Energy Information Agency, 2010 Energy Conference: Conference Presentations

From the EIA:

Listen to keynote addresses given by Secretary Chu and Lawrence Summers (provided by SAIS)

Conference Presentations (All presentations are in PDF format)

Plenary Meeting the Energy and Climate Challenge — Steven Chu, Secretary of Energy Meeting the Challenges of the Next Decade — Steve Bolze, President & CEO, Power & Water, GE Energy Infrastructure Biofuels: Continuing Shifts in the Industry and Long-Term Outlook Biofuels: Continuing Shifts in the Industry and Long-Term Outlook — Michael Schaal, EIA National Renewable Fuel Standard Program — 2010 and Beyond — Paul Argyropoulos, U.S. Environmental Protection Agency Biofuels: Continuing Shifts in the Industry & Long-Term Outlook — R. Brooke Coleman, New Fuels Alliance EIA’s Long-Term Biofuels Outlook — Peter Gross, EIA Biomass Feedstocks and the Climate Implications of Bioenergy — Steven Hamburg, Environmental Defense Fund EIA's 2010 Annual Energy Outlook Highlights The U.S. Energy Outlook — John Conti, EIA The Outlook for Energy, A View to 2030 — Tom R. Eizember, Exxon Mobil Corporation U.S. Energy Outlook — Mary Novak, IHS Global Insight Short-Term Energy Prices — What Drivers Matter Most? Short-Term Energy Prices: What Drivers Matter Most? — David M. Arseneau, Federal Reserve Board Short-Term Energy Prices: What Drivers Matter Most? — Guy F. Caruso, Center for Strategic and International Studies Short-Term Energy Prices: What Drivers Matter Most? — Christopher Ellsworth, Federal Energy Regulatory Commission Short-Term Energy Prices: What Drivers Matter Most? — Edward L. Morse, Credit Suisse Securities Energy and the Economy Energy and the Economy — Adam Sieminski, Deutsche Bank Energy Prices and Aggregate Economic Activity — Stephen P. A. Brown, Resources for the Future Technology and Energy Transformation — Donald L. Paul, University of Southern California Energy Institute Energy Markets: The Long And The Short Term — Christof Rühl, Group Chief Economist, BP Natural Gas: U.S. Markets in a Global Context Natural Gas: U.S. Markets in a Global Context — Glen Sweetnam, EIA Smart Grid: Impacts on Electric Power Supply and Demand PHI’s Smart Grid Vision and Investment Grant Awards — William M. Gausman, Pepco Holdings The Uncertainty of Smart Grid — Christian Grant, Booz & Company, Inc. Smart Grid: Impacts on Electric Power Supply and Demand — Michael Valocchi, IBM Global Business Services Energy Efficiency: Measuring Gains and Quantifying Opportunities Unlocking Energy Efficiency in the U.S. Economy — Hannah Granade, McKinsey & Company Energy Efficiency Opportunities and Barriers — Steven Nadel, American Council for an Energy-Efficient Economy Efficiency and Intensity in the AEO 2010 — Steven Wade, EIA The Energy-Water Nexus: Availability and Impacts Energy & Water Nexus: Availability & Impacts — Shahid Chaudhry, California Energy Commission Overview of Emerging Issues and Challenges — M. Michael Hightower, Sandia National Laboratories Water Resource Challenges From Energy Production — James Richenderfer, Susquehanna River Basin Commission Energy and Water: Implications for Energy Development — Jeff C. Wright, Federal Energy Regulatory Commission

View Agenda

"General Electric to Boost Research in China" (GE) Hey, that not paying any U.S. federal taxes thing is working!

From MIT's Technology Review:

The company plans to develop products in China, for China.

GE is starting to let its research and development organizations in China take the lead on research projects, rather than just playing a supporting role to its global research headquarters in New York, says Xiangli Chen, the general manager of GE's China Technology Center.

The 10-year-old center in Shanghai is one of GE's four global research centers and home to 1,300 researchers and engineers. An additional 700 researchers develop health-care-related projects in the country at two other locations. In the past, GE has focused on creating products in and for rich countries such as the United States, and these products were sometimes adapted for poorer countries. Now it's developing products in research facilities in China and selling them in China before finding new applications for these products in its more traditional markets. GE says this is essential for competing in China, where many companies are able to offer low-priced goods and create new products for emerging markets such as China and India, as well as richer countries.

The increased competition for GE from local companies in China is due in part to a massive push by the Chinese government to promote clean energy and R&D. In recent years, it has rolled out a range of renewable energy targets and financial incentives, including significant tax breaks for companies that invest in research related to energy....MORE

From Forbes:

What The Top U.S. Companies Pay In Taxes

How can it be that you pay more to the IRS than General Electric?

As you work on your taxes this month, here's something to raise your hackles: Some of the world's biggest, most profitable corporations enjoy a far lower tax rate than you do--that is, if they pay taxes at all.

The most egregious example is General Electric ( GE - news - people ). Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.

Avoiding taxes is nothing new for General Electric. In 2008 its effective tax rate was 5.3%; in 2007 it was 15%. The marginal U.S. corporate rate is 35%.

In Pictures: What The 25 Top U.S. Companies Pay In Taxes

How did this happen? It's complicated. GE's tax return is the largest the IRS deals with each year--some 24,000 pages if printed out. Its annual report filed with the Securities and Exchange Commission weighs in at more than 700 pages.

Inside you'll find that GE in effect consists of two divisions: General Electric Capital and everything else. The everything else--maker of engines, power plants, TV shows and the like--would have paid a 22% tax rate if it was a standalone company.

It's GE Capital that keeps the overall tax bill so low. Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. (posting a $6.5 billion loss in 2009), and make lots of money overseas (a $4.3 billion gain). Not only do the U.S. losses balance out the overseas gains, but GE can defer taxes on that overseas income indefinitely. The timing of big deductions for depreciation in GE Capital's equipment leasing business also provides a tax benefit, as will loan losses left over from the credit crunch.

But it's the tax benefit of overseas operations that is the biggest reason why multinationals end up with lower tax rates than the rest of us. It only makes sense that multinationals "put costs in high-tax countries and profits in low-tax countries," says Scott Hodge, president of the Tax Foundation. Those low-tax countries are almost anywhere but the U.S. "When you add in state taxes, the U.S. has the highest tax burden among industrialized countries," says Hodge. In contrast, China's rate is just 25%; Ireland's is 12.5%....MORE

"What the Fed's 'extended period' on low interest rates might really mean"

From the Los Angeles Times' Money&Co. blog:

The Federal Reserve's promise to keep short-term interest rates low for an "extended period" has become boilerplate in its post-meeting statements.

That, in turn, has comforted financial markets, which obviously aren't in any hurry to see the Fed tighten the easy-money spigot.

But the minutes of the Fed's March 16 Open Market Committee meeting, released Tuesday by the central bank, included a discussion of what "extended period" really means -- or might mean.

The upshot: No one should assume that the "extended period" wording in a meeting statement indicates that the Fed is signaling at least several more months of rock-bottom interest rates. Policymakers might act much more quickly to raise rates, depending on the economic backdrop....MORE

"Citigroup: The Case for Continued Growth" (C)

Bloomberg does a pretty good job on this. From BusinessWeek:

Shares in the shaken financial services giant are up nearly 29% this year. Some analysts expect further gains

Anyone in his right mind might find it foolish to peg the stock market's continued run on a single company, let alone one that was considered Wall Street poison little more than a year ago. But consider that the financial sector provided much of the fuel for the 4.87% gain in the Standard & Poor's 500-stock index during the first quarter of 2010. Citigroup (C) has helped lead the sector's charge.

