Friday, March 30, 2012

Gore Likens Carbon to Subprime Debt in Plan to Repair Capitalism

This week I simply am providing you all an article from Bloomberg from 6 weeks ago. The Architect of Fisker now has performed the math to correlate carbon to sub prime loans. Oh yes Al, the Chinese who have increased their carbon emissions four fold in 15 years have no economic activity. The Greeks who have not increased their carbon emissions over the same period have a wonderful economy. Yes Al you did invent the internet! Yes Al you did a great job as Vice President! Yes Al you deserved your Nobel Prize. And yes Al you managed to make mega millions without even buying a lottery ticket by being so green. I hope you all get the same chuckle I did in reading the article below. PS does David Blood have green blood? Also as he was from Goldman Sachs how did he fare in the subprime crisis?

By Simon Clark
Feb. 16 (Bloomberg) -- Former U.S. Vice President Al Gore said investors in oil and gas companies who ignore the cost of emitting carbon dioxide and other greenhouse gases are making a mistake similar to those who invested in subprime mortgages.
“The value of the subprime mortgages was based on a false assumption,” Gore said yesterday in an interview. “In almost exactly the same way, the value of all of these carbon fuel reserves is based on a similarly absurd assumption.”
Gore made the analogy as Generation Investment Management LLP, the asset manager he founded with former Goldman Sachs Group Inc. executive David Blood, published a five-point plan titled “Sustainable Capitalism” to reform the investment industry. They want the proposals to help combat climate change and poverty as well as boost profit in the long term.
Gore and Blood recommended investors identify “stranded assets” whose value would change significantly under certain scenarios, such as a price being set for carbon or for water. Second, they said investors should use environmental, social and governance data as well as financial data to value companies. Third, companies should end quarterly earnings guidance to remove pressure for short-term gains. Fourth, companies should reward managers for long-term performance, and fifth, investors should be rewarded for holding shares longer with “loyalty- driven securities,” Gore and Blood said.
“The bitter experience that the subprime mortgages caused should be a reminder that stranded assets have the potential for doing a great deal of damage,” Gore said in a video link between Generation’s New York and London offices. The firm manages about $6.5 billion.
“These subprime carbon assets have an asserted value based on the assumption that it’s perfectly OK to put 90 million tons of global warming pollution into the atmosphere every 24 hours,” he said. “Actually it’s not.”
‘Absurd Assumption’
Gore, a Democrat who won a Nobel Prize in 2007 for his efforts to raise awareness of climate change, said the “absurd assumption” that he sees underpinning energy stocks may collapse in the next decade.
Gore said energy companies also aren’t properly valuing the water resources they use for hydraulic fracturing, or fracking -- technology that releases gas trapped in shale rock by injecting water, sand and chemicals underground.
Gore’s comparison of carbon and subprime debt comes a month after a group of U.K. investors and environmental campaigners wrote to Bank of England Governor Mervyn King urging a probe into whether the U.K.’s holdings of investments in greenhouse gas-emitting industries poses a risk to financial stability.
U.K. Study
“There is clearly scope for further evaluation of these issues,” King wrote in his Feb. 1 reply, posted on the website of Climate Change Capital Ltd. “We will endeavor to include this in the list of topics we regularly discuss with market participants to assess whether or not this is a risk of which they are aware and the extent to which they are taking it into account in their investment decisions.”
The U.K. government in 2006 published a now widely cited study by its top climate economist at the time, Nicholas Stern, which said spending 1 percent of economic output on combating climate change could avert future expenses of between 5 percent and 20 percent of gross domestic product.
Gore and Blood said adoption of their proposals was necessary to restore public faith in capitalism, which they said had been eroded during the financial crisis, in which taxpayer funds were used to bail out banks and insurance companies.
“There are rather glaringly obvious problems with the way capitalism is operating today, in spite of its great virtues,” Gore said. “There are very big problems that should cause all participants in markets to think long and hard about how those problems can be remedied.”
--With assistance from Alex Morales in London. Editors: Steve Bailey, Robert L. Simison

