While Hurricane Sandy and the election provided strong political cover for renewed talk about CO2 and climate, recent developments in weather and climate science have conspired to slow the push for significant action. Congressional hearings are uncovering doubt from all sides about how much warming CO2 may actually cause. And as there is ongoing research at CERN and other quarters eyeing cosmic rays as the primary culprit in climate change, governments are announcing their intention to reduce clean energy subsidies over time.

Yet, tens of billions of dollars have been poured into alternative energy schemes over the past few years, with some of those investments- A123, Solyndra, Ener1, Fisker, etc.- leading to failed companies. But that amount of money is bound to create some advancements, and as I suggested there would be in this article on solar, there are companies striving to compete based on cost-parity in

SEC filings the past couple days revealed that Peter Thiel, Facebook's (FB) key original investor, has sold most of his shares, and co-founder Dustin Moscovitz sold 450,000 shares in the past week. Business Insider recently published this excellent article that makes a solid case for continued downward pressure on the stock due to share lockup releases, billions in withholding taxes, and challenges with employees whose stock options are under water, and Thiel's selling upon release of lockups fit this prediction perfectly.

Factor in revenue stumbles in dealing with the transition to mobile and the continued migration of Facebook away from being the "cool" choice, and it's easy to make a case for Facebook following the downward path of many internet predecessors. But one factor to consider is this:

Mark Zuckerberg owns Facebook.

Not totally. He doesn't even own a majority, or control a majority of shares (although share structure

Global population continues its sprint towards 9 Billion people (currently around 6.8 Billion). Peak Oil is upon us. The technology of chaos- Kalishnikovs, shoulder fired anti-aircraft missiles, internet viruses- continues to spread ever wider. Meanwhile, developed nations are crushed by a mountain of public and private debt while their income-generating capacity has been damaged by a flood of low-cost competitors and local market overcapacity.

It is easy to be pessimistic about the future, about western companies, about western banks, even human civilization in general.

But the real story is this- while a minority of mankind has been stuck near status quo for forty years, a majority has made significant gains, especially in the past twenty years. The anemic growth rates (some even negative) in the West have been met by double-digit growth rates in China and strong growth rates in the rest of the developing world- even sub-Saharan Africa. Global

Home prices go up. That used to be conventional wisdom, until the Fed unleashed 18 straight rate hikes, inverting the yield curve such that house payments doubled for some people, a rush to sell was on, and the bubble burst - first in the US, then Europe (soon, China?). As trillions in wealth evaporated, so did spending.

But conditions are now converging for a housing rebirth:

1. Interest rates are at a historic low, but are likely bottoming out and could start to rise;

2. Scott Walker's victory shows that politicians can address employee cost and survive, which in addition to facilitating budget balancing could have the odd effect of allowing more hiring (and why should class sizes be going up, anyway?);

3. Inflation in China's developed coastal cities is reducing pressure to move work there from the US, and manufacturing is seeing solid growth, although competition will remain fierce

The Great Experiment of the last century was Capitalism/Free Enterprise vs. Communism/Totalitarianism. As the results came in in the form of obvious living standard differences - Japan vs. Red China, Western Europe vs. Eastern Europe, South Korea vs. North Korea, USA vs. USSR - the shackles of central planning were loosened and a couple billion workers have now been added to the global labor pool. In addition, the global labor price crashed.

To build on our economic lead (25% of GDP from 4% of global population), the US needed to adjust to this new reality by competing, which our largest corporations did. But since 2005/2006, when our economy was the envy of the world, political leaders have started moving us in the wrong direction- higher taxes for companies growing overseas (where the high growth markets are and will be for existing products), higher minimum wages, more power for unions, higher

As the leak continues and horror stories spread, BP's (BP) perceived worst-case liability for this ecological disaster appears to be moving towards $50 billion, beyond their $12 billion in cash reserves, plus $20 billion in one year's profits, raising the question of bankruptcy.

But could they really be that high in light of the rule of law - as opposed to the rule of kings (or bureacrats)?

Bear in mind that management's fiduciary responsibility is to shareholders. This means generating profits while obeying laws to avoid fines or loss of ability to conduct business within a jurisdiction (such as the US), and doing the "right thing" so as to avoid negative publicity and damage the brand. BP's initial statements about paying legitimate claims - and doing so to this point - are in line with that strategy. And they have already paid out more than the $75 million statutory limit

For all the talk of cronyism and peak oil, the single biggest factor driving economic activity has been the massive labor shock brought on by technology and the addition of a billion new workers to the global labor pool. After the fall of the Soviet bloc and opening of China, it took a decade of development before workers in Eastern Europe, China, and India could participate in providing labor to a global market, but they are providing it en masse now. This has had a few effects:

1. The promise of lower-cost workers who could receive better pay and emerge as new customers created massive support for NAFTA and WTO; These low cost workers allowed massive, integrated production facilities in Low Cost Countries (integration is much easier when you're so sure of your labor cost advantage that you know your factory will be competitive).
2. These large production facilities became attractive to

Barack Obama is defending his economic policies while reminding Americans that he inherited a $1.3 Trillion dollar deficit. Unemployment is slowing, yet high. Projected deficits are astronomical. The stock market is rallying. So - who is to blame?