That's right: Citigroup, the global franchise that was on the verge of trading as a penny stock early in March 2009. The stock is trading at 4.26, after having gained 25% in the first quarter, vs. a 10.8% gain by the 79 financial stocks in the S&P 500 index. Still, Citigroup trades at less than one-tenth its value as of Aug. 8, 2007, when it closed at 49.49 a share.

Citigroup has been able to drive the financial sector's gains as much as it has only because its market capitalization hasn't plunged in concert with the share price. In fact, at $122.02 billion on April 6, it's down just 17% from $147.04 billion on Dec. 31, 2007, when the shares closed at $29.44. But the reason for Citi's robust market cap isn't cause for celebration among longtime shareholders, who have seen extreme dilution in the value of their stock as the company went on a tear issuing shares during 2009, increasing the number of common shares outstanding more than fivefold to 28.48 billion. That compares to 5.45 billion shares outstanding at the end of 2008, and 4.99 billion at the end of 2007.

There are two key reasons for caution toward Citigroup right now, despite signs of an improving economy. First, investors are worried that the U.S. Treasury Dept.'s plan to start paring its 27% stake in the company—it owns 7.7 billion shares—could put further pressure on the share price. (Institutional investors have kept away from the stock out of concern that the government's stake would limit management's freedom to make decisions.) There's also concern that the company may incur further losses by selling such impaired assets as subprime and Alt-A mortgages and auction rate securities from its Special Asset Pool at deep discounts to face value.

The Treasury Dept. announced on Mar. 29 that it would start selling its Citigroup stake with Morgan Stanley (MS) serving as sales agent. The government wants to divest its interest in Citi by the end of September 2011. If the selling puts a slow trickle of shares into the market over time via a preset trading plan, that would relieve fears of a discounted, big-block offering and could prompt institutions that have avoided the stock to start buying shares, analyst Jeffrey Harte at Sandler O'Neill & Partners wrote in a Mar. 25 research note.

2009 Citi offering repaid $20 billion

The trading volume of Citi shares in recent months provides some evidence that the Treasury Dept. could sell its shares without causing much market disruption, Harte said. If Citi's recent average daily trading volume were to hold at about 500 million shares and Treasury shares were to account for roughly 12% of average daily volume, the government would be able to sell the entire stake by the close of its fiscal year ending Sept. 30, 2010, Harte wrote. Since the target completion date is a full year later, government sales are likely to be even less disruptive....MUCH MORE

Previously:

"AN INTERVIEW WITH BRUCE BERKOWITZ: Why the Fairholme founder finds AIG, Bank of America and Citi very attractive now." (AIG; BAC; C)

"Sandler O’Neill on Citigroup: Shares Underowned by Institutions" (C)

High Praise for Bloomberg's Citigroup Story (C)

"Soros’ Citigroup Bet: Is He in the Money Yet?" (C)

"Citigroup CEO Pandit Expected to Say Citicorp Could Earn $20 Billion By 2012" (C)

"Citigroup's Stock Likely to Keep Climbing: Bove" (C)

Who Scores Big on a Move in Citigroup? John Paulson, Bruce Berkowitz, George Soros; the usual suspects

Citi Up 7% on Treasury’s Exit: Should You Buy? (C)

"Citigroup: ‘Shares no Longer Toxic?’ and Smart Money Buying?" (C; AIG; FNM; FRE)

"When you've got pirates in your sights, you don't check with Brussels" (VLO)

"L'audace, l'audace, toujours l'audace!"

("Audacity, audacity — always audacity!")
-incorrect quote incorrectly cited to Frederick the Great
in the movie Patton* (see below)

From Foreign Policy's Passport blog:

Apparently Dutch Navy Captain Hans Lodder didn't think it worthwile to check in with EU headquarters when he was gaining on a German freighter seized by pirates off the coast of Somalia:

The pirates surrendered the moment they saw the marines," Lodder said in a telephone interview Tuesday from the Dutch frigate Tromp. No one was injured.

Monday's successful rescue showed that, when swift decisions are needed, it can be quicker to work around the European Union's command. It was the first time a Dutch ship involved in the EU mission had used force to recapture a hijacked ship. ...

Lodder said he decided to seek permission from his own command for an "opposed boarding" - one where pirates may resist - rather than act under procedures laid down by Brussels.

The EU didn't seem particularly bothered by Lodder's unilateral action...MORE

The last I saw on the pirated oil tanker was:

Destroyer nears oil tanker seized by Somali pirates

*"De l'audace, encore de l'audace, toujours de l'audace..."

(audacity, more audacity, and ever more audacity...)
-Georges Danton

HBR: "Welcome to the False Recovery"

Old-timers may know Eric Janszen from his iTulip or pre-iTulip days.
Here's a chart from a piece of his we linked to a couple years ago (links below):

Total market value: Alternative energy and infrastructure.
Estimated fictitious value of next bubble compared with previous bubbles.

From the Harvard Business Review:

The one economic indicator that seems to point toward long-term hope for businesses is the increase in the U.S. household savings rate—the portion of income that wage earners aren’t spending. Savings were close to nil until the economic collapse but have been rising ever since. As of this writing, the rate stands at about 4.8%. Economists and business leaders say this is a good sign, despite the short-term drag created by decreased spending. “I would feel more pessimistic if it were still 1%,” says Gregory W. Brown at the University of North Carolina’s Kenan-Flagler Business School. Friends of mine who run companies, both private and public, have expressed pretty much the same sentiment. A savings rate that’s even in the 6%-to-8% range is respectable. And if consumers don’t return to their old borrowing-and-buying habits, the argument goes, one day they’ll go out and spend all this saved-up cash, and businesses everywhere will reap the benefits.

But in fact, the rising savings rate is telling us something very different. It’s not reflecting an imminent recovery but rather a drawn-out malaise that will soon become something like a lost decade. Because of the way the government measures household savings, the increase doesn’t signify more money in people’s wallets; instead, it suggests that consumers are paying off their mounting debt during a period of reduced borrowing. That’s no harbinger of growth.

Companies planning for sudden and relatively near-term growth should reshape their strategies to make the best of economic flatness.

FIRE Extinguishes Savings

The savings rate is one of those numbers that econo-wonks adore because it is seen as an indication of pent-up consumer demand. Its history is simple. After the early 1980s, when the FIRE (finance, insurance, and real estate) economy was born, we saw two glorious decades of falling interest rates and rising asset prices. So an entire generation internalized the false belief that home values and stock prices would forever rise. Equity portfolios averaging double-digit annual increases and home prices doubling every six years scotched any incentive to sock away 8% of income. As households spent, they also took on large amounts of debt. Cash went into mortgage payments for overpriced housing, and the savings rate dropped to near zero.

Which was fine until asset prices collapsed. Even now it’s hard to fathom that $6.3 trillion in financial assets and more than $5 trillion in real estate value vanished in the 24 months between late 2007 and late 2009. The popular delusion of asset price inflation as a savings substitute disappeared in tandem, as did millions of jobs and the portion of the economy sustained by private debt growth. When people stopped spending and borrowing, the government cut interest rates and pumped $1.6 trillion of deficit spending into the economy. This was the Great Recession, and it led to the current sharp rise in household savings, the first increase since the FIRE economy took hold.

One Step Forward, One Step Back

The reality is, households are using their savings to pay off the massive amounts of debt they accumulated even before their net worth declined a staggering $11 trillion over 2008 and 2009. The money is not going under mattresses or into bank accounts, from where it will emerge one day to jump-start the economy. It’s actually subsidizing the previous boom, which was built on debt and the presumption that assets would always cover that debt....MORE

A couple of our previous posts linking to Mr. Janszen (and others):

As One Economic Bubble Bursts, Another Takes Hold

Psst: Do You Want to Know the Future of Renewable Energy Investing?

