Gioia, Ford's director of sustainable mobility technologies and hybrid vehicle programs, said in an interview....MORE from Reuters.

WIND: Pune Billionaire Chases GE With Wind Turning on Cracked Blades

This may be the most in-depth piece on Suzlon available.
From Bloomberg:

The lights snap off in the five-story, gray-concrete building in Pune, India, where Suzlon Energy Ltd. -- the fastest growing of the world's top five wind turbine makers -- has its headquarters. After 30 seconds of darkness, the fluorescent bulbs flicker on as backup generators kick in.

``For us, it's routine,'' says Tulsi Tanti, Suzlon's billionaire founder. ``You have to understand the country's limitation and, within that, develop your business.''

Tanti, 50, made his fortune in a decade by supplying wind power to Indian companies struggling with blackouts and soaring energy costs. The entrepreneur got his start in 1993, when he bought two turbines to reduce the electricity bills at his textile company in the western state of Gujarat.

Tanti's employees dug the foundations, installed the towers and connected the turbines to India's overburdened power grid -- taking advantage of government incentives that let the firm swap the wind power it generated for the electricity it used.

``Within two years, we understood the economics and dynamics of the industry and realized wind is a good source,'' Tanti says. ``Why not focus on that industry?''

Suzlon Energy started in 1995 and now ranks as the No. 5 turbine maker worldwide....MUCH MORE

First Solar: "Encourage profit taking/shorting here" - Friedman Billings (FSLR)

From Notable Calls:

FBR is out with a negative call on First Solar (NASDAQ:FSLR) and SunPower (NASDAQ:SPWR) after Solar Electric Power Association (SEPA), an industry association bridging the solar and utility industries, announced yesterday theresults of its survey of utility companies (titled:"Utility Solar Electricity Market Survey"). Summary: (a) projected PV installations of ~2 GW, on aggregate, over the next three to five years in solar portfolio, versus >3 GW for CSPs across the U.S. utilities; (b) possible paradigm shift, with utilities owning the plants and PV suppliers becoming only turn-key provider (if ITC is given to utilities instead of third parties)...MORE

Notable Calls says we could see up to a five percent decline today.

Has Oil Broken Down?

From MarketBeat:

These commodity market blowups are becoming all-too-familiar in the last few years. Many theories exist as to why the price of crude oil zoomed from about $120 a barrel in mid-May to threaten the $150 mark in mid-July, only to sharply reverse that trend in the last week.

But one emerging story revolves around SemGroup, an oil marketing firm that filed for bankruptcy, disclosing heavy losses on short positions in crude oil that they were forced to reverse as the market’s gains went from steady to accelerated to explosive.

It wouldn’t be the first time that a long, ongoing bull-market rally in a commodity turned into a buying frenzy, fueled at first by speculators caught up in the mere expectation of higher prices, later by the same smelling someone on the wrong side of the trade trying to get out of their positions, such as what seems to have happened with SemGroup....MORE

From naked capitalism:

James Bianco on Possible Role of SemGroup Bankruptcy in Oil Price Drop

James Bianco, a respected fixed income analyst at Arbor Research, was so kind as to pass along his observations about the retreat in oil prices from his morning research note. "Is This Why Crude Oil Is Getting Slammed?":...

FDIC Chairman Shelia Bair Is Out Of Control

From Mish's Global Economic Trend Analysis:

In a sad twist of irony Shelia Bair is accusing blogs of being "out of control".

Sadder still is the fact that San Francisco Business Times writer Mark Calvey agrees. Please consider the incredibly inane article FDIC learns it ignores bloggers at its peril.
The federal agency insuring bank deposits learned that it can't afford to ignore the blogs following its seizure this month of IndyMac Bank, the largest bank failure since the 1980s.

"The blogs were a bit out of control," Sheila Bair, chairman of the Federal Deposit Insurance Corp., told the San Francisco Business Times after a speech in San Francisco this week....

Much more from Mish.

First Solar’s power-plant building boom (FSLR)

From Fortune:

Thin is in when it comes to solar power plants.

First Solar, the Walton family-backed (WMT) maker of thin-film photovoltaic modules, on Thursday announced its second solar power plant. The latest project is a 10-megawatt photovoltaic power station to be built for Sempra Generation (SRE) in Nevada. Two weeks ago, California regulators approved a 7.5-megawatt - expandable to 21 megawatts - First Solar (FSLR) power plant to be constructed in the Mojave to generate electricity for utility Southern California Edison (EIX). Thin-film solar technology layers solar cells on plates of glass or flexible materials, a process that lowers production costs with the trade-off being lower efficiency at converting sunlight into electricity....MORE

Frank Quattrone: Bring Back Conflict Ridden IPO* Analysts

From DealBreaker:

Frank Quattrone wants to repeal the regulations that built a wall between sell-side research analysts and investment bankers arranging initial public offerings. Speaking at a technology conference at Stanford University yesterday, Quattrone said the regulations were making US markets less competitive and creating a dearth of IPOs.

"It hurts the competitiveness of our country to deny companies access to research analysts," he said at the AlwaysOn conference. The remarks were some of his first public statements on markets since he formed his new firm in March. In 2003, he was accused of steering hot IPOs to clients to win investment-banking business. A later conviction on obstruction of justice charges was overturned by the courts....

DealBreaker's links:

Quattrone 'back in business' [Mercury News]

Dear Mr. Quattrone, You're Wrong. [Portfolio]

*Climateer's links:

GT Solar IPO prices at $16.50 per share in IPO (SOLR)

GT Solar shares fall as much as 15 pct in debut (SOLR)

AMAT: Solar Projects Slipping?

Eric Savitz has been on top of the action this week. The analyst he quotes is the fellow who was negative on MEMC two days ago and went positive after the "whiff".
From Barron's:

Applied Materials (AMAT) has seen recent slippage of project schedules in its solar business “nearly across the board,” according to Citigroup analyst Timothy Arcuri. Applied has built a new business around supplying tools used to manufacture thin-film solar cells, and expectations for the business are running high. Maybe too high, in Arcuri’s view....MORE