Let's start by dividing economic performance into three time periods - the 2003-2007 boom period (as the stock market hit historic highs and official unemployment hit historic lows), the 2007-2009 bust period, and the 2009 onward recovery period. Now, remember this- the market is a leading indicator, pricing in projections of future economic performance. So, what did the market price in in these periods?

2003-2007: Lower interest rates, lower taxes, productivity improvements through technology, loose regulation, and globalization of all these leading to a larger, lower cost, labor pool.

2007-2009: Higher interest rates (as the Fed inverted the yield curve to combat "top-heavy, unsustainable" growth), higher taxes, more regulation, higher labor and

Pennsylvania governor Ed Rendell announced last week that Pennsylvania will triple its solar capacity with nearly $23 million in new grants and loans, including a 135 acre solar park to power 1450 homes, and a $1M grant towards a $5.1 million project to install a 695-kilowatt rooftop solar system on a ShopRite Supermarket to help preserve 283 jobs.

A recent commercial promised the entire US could be powered by a 100 mile by 100 mile swath of land in Nevada. But using the density of the Pennsylvania project as a guide, this area is understated by 45%. And there are dozens of stories about solar panel prices moving below $2/Watt - so why is the ShopRite system costing over $8/watt? And one last question - if electricity is going for $.02/kwh on the wholesale market, why is Pennsylvania spending $23 million, at what looks to be above market rates, to

A Reuters report yesterday focused on the trend more people working for free in this current job market. While the official unemployment rate nationwide approaches 9%, the unofficial unemployment rate is estimated at 20%. Teen unemployment above 24% is nearing record proportion.

As a black market in labor is developing (not to say anything of the uncompensated efforts of bloggers, gamers, and mySpace designers everywhere), it seems reasonable to question labor price controls - and how the solution will likely involve inflation and increase in equity prices.

Some 90% of economists agree that a minimum wage increases unemployment. Detroit increased its minimum wage in 2006, and its labor market has eroded significantly since then. Congress voted for an increase in the Federal minimum wage that goes into effect the end of this week - forward pricing this development has certainly not helped with job creation.

Higher unemployment and price

Nearly every day finds another article about solar technology and startups and their progress. $1/Watt used to be the Promised Land of production cost - and certainly a huge advance over the $300/Watt costs of the early 80s - yet First Solar (FSLR) has reportedly beat that mark. And Charlie Gay of Applied Solar has reportedly said, "The Moore's Law for solar is that as time goes by, things get thinner and still absorb light." Heady talk, indeed.

The progress, competitiveness, and challenge in solar technology is eerily similar to two high tech markets of the past 20 years: multi-chip modules (MCM) and optoelectronics. They all share the following similarities:

1. A new hope for breakthrough performance- MCMs for electronic density, optoelectronics for bandwidth, and solar for energy cost and supply;

2. Extensive investment by Venture Capitalists into startup companies with technology differentiators, as well as significant entry by established

A few months ago, I penned an article entitled Let's Just Say It, Print More Money. Some misunderstood me to be touting Keynesian stimulus, which couldn't be further from the truth. Rather, I was looking for an increased money supply to counter deflationary forces by raising the specter of inflation- and not only put a floor on stocks and other assets, but provide a stimulative effect.

For all the talk of Bernanke "printing money", the truth is that most of the money "printed" thus far has been fully sterilized- if you consider Treasuries to be high quality. Given the vast natural resources and manpower of the US and the government's power of taxation, it would be a very aggressive bet to assume default by the US government on its debt instruments. Nothing short of global Armageddon or bio-disaster will keep the US from fulfilling (or at least rolling over)

Cap and Trade has taken some severe hits these past few weeks as Democrats confront the reality that the American public currently places climate change well behind the economy. However, a meeting today of senior White House staff with U.S. Climate Action Partnership, or USCAP- whose members include GE, Duke Energy (DUK), and Caterpillar (CAT)- indicates this is not a dead issue.