Recession-Plagued Nation Demands New Bubble To Invest In

Idiot at Slate's 'The Big Money' Calls U.S. Army Command Sergeant Major "a bit like a hectoring parent."

That is all.




(okay, one, only one, guffaw)

"The Daily Start-Up: Auditor Questions Solyndra’s Viability" (Going Concern Warning) GS; FSLR

No wonder Solyndra investors Goldman Sachs and the estate of Wal*Mart heir John Walton pursued that $535,000,000 loan guaranatee from the U.S. taxpayer.
From VentureBeat's GreenBeat:

Audit dims Solyndra’s IPO ambitions

Following its loan guarantee from the U.S. Department of Energy, solar module maker Solyndra has been facing a battery of audits. Sounds like simple due diligence, but now auditors have called attention to the Fremont, Calif. company’s avalanche of debt and regular losses — findings that could actually dash its hopes for a $300 million public sale.

Solyndra has become the solar company to watch ever since it nabbed that $535 million loan guarantee from the Energy Department. Filing for an IPO in late December was just the next step to claim its title as one of the most promising players to watch, up there with First Solar and SunPower, both of which have gone public.

But if PricewaterhouseCoopers, the company’s audit firm, has anything to say about it, Solyndra may have to backtrack. It just added an addendum to the S-1 pointing out massive losses and negative cash flow since the company’s founding, as well as mounting debt that could bury operations within a year. The audit evaluated finances between inception and Jan. 2, 2010.

The company has not publicly acknowledged these findings, remaining in a quiet period until the public offering sinks or swims. But this isn’t necessarily a fatal blow for Solyndra. This type of “concern notice” isn’t rare for startups — a lot of successful IPOs have had them included in S-1 filings. And beyond that, A123Systems achieved a blockbuster IPO even though it’s never broken out of the red....MORE

The headline was lifted from the WSJ's Venture Capital Dispatch who gets the HT.

Here's the headline from their sister publication VentureWire:

Solar Panel Co. Solyndra Gets Going-Concern Warning As Losses Mount

Previously:

Was Solyndra the Reason Goldman Sachs Threw First Solar Under the Bus? (FSLR; GS; SPWRA)

What is Solyndra’s Cost Per Watt? (SOLY; FSLR; TSL)

First Solar Snags Rival Solyndra’s Top Scientist (FSLR)

Goldman Sachs and the Solar Land Rush (FSLR; GS)

Solyndra’s backlog passes US$2 billion as new sales agreement signed (GS)

"Deflation on the prowl as Bernanke shuts down his printing press" (FNM; FRE)

As I said last week in "Markets: What's Big and Bad and On the Horizon?":

I usually don't have much time for Gluskin Sheff's David Rosenberg. His pig-headed refusal to listen to the market as the averages advanced more than 70% was not only arrogant but expensive for his firm's clients.

I can handle arrogant as long as you're right; hell I can tolerate a fat guy in a grass skirt and spike heel Manolo Blahniks if he's right.
It would be fun to watch him tottering around.
But Mr. Rosenberg hasn't been right for a while and he's not funny.

Funny is important if you're doing the Angel of Death schtick. Here's our thinking:

Unlike his fellow gloomster David Rosenberg, Société Générale's Albert Edwards amuses* as he forecasts gloom, doom and despair. They both bow to the master, the Telegraph's international business editor, Ambrose Evans-Pritchard whose writing I once described as a "continuum that ranges from morose to suicidal.
Here he is at his despondent best...

Now here's funny. Mr. Edwards' comment that won him the prestigious Climateer 'Line of the Day' last October:

“Investors think this is a sweet spot, but it is in fact a putrid boil that has not been properly lanced”

On Sunday evening (6:35 p.m.) Mr. Evans-Pritchard hit a walk-off home run with the sub-head of the headline piece:

The most audacious monetary experiment in modern history ended on April Fools' Day. America must walk without crutches, on gangrenous legs.

Here's the rest, from the Telegraph:

The US Federal Reserve has completed its purchase of $1.7 trillion (£1.1bn) of mortgage securities, agency debt and US Treasuries, the conjuring trick of "credit easing" that allowed Ben Bernanke to create stimulus equal to 12pc of GDP.

The Fed's money creation has been more or less the size of Washington's borrowing needs for the last year, as Beijing notes with suspicion.

We will never know whether it was wise to go nuclear. My view – anathema to readers, I fear – is that Ben Bernanke and Britain's Mervyn King saved us from potential calamity. We were all too close to the tipping point illustrated in Irving Fisher's Debt Deflation Causes of Great Depressions, the moment when the sailing ship catches water and capsizes instead of righting itself by natural rhythm.

Work by Berkeley Professor Barry Eichengreen shows that global trade, industrial output, and stock markets all crashed at a faster rate over the six terrifying months after the Lehman crisis than during the early 1930s. How quickly we forget, and how easily we are seduced by a 76pc stock rally into thinking it was a storm in a teacup. Just wait until the day fiscal retribution comes.

The $1.7 trillion created out of nothing will vanish as the bonds are sold on the open market. Not too quickly, let us hope. Easy money must cushion the blow of spending cuts. Even talk of ending QE amounts to tightening. While the US economy has begun to create jobs again – plus 114,000 in March, stripping out short-term census workers – there were false dawns in 2002 and 1982. The broader U6 jobless rate nudged up to 16.9pc.

Bond vigilantes ask who will step into the Fed's shoes to soak up the flood of debt from Washington, whether from the Obama Treasury or from Fannie Mae and Freddie Mac – the mortgage giants on death row.

Yields on 10-year Treasuries have jumped 30 basis points in two weeks to 3.94pc. Alan Greenspan called it "the canary in the mine" for US sovereign debt.

The yield spike is happening even though core inflation (trimmed mean PCE) has been dropping like a stone, touching a record low of 1.04pc in February. The Fed's Monetary Multiplier is languishing at 0.815, a flat tire.

The basic 30-year fixed mortgage has risen to 5.08pc from 4.71pc in December. The US housing market looks too sickly to withstand this. New home sales have fallen for four months in a row, dropping to a half-century low in February. The inventory of unsold homes has jumped to 8.6 months supply. Some 24pc of mortgages are in negative equity.

Mr Bernanke is taking the fateful decision to knock away the props of the mortgage market even though the M3 broad money supply has been contracting at an epic pace of 6pc since September. If M3 gives early warning of six to 12 months, beware.

Mr Bernanke does not look at M3, disdaining such monetarist eccentricities as medieval sorcery. The M3 signal has certainly been erratic over the years. It can be distorted by portfolio shifts. But the refusal to even look at it has been the root of much trouble over the past four years....MORE

For the record, regarding that bolded bit, on Mar. 24 we posted Uh oh: "Treasury Chief Rules out GSEs as Buyers of MBS" (FNM: FRE):

This seems like rather a big deal. Who will buy my MBS's now?
From Structured Finance News...

"Valero to replace crude oil hijacked off Somalia" (VLO)

From the Houston Chronicle's NewsWatch: Energy blog:

San Antonio's Valero Energy will replace about 2.5 million barrels of Iraqi crude worth more than $200 million that was hijacked off the coast of Somalia yesterday, Bloomberg reported.

A South Korean supertanker called the Samho Dream was hijacked by Somali pirates early Sunday, UpstreamOnline said. On board were five South Korean and 19 Filipino crew members. The cargo was headed to the Gulf Coast.