Wednesday, March 28, 2012

A 123 trades for $1.20

For several years I have opined that A123 the lithium ion battery manufacturer will go to a flat line of zero electrical activity and that its share price will eventually reach the value implied in its name. That is $1.23 a share. Well today my forecast has come true. The Department of Entropy funded company is trading at $1.20 a share (AONE on the NASDAQ) based on the news that they produced $55 million of defective batteries that now must be replaced. Of course these defective batteries made their way into the Fisker cars that have failed on the road and even during the recent Consumer Reports road test. Fisker also received Department of Entropy funding in a pyramid scheme where AONE owned part of Fisker. The whole house of cards that Chu Chu built as the architect of green is collapsing rather rapidly. Mr. President if you have the guts to admit failure please fire Chu Chu !!

I can live with midgrade gasoline costing me $4.55 a gallon. I can live with cheese and meat costing over $20 a pound at the Whole Paycheck. I can live with Korea testing long range missiles. I can live with the Afghanis protesting how “little” we have done for them. I can live with the Greek economic crisis. But I cannot live with a dead battery in my pace maker! It is time for a new Secretary of Energy who need not have a Noble Prize in Physics but one who can actually avoid wasting billions of dollars that simply transfers wealth from the poor to the rich. Even Sam the Sham Bodman did not have the chutzpah to execute this level of massive wealth transfer with his hair brain hydrogen and ethanol ideas. Jimmy Carter was once a nuclear engineer and he really wants to help. Maybe Mr. President he can fill the role of Energy Secretary until Al Gore learns thermodynamics. By the way where is Al Gore we have not heard from him in a while. He might be hiding in a cave on the Afghanistan Pakistan border? I say we send a team of Navy Seals to find the slippery green eel.

Saturday, March 24, 2012

Decoding the Coda

The latest electric vehicle to hit the store shelves here in California is the Coda. A few months back I compared the cost of a Coda to a Mercedes C320 and blogged that there was no comparison between the two cars and that I would buy the Mercedes hands down. Well Coda managed to lower their base price a little by using fewer batteries with a less amount of power stored and hence less range for the plug in heap of junk. The car now has 31 kilowatt hours of battery storage and a range of 88 miles in perfect weather with neither the heater nor the air conditioner operating. The Coda is brought to us courtesy of the republicans and without so called “Obama Money”. Hank the electron in the tank Paulson who was GW’s Secretary of the Treasury is an investor in Coda. Of course Coda tried to get Chu Chu to hand over hundreds of millions for the project to bring a Chinese electric vehicle to US. The company claims that the Coda is US produced as the finally assembly of the vehicle is done here in Northern California. Coda also states that the electric motor is made in the US and also inserted into the car in the final assembly here State side. The car will retail for something like $38,000 and perhaps some $4,000 is value added performed in the United States so I suggest we call the Coda a 10% US made vehicle that is targeted to serve 0.001% of the motorists out there. Good job Hank you will only lose private money on this endeavor.

I do have to applaud Coda for their honesty in setting their range. Unlike Tesla who flat out fib on their website about their range, Coda actually provides a calculator that does set the 88 mile range in real conditions. Maybe the Republicans do tell the truth? Mitt has finally asked Obama to fire Chu Chu and several other cabinet secretaries. Good job Mitt you must have read the Green Machine and now that you have basic thermodynamics etched in your sketched mind we are going to have a coherent energy policy if you win the upcoming election. As Steven Tyler said “dream on”.

Stealing the words of Steven that may well apply to the November election

“Half my life's
in books' written pages
Lived and learned from fools and from sages
You know it's true
All the things come back to you”

We have this blue and red State thing. Blue for Democratic and red for Republican. In Steve Tyler's mind there was a verse in the song Dream On that was dropped, and went as follows:

“Listen, dream on , dream on, dream on

Dream until the dream come true

Yea dream on, dream on, dream on

Dream until your body getting blue”

Perhaps when the slate is cleaned after the Republican primaries and Mitt can play etch a sketch with his policies, his body will be getting blue and his tilting to the right will swing like a pendulum to the left. As for Coda I think they will remain in Coda Blue even though their P&L statement will be perfectly red.