Valero spokesman Bill Day said the cargo was not expected for several days, so the company has time to replace the supply, Bloomberg said. According to tracking data, the ship loaded on March 21 and was scheduled to arrive in the U.S. on May 10.

"We can replace it in the marketplace," Day said.

Meanwhile, a South Korean warship was ordered to pursue the captured tanker. Government spokesman Kim Young-sun told the AP that the destroyer will need a little more than a day to catch up....MORE

AP

This undated file photo shows the Samho Dream supertanker.
A South Korean navy destroyer is pursuing the South Korean-owned oil supertanker
believed to have been hijacked by pirates in the Indian Ocean off Somalia, officials said Monday.

Equities: "52-Week Highs Rolling Over: Volatility Ahead?"

After making a run toward 11K (10,988) the Industrials backed off, as did the S&P500 (top tick 1187.73).
From MarketBeat:

Strategas Research

We had to flag this chart from Strategas Research technician Chris Verrone, in a morning note out Monday. Here’s the squib that accompanied it:

“With the number of stocks making new 52-week highs now rolling over, we believe we’re likely to see some increased volatility over the next several weeks as near-term divergences are reconciled. As the chart at left illustrates, the current backdrop is reminiscent of the October ’09 and January ’10 periods.”

In short, the number of stocks hitting new annual highs is falling, and that sort of thing has preceded some of the recent dips we’ve seen in stocks....MORE

The Cost of Rising Commodities on the Consumer

I haven't seen B.I.G. do one of these in a while.
From Bespoke Investment Group:

With $85 providing nothing in the way of resistance, the price of oil is up sharply today and trading above $86. While commodity traders who are long are loving the rise in oil prices, consumers aren't nearly as ebullient, especially ahead of the Summer driving season. To them, higher prices mean more pain at the pump, and in their wallets.

In the chart below we have calculated the cumulative daily price change of the major food and energy commodities in the CRB index (Corn, Soy, Wheat, Cattle, Hogs, Oil and Natural Gas) since the beginning of 2008. We then multiplied the changes by the annual per capita consumption of each item. When the line is in the red zone, commodity prices are acting as a tax on consumers, while the green shading indicates that lower commodity prices are providing a 'rebate' for consumers. While this method may oversimplify the actual costs, it provides a good idea of how changes in commodity prices have impacted consumers' wallets over the last 18 months....MORE

Barron's blog: "Energy Conversion Devices Slides On Bearish Barron’s Story" (ENER)

The stock is down 5.7% at $7.24.
It's good to be king. From Barron's Tech Trader Daily:

Energy Conversion Devices (ENER) shares are taking it on the chin this morning following a bearish follow-up column item on the company over the weekend by my colleague Bill Alpert....

...Here’s Bill’s conclusion:

Energy Conversion can continue its zombie-like operations for a while. It is burning about $30 million of cash a quarter, and as of Dec. 31 had more than $200 million in cash and investments. But nearly all the company’s stated book value is represented by property, plant and equipment. And what is the value of a factory that makes an uncompetitive technology? It is hard to find even salvage value in the stock....MORE

In "Energy Conversion, First Solar; GT Solar; Fuel Systems, SunPower, Origin Agritech Lead NASDAQ Short Interest (ENER; FSLR; FSYS; SEED; SOLR; SPWRA)" I said:

...ENER could go broke, FSLR has the largest (percentage) short interest of any S&P 500 component, SEED popped from $5 to $14 Nov '09-Jan '10, SPWRA had the accounting scam and AMSC is just a good old fashioned high flyer that drives the value crowd nuts.....

UPDATED: "Cree Jumps After UBS Analyst Raises Shares to ‘Buy" (CREE)

Update below.
Original post:
If you wondered why posting was a bit light today, here's why.
The stock is up 8.26% at $76.86.
From BusinessWeek:

(Adds analyst, index comparison from second paragraph.)

By Todd White

April 5 (Bloomberg) -- Cree Inc. jumped as much as 9.2 percent and headed to a nine-year record in New York trading after the maker of energy-efficient lighting products was raised to a “buy” rating from “neutral” by UBS AG.

The stock climbed as high as $77.07 a share and traded at $76.75, up 8.7 percent, as of 10:54 a.m. local time, after UBS analyst Ahmar Zaman set a $92 target price.

The Durham, North Carolina-based company has gained 36 percent this year, the second-best performer on the 54-member WilderHill Clean Energy Index, which has dropped 8.6 percent in the period.

I hate copying whole pieces rather than directing traffic but on this one every paragraph counted.

Here's the 15-month price acion via BigCharts:

Which explains why, a couple weeks ago, I posted this:

Yesterday's Funniest Headline: "Uptrend Spotted in Shares of Cree (CREE)"

Some of our recent posts:

Mar 29 "Cree: The Street Sees The Light; Gabelli Says Buy; Lazard Ups Ests" (CREE)"

Cree Inc. CHAIRMAN, PRESIDENT AND CEO Charles M Swoboda sells 77,500 Shares (CREE)

Is Brigantine Advisors Analyst Ramesh Misra (PhD.) the Dumbest Guy on the Street? (CREE; FSLR)

17 Projects Shaping the Future of LED Lights (AMAT; CREE; GE; PANL; PHG; UTEK)

Cree Crushes Street Estimates; Stock Leaps (CREE)
(lots o'links)

From Tech Trader Daily:

...Zaman notes that UBS today is lifting its forecast for 2011 general lighting LEDs to 9.7 billion square meters to 7.3 billion previously, “given an increasing focus on lighting from LED companies” during recent visits with LED companies in Asia.

“Our checks in Asia suggest the bear case of competitive pressure on Cree likely takes longer to develop,” he writes. “We note that many LED chip makers in Korea, Taiwan and Japan continue to out-source high-power LEDs from Cree, as their in-house yields on lighting-class LEDs are not sufficiently high.” Zaman says that Cree and Nichia “continue to split the market for lighting-class LEDs for the near term.”>>>MORE

Nailing the Scenario: What the CIA had to say About the European Union Back in 2005 ("...Grim Warning...")

Long time readers know I am a collector of prognostications.
Here's a good one via The Scotsman:
CIA gives grim warning on European prospects

THE CIA has predicted that the European Union will break-up within 15 years unless it radically reforms its ailing welfare systems.

The report by the intelligence agency, which forecasts how the world will look in 2020, warns that Europe could be dragged into economic decline by its ageing population. It also predicts the end of Nato and post-1945 military alliances.

In a devastating incictment EU economic prospects, the report warns: "The current EU welfare state is unsustainable and the lack of any economic revitalisation could lead to the splintering or, at worst, disintegration of the EU, undermining its ambitions to play a heavyweight international role."

It adds that the EU’s economic growth rate is dragged down by Germany and its restrictive labour laws. Reforms there - and in France and Italy to lesser extents - remain key to whether the EU as a whole can break out of its "slow-growth pattern".

Reflecting growing fears in the US that the pain of any proper reform would be too much to bear, the report adds that the experts it consulted "are dubious that the present political leadership is prepared to make even this partial break, believing a looming budgetary crisis in the next five years would be the more likely trigger for reform".

The EU is also set for a looming demographic crisis because of a drop in birth rates and increased longevity, with devastating economic consequences.

The report says: "Either European countries adapt their workforces, reform their social welfare, education and tax systems, and accommodate growing immigrant populations [chiefly from Muslim countries] or they face a period of protracted economic stasis."

As a result of the increased immigration needed, the report predicts that Europe’s Muslim population is set to increase from around 13% today to between 22% and 37% of the population by 2025, potentially triggering tensions.

The report predicts that America’s relationships with Europe will be "dramatically altered" over the next 15 years, in a move away from post-Second World War institutions. Nato could disappear and be replaced by increased EU action.

"The EU, rather than Nato, will increasingly become the primary institution for Europe, and the role Europeans shape for themselves on the world stage is most likely to be projected through it," the report adds. "Whether the EU will develop an army is an open question."

Defence spending by individual European countries, including the UK, France, and Germany, is likely to fall further behind China and other countries over the next 15 years. Collectively these countries will outspend all others except the US and possibly China.

The expected next technological revolution will involve the convergence of nano, bio, information and materials technology and will further bolster China and India’s prospects, the study predicts. Both countries are investing in basic research in these fields and are well placed to be leaders. But whereas the US will retain its overall lead, the report warns "Europe risks slipping behind Asia in some of these technologies"....MORE

I haven't gotten around to the 2025 report but here it is for those interested:

"Global Trends 2025: A Transformed World" is the fourth unclassified report prepared by the National Intelligence Council (NIC) in recent years that takes a long-term view of the future. It offers a fresh look at how key global trends might develop over the next 15 years to influence world events....MORE

Ethanol: "Ethanol's Discount To Gasoline Could Pressure Refiners" (PEIX; VLO)

Six days ago I did my first ethanol post (excluding the St. Patrick's Day biochemistry of hangovers, etc.) in over a year "Pacific Ethanol announces bankruptcy reorganization plan" (PEIX)":

...It may be time to start paying attention to the group again.
If I could just remember their names....

The stock closed that day at $1.11. This morning the stock is changing hands at $1.53.
Hmmm.

From Dow Jones via Downstream today:

Corn-ethanol futures are trading at their biggest discount to gasoline futures since the summer of 2008, which could encourage more biofuel blending and pressure the margins of oil refiners.

Over the past several weeks, gasoline prices have surged during the usual seasonal rally ahead of the peak summer driving season. Meanwhile, ethanol prices have been dragged lower by rising output of the biofuel and a drop in corn prices amid ample supplies and a drop in demand for animal feed.

Attractive ethanol prices could push fuel retailers, the middlemen who deliver fuel and even some refiners to blend more of the biofuel, which would damp the recovery in gasoline demand that is crawling back from depressed levels. Refiners are required to blend a certain amount of ethanol into their gasoline or buy credits to meet the mandate.

"One should put as much ethanol as possible into the gasoline pool because ethanol is at a very strong discount to gasoline and corn is relatively weak," said Olivier Jakob, managing director of Swiss consultancy Petromatrix....MORE

Wars and Rumors of Wars: "Israel will attack Iran by Nov: ex-Israeli defence official"

Dr. (M.D.) Sneh was Deputy Defense Minister in the left-of-center Labor government.
He was considered a hawk.
His Op-Ed appeared in the left-of-center daily, Ha'aretz.
This is spooky stuff.

From The Nation (Pakistan):

Israel will be compelled to attack Iran’s nuclear facilities by this November unless the US and its allies enact “crippling sanctions that will undermine the regime in Tehran,” a former Israeli defence official warns.

In an Op-Ed in the Israeli left-wing daily, Haaretz, former deputy defence minister Brig-Gen Ephraim Sneh argues that Iran will probably have “a nuclear bomb or two” by 2011. “An Israeli military campaign against Iran’s nuclear installations is likely to cripple that country’s nuclear project for a number of years. The retaliation against Israel would be painful, but bearable,” he said.

Sneh believes that the “acquisition of nuclear weapons by Iran during Obama’s term would do him a great deal of political damage,” but that the damage to Obama resulting from an Israeli strike on Iran “would be devastating.” November is the time for elections in the United States.

Nevertheless, he writes, “for practical reasons, in the absence of genuine sanctions, Israel will not be able to wait until the end of next winter, which means it would have to act around the congressional elections in November, thereby sealing Obama’s fate as president.” Sneh says he does not foresee any U.S. military strikes on Iran. In a recent report for the Centre for Strategic and International Studies (CSIS), military analyst Anthony Cordesman concluded that Israel will have to use low-yield earth-penetrating nuclear weapons if it wants to take out deeply-buried nuclear sites in Iran.

“Israel is reported to possess a 200 kilogram nuclear warhead containing 6 kilograms of weapons-grade plutonium that could be mounted on the sea launched cruise missiles and producing a Yield of 20 kilo tons,” Cordesman writes in the CSIS study he co-authored by Abdullah Toukan.

Here are some of the points Sneh raised in the Op-Ed:

When friends are mad at you

...4. Prime Minister Benjamin Netanyahu, in accordance with his strong beliefs on this matter, cannot allow himself to be the leader on whose watch Iran acquires nuclear weapons.

5. In the absence of "crippling sanctions" that will undermine the regime in Tehran, it is reasonable to assume that by 2011 Iran will have a nuclear bomb or two.

6. An Israeli military campaign against Iran's nuclear installations is likely to cripple that country's nuclear project for a number of years. The retaliation against Israel would be painful, but bearable.

7. U.S. President Barack Obama would find it difficult, if only for internal political reasons, to take military action against Iran and thereby open a new theater for war, in addition to Iraq and Afghanistan.

8. The acquisition of nuclear weapons by Iran during Obama's term would do him a great deal of political damage. The damage that the resulting independent Israeli strike would cause Obama - soaring gasoline prices and American casualties in retaliatory operations - would be devastating.

9. For practical reasons, in the absence of genuine sanctions, Israel will not be able to wait until the end of next winter, which means it would have to act around the congressional elections in November, thereby sealing Obama's fate as president....MORE

With the President of Iran casually threatening to wipe Israel off the map, the top theocrat, Supreme Leader Grand Ayatollah Ali Khamenei in January predicted the destruction of Israel.
Now Sneh offhandedly saying war by November.

Serious business.

Egg Decorating

THE RENAISSANCE EGG: A FABERGÉ IMPERIAL EASTER EGG PRESENTED BY EMPEROR ALEXANDER III TO HIS WIFE THE EMPRESS MARIA FEODOROVNA AT EASTER 1894,WORKMASTER MICHAEL PERCHIN, ST. PETERSBURG
From Treasures of Imperial Russia

1899 – Clock Egg or Bouquet of Lilies Clock or Madonna Lily Egg

Dimensions: height 27 cm (10.6 inches)

907 - Cradle with Garlands Egg

Dimensions: Height: 14,6 cm (5.7 inches)

Source

1899 - Resurrection Egg

The egg depicts Jesus rising from his tomb, and is the only
Fabergé egg to explicitly refer to the Easter story^.

Thanks to the folks who put this together.

Eight of the eggs are missing.
Now that's an Easter Egg hunt!

"Peep Show"

The Washington Post just had their fourth annual Peeps diorama contest.
Here's the site.

Here's one of the 2010 submissions:

Goodnight Peep

And a 2009 submission via Urlesque:

M.C. Escher's "RelativiPeep"

The Chicago Tribune and the St. Paul Pioneer Press are also into Peeps, here's an entry from each:

The Chicago Tribune has a Peeps diorama contest called Peeps on Parade. One of the many entries is Octopeeps, a tableau that depicts new babies of mother-of-14 Nadya Suleman.

“The Wonderful Wizard of Peeps”

In this paper-made Land of Oz, these Peeps-on-a-mission have just come to the end of the yellow-brick road in hopes of meeting the Wizard! If they only had some brains... Showcased on WashingtonPost.com; submitted by Kate Braggs. Slide 9.

Not to be left out, the ABA Journal (Peeps in Law):

Twelve Angry Peeps

Google's Easter Egg Page (ages 0-4 and equity analysts)

HERE

Jobs Report "Economists React: ‘Good Friday’ for Labor Market"

From Real Time Economics:

Economists and others weigh in on the strong jump in jobs and sideways move in the unemployment rate.