Monday, March 19, 2012

It’s a Gas

Twenty five years ago I started a company with my wife called Itz A Gaz Inc. This company brought joy to over a million kids and grown-ups by selling a kit for in home and do it yourself inflation of helium balloons. With the recession of 2008 the sales of the kit ended, but life for me is still a gas. Actually life all around us depends on gas and we are indeed fortunate to live on a planet with an atmosphere composed of oxygen, nitrogen and argon that promotes life. Some planets have very inhospitable atmospheres and Titan one of the eight moons around Saturn has an atmosphere composed almost entirely of methane.

This blog is dedicated to usefulness of methane for powering our planet earth. Methane is the major constituent of natural gas, a fuel we use for heating our homes, cooking, and heating our hot water. Methane also has many industrial uses such as to manufacture ammonia fertilizer, methanol, gasoline, diesel, candle wax, hydrogen, urethane, plastics such as polycarbonate, and also ethanol. The US is blessed with a massive and recently discovered reserve of natural gas called shale gas and there are now plans to compress or liquefy the gas and then use the gas as a transportation fuel to displace gasoline and diesel. Natural gas has displaced a large amount of coal in electric power generation and state of the art generation stations using natural gas emit only half of the carbon dioxide tonnage than coal fired power generation stations. The President who in every way is pro alternate energy and anti fossil fuels has suddenly embraced shale derived natural gas a clean and good domestically sourced fuel. There is no doubt that shale gas will help propel the economy forward and generate good paying jobs that are sorely needed.

Just recently the US department of energy’s information agency published some statistics that while the US is blessed with vast shale gas reserves, China is twice as blessed with twice as much potential shale gas reserves. The US uses natural gas for approximately 25% of our energy use, while China only obtains approximately 3% of its present energy use from natural gas. The discovery of vast shale gas deposits in China will mean that natural gas will play and increasing role in China’s energy mix and cleaner skies and more efficient power generation will develop in China. They too will deploy the latest methods to extract shale gas and they too will enjoy the benefits of this cleaner and now more abundant fuel. It is quite amazing how a simple gas like methane deep in the earth will give the energy intensive global economy some breathing room till we transition to a different way of living that is not as energy dependent as our Brady Bunch lifestyle. After shale gas the world will continue to rely on methane that will likely be extracted from hydrates that are deep in our oceans. My belief is that in 100 years into the future methane will still be playing and important role as a fuel and chemical feedstock. Methane truly is a gas and I suggest you click on the youtube link and listen to the words of Alfred E Neuman mister what me worry from Mad Magazine.

Saturday, March 10, 2012

Karma and Dogma

As predicted by the Green Machine A 123 the lithium ion battery company Dr. Stevie Not So Wonder funded big time has its stock headed to $1.23 (AONE on the NASDAQ). They had terrible quarterly losses and are bleeding as if all of their bloodstream is filled with low molecular weight heparin. Yeah the heparin scare of a few years back with Chinese producing tainted heparin is back as A 123 will move production to China. OK enough about clots (the British and South African word for an ignoramus. A perfect sentence using the word clot is as follows: The governator is a clot.

Stevie Not So Wonder has all but disappeared from the airwaves. I guess he is playing the role of Major Tom this election year and his ground control at the DNC is not even saying “can you hear me” let alone saying “speak for me”. Newt the not so Beaut has suggested Chu Chu resign and disappear in a dark tunnel. Chu told a Congressional Committee two days ago that he does not even own a car. That is actually a bloody good thing as there is no doubt he does not have the DNA for being a good driver. Rick in the Sanatorium is so coo coo that he has no interest in the energy secretary only in miracles from God. Mitt the Twit admits to eating a bowl of cereal before going to bed. At the end of a long day of campaigning, Romney prepares for sleep by eating a bowl of cold cereal, preferably Honey Nut Cheerios, Honey Nut Chex or Crispix. Now tell me this guy is not boring. Actually the GOP cannot spell and they think cereal is spelled serial and we have endless debates and primaries to determine their candidate.