• The most salient insight to be gleaned from these data is the net gain excluding weather and census effects, and that is positive. Despite the distortions in these data, the labor market definitely improved in March, and the trend in the payroll statistics is decidedly positive. The March nonfarm payroll data was slightly weaker than expected and the revision to the prior two months, January and February, was positive. –Ray Stone, Stone & McCarthy
• Today’s employment report is, in our opinion, quite good, although not without its drawbacks. Income growth continues to be lackluster, complicating the spending picture in the immediate future. However, should job growth prove sustainable, incomes will catch up to spending patterns, thus validating the improvement we’ve seen in the first quarter. Simultaneously, it is quite worrisome to see the ranks of the long-term unemployed swell further. There is concern surrounding the skillset of these individuals and the longer they are out of the workforce, the further their skills erode. However, this action shouldn’t be entirely surprising given the fallout in the construction, manufacturing, housing and financial sectors. Indeed, nearly 52% of people are classified as “not on temporary layoff.” That is to say, more than half the unemployed are not getting their jobs back. –Dan Greenhaus, Miller Tabak
• Many of the jobs created were temporary: temporary workers represented 40,000 jobs, and federal government temporary workers for the Census increased by 48,000. Although the government Census jobs are the result of a unique situation, private sector temporary workers are some of the first hires as an economy begins to see improvement in its employment. –Jason Schenker, Prestige Economics
• The lower-than-expected headline gain in March was due to far fewer census workers being hired (48,000). So far this year, just 72,000 census workers have been added to the government’s payroll (versus 139,000 over the comparable period in 2000). Census hiring typically accelerates sharply in the spring (workers must be hired to go door-to-door, following up with those households that did not return their questionnaires). In total, more than 800,000 temporary census workers could be hired by mid-year (note: most will be off the government’s payroll by October). Just because the hiring didn’t show up in March doesn’t mean it isn’t coming. –Michelle Girard, RBS
• Good Friday is apparently a good release date for the U.S. employment report. The last time, the BLS published the employment report on a Good Friday was in April 2007. Back then, nonfarm payrolls rose another strong 239,000 and the unemployment rate fell to a cyclical low of 4.4%. While the overall economic situation couldn’t be more different this time, today’s employment report is the strongest in more than two years. –Harm Bandholz, Unicredit
• A significant turning point for the labor market. The headline came in a little short of consensus, but there were less Census workers and more private jobs than expected. Hefty upward revisions and solid hours and income details. A weather-related bounce is probably flattering March’s strength but the trend is still unquestionably one of progress. –Jay Feldman, Credit Suisse

...MUCH MORE

"Bell begins to toll for bonds; Turning point could be nasty for stocks too"

From MarketWatch:

Last week was pretty scary in the bond market.

Three auctions -- of two-, five-, and seven-year Treasurys -- flopped, as buyers, especially foreign investors, sat on the sidelines.

That triggered a huge sell-off in Treasurys, the world's most liquid fixed-income market.

Yields, which move in the opposite direction from bond prices, soared.

The yield on 30-year Treasurys briefly came within a hair of 5% before settling back to the 4.75% range. The ten-year note's yield hit 3.9%, driving 30-year mortgages, which are priced off that ten-year note, over the 5% mark.

All these rates are much, much higher than they were back in December 2008, when bond yields hit generational lows.

The poor auctions and subsequent dumping of bonds set off all kinds of alarms. Is inflation right around the corner? Are foreign holders of U.S. debt, the people we've counted on to keep financing our ballooning deficit, finally saying no mas? And is our low-interest-rate Nirvana gone for good?

My answers to those questions are: no, probably not, and probably.

I don't think inflation, especially hyperinflation, is anywhere on the horizon. And I don't believe foreign buyers are giving up on U.S. debt -- for many of them, it's practically the only game in town.

But in the wake of the crisis in Greece; rumblings about Portugal and other European countries; worried noises by rating agencies about the creditworthiness of the United Kingdom and the U.S., and last week's signing into law of President Obama's mammoth health-care reform bill, foreign and domestic buyers may well demand higher interest rates to compensate them for the perceived higher risk of owning U.S. government debt.

Last week's big surge in rates is also getting the attention of some savvy technicians who think we could be at a major turning point for bonds.

Pamela Aden, who with her sister Mary Anne edits the Aden Forecast, a technically-based advisory service that follows big trends in stocks, bonds, commodities, and currencies, says bonds are threatening to reverse trends going back nearly three decades.

She cites the following chart (reprinted courtesy of the Aden Forecast), which traces the yield of the long bond back to the Depression year of 1930:

As you can see, the yield on the 30-year Treasury peaked above 14% in 1981, then started a steady decline to its late 2008 low of 2.6%. It's rebounded since then, along with the economy and the markets, as fears of financial collapse faded....MORE

"What do the Markets Like About the Jobs Report?" and "Why is it Moving the Dollar?"

Typing the headline I couldn't help remembering an old cartoon:

"Where are we going and why are we in this handbasket?"

A twofer from MarketBeat:

So despite the headline number disappointment, the markets seem to be pretty pleased that the entire report was not based on Census hiring. “Private employment was up 123K. The market was concentrating on this number [excluding government workers] (given census worker distortions), and the private employment was significantly better than expected,” wrote Alan Ruskin of RBS....MORE

Jobs Report: Why is it Moving the Dollar?

While stocks won’t be trading Friday due to the Good Friday holiday, the global currency markets are still on the move. And on that count, the dollar caught a favorable bit of momentum on the jobs report, strengthening against the euro, the British pound and the yen. Brown Brothers Harriman currency strategist Marc Chandler offers his two cents...MORE

Early Reactions to the Jobs Report

We'll have a couple posts on today's employment numbers.
First up, Carpe Diem:

Early Indicators: Record 5-Month Increase in Temp Workers; 19-Month High for Mfg. Overtime Hours

...Bottom Line: Both the surge in temporary workers and the increase in overtime hours are early indicators of a broader recovery in the labor market, and signal future increases in job creation. In the early stages of economic recovery, it makes sense for cautious employers to both increase temporary hiring and increase overtime hours of existing hours. As the economy stabilizes and expands and employers become more confident there will broader hiring for permanent workers.

From EconoSpeak:

Another Incremental Improvement of a Bad Labor Market

...Our graph shows that we have had very modest improvements in the employment-population ratio for the last 3 months – from 58.2% to 58.6% - as we have also seen the labor force participation rate rise – from 64.6% to 64.9%. Note also the tremendous decline in the employment-population ratio from December 2006 to December 2009. The rise in the unemployment during this period understated the decline in the employment-population ratio as labor force participation also declined. While we are making small progress, we are very far away from a healthy labor market.

The Asia Times' Inner Workings blog:

A Weak Employment Report

Health care and temporary service employment accounted for the bulk of the weaker-than-expected payroll report, and the so-called underemployment rate actually rose....

...Throw in 15,000 factory jobs, and that’s it. The ADP report showed a decline in manufacturing employment, so that’s within the range of statistical error. It’s remarkable how little manufacturing employment has grown given the improvements in Asia, suggesting that the tidal effect of Asian growth on the US is limited.

A major factor in the improvement is the fact that construction employment has stabilized at extremely low levels. It really is so bad that it can’t get much worse. During the past two months, construction deducted about 60,000 from the totals. At this to the 48,000 pop in census-driven government employment, and the number looks very weak indeed.

Finally the WSJ's Real Time Economics blog:

Broader U-6 Unemployment Rate Increases to 16.9% in March

The U.S. jobless rate was unchanged at 9.7% in March, flat from the previous month, but the government’s broader measure of unemployment ticked up for the second month in a row, rising 0.1 percentage point to 16.9%.

The comprehensive gauge of labor underutilization, known as the “U-6″ for its data classification by the Labor Department, accounts for people who have stopped looking for work or who can’t find full-time jobs. Though the rate is still 0.5 percentage point below its high of 17.4% in October, its continuing divergence from the official number (the “U-3″ unemployment measure) indicates the job market has a long way to go before growth in the economy translates into relief for workers....MORE

General Electric's New Wind Turbine: "How It Works: The Next-Gen Wind Turbine" (GE)

From Popular Science:

To take advantage of the strong winds that blow over the ocean, this gearless turbine uses a giant ring of magnets and 176-foot blades

Next-Gen Wind Turbine GE OFFSHORE TURBINE Rotor Diameter:360 ft. Tower Height: 300 ft. Maximum Power: 4 Megawatts | See It Bigger Here Nick Kaloterakis

There’s enough wind energy along our coastlines to power the country four times over, and the race is on to build the best offshore turbines to capture it. Manufacturers worldwide are experimenting with two techniques: ever-longer blades to harness more gusts, and simplified drivetrains (including new generators) that slash the need for costly repairs at sea. GE’s upcoming machine, slated to go online in 2012, will combine both into one package....MORE

A Twist on Blades: The longer a turbine’s blades, the more wind it captures and the more electricity it creates. “If we could, we would just build infinitely longer blades,” Mercer says. “The problem is, blades get heavy and flexible.” That flexibility, coupled with the force from very high winds, can bend blades so much that they burden the machine or even smack the tower. So GE designed a blade that twists as it bends. It’s curved backward about eight feet, instead of extending straight out. When a gust pushes the tip up, the blade twists slightly around its curve—instantly angling itself so that it bears less of the gust’s brunt yet still captures a large part of its energy. Nick Kaloterakis

HT: Big Gav at Peak Energy
HT: Inhabitat

UPDATED: "ALERT 2: Bernanke Calls Expedited Meeting "

Update:
From EPJ:
More on the "Expedited" Fed Meeting

WSJ's Kelly Evans emails me to point out that the Fed's "expedited" meeting is a regularly scheduled event.

I saw the Fed notice last night after the Fed press office was closed, so I couldn't follow up until this morning. A quick call to friends at the Fed backed-up Kelly. Expedited at the Fed doesn't mean, well, expedited. I am getting the distinct sense from people who should know that nothing is going to happen at this meeting....

Original post:

Economic Policy Journal is on the ball:

Okay, first Giethner cancels a visit to the Bronx, now Bernanke is calling an expedited meeting for Monday. They have my attention. Here's the Federal Reserve's full announcement:

Advance Notice of a Meeting under Expedited Procedures

It is anticipated that a closed meeting of the Board of Governors of the Federal Reserve System at 11:30 a.m. on Monday, April 5, 2010, will be held under expedited procedures, as set forth in section 26lb.7 of the Board's Rules Regarding Public Observation of Meetings, at the Board's offices at 20th Street and C Streets, N.W., Washington, D.C. The following items of official Board business are tentatively scheduled to be considered at that meeting.

Meeting date: April 5, 2010

Matters to be Considered:

1. Review and determination by the Board of Governors of the advance and discount rates to be charged by Federal Reserve Banks.

A final announcement of matters considered under expedited procedures will be available in the Board's Freedom of Information and Public Affairs Offices and on the Board's Web site following the closed meeting.

For more information please contact: Michelle Smith, Director, or Dave Skidmore, Assistant to the Board, Office of Board Members at 202-452-2955 202-452-2955 .

Supplementary Information: You may call 202-452-3206 202-452-3206 beginning at approximately 5 p.m. two business days before this meeting for a recorded announcement of any bank and bank holding company applications scheduled for the meeting; or you may contact the Board's Web site at http://www.federalreserve.gov for an electronic announcement about applications and other expedited items, as well as procedural and other information about the meeting.

Dated: April 1, 2010

This is pretty much the exact wording the Fed used the last time they raised the discount rate

...MORE

Solar’s Big Question: What Happens in the Second Half? Wie geht es Ihnen, Deutschland? (FSLR; SPWRA; STP; TSL)

You had me at Wie gehts.
From Greentech:

Will the second half of 2010 look like the first half of 2009? That's the big fear in the solar industry, according to speakers at the 2010 Solar Summit sponsored by Greentech Media.

Solar is growing. Make no mistake. Globally, 9 gigawatts of solar may get deployed this year, according to GTM Research. That would be 50 percent growth over 2009. But declining prices for panels and factory capacity will squeeze margins. And changes to subsidy programs may create a situation where demand slows as the year goes on.

"That's what we are all holding our breath about," said Jim Pierobon, vice president of policy and marketing development at Standard Solar, during a meeting in the hallway.

As usual, the big factor determining the health of the industry is Germany. In the first half of 2009, only around 500 megawatts of solar were installed in Germany. In the second half of 2009, approximately 2.5 gigawatts of solar were installed in the country, according to GTM Research senior analyst Shayle Kann.

"That's a fivefold increase in the second half of the year," he said.

Germany, however, is set to readjust its feed-in tariff on July 1. The tariff for rooftop installations will likely decline by 16 percent and 11 percent for ground-mounted installations. The industry may not sink into the funk it found itself in in 2008 and 2009 as the German market slows, but it will likely, palpably slow.

"Germany will quickly lose its shine in the second half," said Kann. "There is a rush to get projects (in Germany) in the ground now."

What does this mean for module makers? By the middle of the year, modules might sell for $1.50 to $1.75 per watt in Germany. But if demand dips, the prices may have to dip toward $1.35 a watt in Germany. Not everyone will be able to sell at that price and make money, said Kann.

How bad the drop is depends on a variety of factors. Italy could soak up a lot of the modules now coming out of factories. Italy installed 544 megawatts of solar in 2009 and 47 percent of that total came in the last two months of the year, Kann said. The margins for independent power providers in the country is quite healthy, helped in part by high prices for conventional power in Italy. Up to a gigawatt could get installed in Italy this year.

"But it can't replace Germany," he said....MORE

"Electric Car Bear Janney Sets Sell On ENER1, Neutral On A123" (AONE; HEV)

From Tech Trader Daily:

Skeptical on the market for electric cars, Janney Capital analyst John Roy today launched coverage of Ener1 (HEV) with a Sell rating, while starting A123 (AONE) at Neutral. Both companies make car batteries used in electric and hybrid vehicles.

Roy predicts that the electric vehicle battery stocks are headed for a pull back this year “as the timeline for electric vehicles lengthens.” In short, he thinks the merits of fully electrics cars are overblown, for four reasons:

• They pollute more than regular cars. Roy says that a National Academy of Sciences study finds that even by 2030, internal combustion engine cars will be 9% cleaner than full-battery electric vehicles, and 17% cleaner than plug-in hybrids....MORE

Goldman Sachs on EUR/USD: "no freaking clue where the EUR will go next" (GS)

The quote is from ZeroHedge not Goldman. Here's the story:

Maybe Third Time Will Be The Charm: Goldman Capitulates On Second Failed EURUSD Reco; New Target Set At $1.35

Less than a month after Goldman braved the choppy and hypervolatile waters of pillaging and raping its biggest clients (aka tactical FX recos), with first a buy EUR, then sell EUR reco, the firm has captulated, and is calling for a $1.35 target: essentially saying it has no freaking clue where the EUR will go next.