I filled up my wife’s car with midgrade at $4.55 a gallon and thank goodness we only have to do this every two weeks. The average American fills up once a week with about 14 gallons and there is no doubt that the higher gas price is making it harder for my fellow Americans to make ends meet. Hopefully the tunnel old Chu Chu is in is perfectly straight and very long so his ends do not meet and we do not get stuck with him for four more years. OK so what was good this past week? The best news for me was that the Fisker that Consumer Reports bought for testing actually died during the test and could not get restarted. Click on the link below. Of course the Clinton News Network (CNN) did not highlight this as Al Gore is a big time investor in Fisker. I just guess in an election year there is Bad Karma everywhere including on the Consumer Reports test track. As for me my Karma will never ride over my Dogma. I do love my dog that is a pure bred Shih-Tzu who understands all the laws of motion when we go on a walk.

Tuesday, March 6, 2012

An idiot explains physics

Watch this link to see an idiot explain physics

The moron states “the hummer is not what is wrong with the vehicle, it is the engine, it is the technology, so what we have to change is not the cars, not the size of the car but the technology” I guess when you love your maid so much you can believe anything including that Sir Isaac Newton was wrong in stating that force is mass times acceleration.

If you want to now learn something watch this link

Friday, March 2, 2012

Leaves and Money Growing on Trees

The news on the green front gets worse each day. The laws of thermodynamics simply cannot be overcome by the Treasury of the United States and wealthy investors. The first casualty was the leading US solar PV company called First Solar. They were originally funded by the Walton family of Walmart fame. They produced terrible losses for the quarter and worst of all they have to replace many millions of dollars of poorly produced cells that were installed primarily in Europe a few years ago. Their technology does not use silicon or CIGS but uses cadmium telluride (CadTel). The debacle of the poorly fabricated cells could cost them a quarter of a billion dollars.

Another DOE funded PV company Abound Solar gave up on its production plans this week. This company also had thin film CadTel technology and was supposed to have a big manufacturing operation in Indiana. Abound was to receive $400 million of Chu Chu’s funding but thankfully only drew down $70 million. This makes Abound a minor league player in losing the Fed’s money. The good news about Abound is that they took BP Alternative Energy’s money as well as the company that brings oil to American shores was an equity investor. Perhaps Toxic Tony made the investment when he heard that Cadmium can be mighty toxic and Abound fit perfectly into BPs portfolio of being beyond petroleum. Abounds pitch to Chu Chu was that Cad Tel was the low cost path to PV cells and that First Solar would be sold out of capacity so the US needed a second player in Cad Tel PV technology. Of course the Chinese went wild with silicon based PV cells and Cad Tel got clobbered in the process.

OK enough about PV and the money lost in this industry. A 123 is now proposing a strategy to manufacture lithium ion batteries in a partnership with SAIC Motors in China under an increased collaboration. They will report losses approaching $80.5 million this quarter on revenues of $40.4 million and will write down their equity investment in Fisker by $11.6 million. But wait Chu Chu gave A 123 $249 million to build a plant in Michigan for high paying manufacturing jobs and now they will have closer collaboration and partnership with SAIC China’s leading automobile company. Tell me is Chu Chu completely off his tracks or is he a Chinese spy? But wait Justin Bieber turned 18 and received a Fisker Karma as a birthday gift from this manager and a friend. Yeah Lenny The Crapio and Just Born Bieber each now own Karmas that were built in Finland and needed $169.3 million of DOE money for US engineering. Fisker will likely not sell more than 1,000 Karmas before they go belly up so actually the US DOE gave the 18 year old singing wonder a $169,000 gift for his birthday which is more than the $100k his two buddies shelled out. Fisker is Al Gore’s child and like John Edwards, Alaric The Second will deny paternity of the baby. GM announced today they will temporarily close the Volt factory for 5 weeks and put over 1,300 workers on furlough while they work off excess inventory of 150 days of the wonder plug in. At least Volt sales were 1,023 units for the month of February far above the 478 Nissan Leaves that sold in the US last month. I wonder if a group of Japanese workers will suffer the same fate of being furloughed due to the buildup of Leaves on the ground. But wait it is spring and not fall and leaves like money from the DOE will grow on trees.