Changing Our EUR/$ Forecasts

The Euro will likely remain stuck between two largely offsetting forces. Cyclical acceleration in the Eurozone and deceleration in the US, external balances and the outlook for earlier monetary policy normalisation by the ECB all suggest upside risks for the Euro. But on the other hand, the uncertainty about Greece and, more importantly, about the institutional set-up of the Eurozone will command a high fiscal risk premium for the foreseeable future. We have revised down our 3mth and 6mth forecasts to the same level as our old 12mth forecast, 1.35 flat. Other forecasts are affected through the Euro crosses.

And even as Goldman clients lost a boatload, Goldman being on the other side of both these trades, made mint....

Very similar to their behavior back in 2008:

It’s official, Goldman capitulates on oil

...TURNS OUT, $200 CRUDE WAS TOO AGGRESSIVE A CALL

That ‘’super spike” in oil prices that Goldman insisted would lift crude to $200 a barrel ….? Turned out to be a dagger that has pierced Goldman itself. It never really turned out to be that prescient: instead of the 50% jump in oil that Goldman anticipated back in May, when it made the call with crude trading at $132, the price of a barrel never got more than 11% higher. And has since, of course, lost fully two-thirds of that price in the intervening four months.

Now Goldman is left with the ignomy of summarily abandoning the investors who listen to its research calls, telling them effectively that they’re on their own. On Thursday, Goldman said it was ”closing” its recommendations for oil trades. Meaning that in a perilous time when the traders who pay attention to Goldman’s recommendations could use some guidance the most, Goldman has opted to give them the least. And some traders are furious about it, comparing the maneuver to then-strategist Abby Cohen’s decision to abandon her targets for equity indexes in the fall 2001, citing the uncertainties abounding in the market.

Goldman specifically talked about four trade recommendations it previously issued, and said clients shouldn’t put any stock in them any longer. One particular trade, a Nymex-WTI swap on the 2012 contract, issued in September, when crude already had declined to below $70, suggested that the contract would reflate to a range of $120 to $140. Obviously, that hasn’t happened....MORE

They bagged the pension funds on that one. I wonder who fell for the currency play?

" D.C.-Area Escorts Offer Free Services to Congress for Vote on Climate Bill"

Please note the date. If true this story has its "pros and cons".
From Triple Pundit:

As the 40th anniversary of Earth Day approaches, Congress is heating up over debate around the proposed Kerry-Graham-Lieberman Bill, which would establish sweeping federal energy and climate legislation.

As tensions rise, high-end escorts in the greater Capitol Beltway area have offered their services for free to any member of Congress who votes in favor of the bi-partisan effort on the part of Senators John Kerry (D-MA), Lindsey Graham (R-SC) and Joseph Lieberman (I-CT) that hopes to spur clean energy growth and create green jobs.

Mary Walters, who is the proprietor of a well-known escort service in the Washington, D.C. area, first announced that her company would not charge when she noticed environmental issues taking a back-seat in the political process to health care reform, which recently passed Congress in historic fashion.

Walters, cousin of the late Deborah Jeane Palfrey, the so-called “D.C. Madam,” drew inspiration from Danish colleagues who pledged a similar show of support during the U.N. climate talks held in Copenhagen last December.

Many analysts have predicted the demise of the Kerry-Graham-Lieberman Bill after the tragic death of the Waxman-Markey Bill last year, which divided lawmakers neatly down party lines regarding American priorities and responsibilities towards to the global climate crisis.

“We always see how political name-calling and back-and-forths get us nowhere, and we just want to do what we could to help the environment,” said Walters in a recent interview.

“You can’t get a politician to change his mind isn’t by talking his ear off in a stuffy room in the Senate,” she added. “But, then again, there are some things we still need to figure out how to do outside of the bedroom.”

"How Cisco's Revenue Could Hit $100 Billion" (CSCO)

A long time favorite. In late pre-market trade the stock is up about 3/4 percent.
From Barron's Hot Research:

Ticonderoga says building out connected communities could be big.

CISCO SYSTEMS (TICKER: CSCO) has been aggressively pushing to expand its addressable market opportunity by leveraging core routing, switching and advanced technologies businesses into new markets.

As such, the company is currently pursuing over 30 market adjacencies, including Smart+Connected Communities. Keep in mind, the current revenue generation from these 30-plus adjacencies remains small, but the longer-term opportunity (three to seven years out) is significant, in our view. If some of these large-market adjacencies pan out, we believe Cisco could approach $100 billion in revenue over the next decade....

...Cisco's Smart+Connected Community initiative remains in the early stages with no revenue recognized just yet. However, we believe that the long-term potential could be meaningful with a greater focus on the developing markets. Cisco estimates that 500 million people will be added to cities around the world over the next five years, while more than 100 new cities will be created with over one million residents by 2050 that will drive trillions of dollars in infrastructure investment.

With the network as the platform vision, Cisco is leveraging products, partnerships, solutions and services in areas such as Smart+Connected Real Estate, Smart+Connected Utilities, Smart+Connected Transportation, Smart+Connected Safety & Security, Smart+Connected Learning, Smart+Connected Health and Smart+Connected Government.

[We rate Cisco at Buy with a $32 12-month target price.]

Journalism: "Dot Earth Moves to NYT Opinion Section"

I'm sure there will be commentary from all sides. In the meantime here's the straight poop from the Columbia Journalism Review's The Observatory blog:

After two-and-a-half years and 940 posts as a news blog, Andrew Revkin’s Dot Earth site will be moving to the Opinion section of The New York Times’s Web site, according to an announcement he posted Wednesday afternoon.

Revkin, who was a staff reporter at the paper from 1995 until he took a buyout at the end of December, launched the environment and sustainability blog in October 2007 and has continued writing it since leaving daily reporting.

“One reason I started Dot Earth is that it’s hard to find space in the newspaper for these other issues,” he said in December 2008, after winning the John Chancellor Award for his roughly twenty-plus years dedicated to climate coverage. “So the blog created a space to keep sustained focus on them.”

Since leaving his staff job, however, Revkin—who has accepted a position as a “senior fellow for environmental understanding” at Pace University—has expressed a desire to move even farther beyond the constraints of traditional news reporting.

“I no longer see journalism, on its own, as the single best use of my remaining days,” he wrote upon taking the Times’s buyout offer in December. “In a world of shrinking specialized journalism, direct outreach will be more vital than ever.”

“There have increasingly been times when I’ve felt that I wanted to give my own straight view of things,” he added in an interview on Wednesday. Nonetheless, Dot Earth won’t look drastically different now that it’s headed to the Opinion section. In his post announcing the move, Revkin wrote:

Don’t expect momentous changes. I’m not going to suddenly be revealed as an ardent liberal or conservative.

I am an advocate, for sure — for reality.

I’ll try to maintain the discipline to be “caustically honest” (to steal a phrase used by a climate scientist in a story of mine on tipping points last year) in weighing the issues and opportunities confronting humanity as its astonishing 200-years-and-counting growth spurt crests.

As a freelance blogger, I will say what I think in ways I could not when I was a Times reporter. I’ll do this in a space occupied by other ex-Times reporters, including Timothy Egan and Linda Greenhouse.

One other facet of Dot Earth won’t change: the blog will remain home to a dynamic, sometimes exhausting exchange of reader comment. Many blogs focusing on the environment seem mainly focused on creating a comfort zone for like-minded citizens. Dot Earth will continue to be a place for the expression of all pooints of view — as long as those views are expressed in civil and constructive ways.

Revkin said that after the leaving his staff job at the Times he and editors had been in open discussion about how to sustain a freelance relationship, and that a “combination of factors” led to the decision to move from news to Opinion....MORE