The participants in the meeting, which reportedly included Rahm Emanuel and CEOs, apparently all agree that a cap and trade program be passed as soon as possible. The USCAP program also includes a feature at odds with President Obama's stated plan- free allowances as opposed to auctioned allowances. No wonder USCAP would like to see this plan passed as soon as possible.

The allowances would allow utilities and major corporations to implement energy savings (driven in large part by the expected higher cost of fossil fuels) and

The Segway/GM Puma was unveiled yesterday to much derision on CNBC, as anchor after anchor made fun and declared they'd never get in one. Unfortunately, they're overlooking the wisdom of the old saying, "anything worth doing is worth doing badly". While there are some problems with the initial prototype (no roof or crash protection gear), this is just the kind of effort that we should be looking for from our leading companies - addressing the problems of tomorrow.

Puma does address the following realities:

1. Rising energy prices;
2. An aging population that will increasingly need assistance getting around;
3. Increased urbanization and population density;
4. Product line extension of the Segway platform;
5. Excess capacity at GM;
6. Improving battery technology;
7. Increased acceptance of electric vehicles - and their quirks.

When the primary criticism of these smaller electric vehicles is their small size compared to "Hummers", perhaps it is time for the US

As details of the administration's housing rescue plan sneak out, the $50 billion dollars to be used to restructure mortgages seems a drop in the bucket compared to the $6.1 Trillion in home values lost since the peak of 2006. If spread out just amongst the 2.4 homes in foreclosure, this is a little over $20,000/home, but rumour has it this will apply to homes not yet in default.

Let's say this program ends up working out to around $10,000/home. For a typical home that was valued at $250,000, where the homeowner owed $200,000, and is now underwater and valued at $180,000, this doesn't make much difference, and on expensive homes, it's not even worth thinking about. It seems clear that to make much difference, this program will have to be concentrated on the lowest end of the market, the $100,000 and under homes that can be found en masse

Observers of this economic crisis are well aware of falling home prices impairing derivative values impairing bank balance sheets impairing lending capacity impairing economic activity- further impairing home prices. And home sales remain depressed as homeowners and bankers are loathe to sell at a loss. As Vikram Pandit stated before the House Financial Services Committee on Wednesday, you can always "sell a $100 bill for $1", but that would not be consistent with his duty to protect the interest of his shareholders.

This is reminiscent of the classic "chicken and egg" problem - which is first, recovered home prices/derivatives or recovered bank balance sheets/economy? The answer is the farmer, who must decide how many chickens he wants and plan appropriately. And the farmer, in this case, is Mr. Obama's Treasury Secretary Geithner, whose announcement Tuesday showed he has a way to go to come up with a plan. This

It is clear now that fiscal stimulus has not engendered a V-recovery and deflation is here in spades as money velocity and quantity plummet. Bankruptcies, defaults, and deleveraging are destroying money at an historic pace, perhaps as much as $12 trillion USD in the past 18 months, crashing prices for houses, oil, flat panel televisions, and falloff in purchases of labor, food, and clothing. Price cuts for non-commodities have been moderated as corporate managers cling to what little pricing power they have since they're unwilling to crash their wages. As our economy unwinds, we stare out the back window wondering what we can grow for food, and wonder what happened to Ben Bernanke's helicopter

When excess capacity is pandemic, and when half the planet is still living in near poverty- why isn't economy activity booming? Well, it was, but then the Fed increased interest rates 18 times. 18, stealing cash

As we see credit destroyed in historic amounts, and as we see false wealth revealed by the billions, it is clear that the boom period from 2003 to 2007 was fueled by an incredible expansion of capital. It's reminiscent of a poker game where, when more guys show up to play and the host has run out of chips, all kinds of IOUs, chits, and promises get pulled in to keep the game growing.

This effectively created a huge expansion in money and wealth (some of it, arguably, false). And as every amateur economist knows, vast expansions in money translate to inflation- right? Yet, inflation was very much in control in this decade- increasing only slightly from a minimum of 1.6% in 2002 to a maximum of 3.4% in 2005, and then lower in 2006 and 2007. Housing prices soared, but this was to be expected due to the 1997

As we start to understand this current financial mess, it is becoming clear that deflation, not inflation, is the trigger to the periodic meltdowns we have come to know and hate for the past 30 years. And, as we have learned, you can inflate your way out of recessions.

"Why solar?" you then ask. Because the Federal Reserve will learn its lesson this time. It will learn that when US GDP growth reaches 4%, and oil reaches $100+/barrel, putting the hard brakes on always causes serious angst, and increases inevitably lead to decreases- and don't forget, Fed Funds is currently at 1.5% and headed lower, so don't think the false lesson of "easy money" will be heeded anytime soon.

Rather, as a world in need clamors for continued growth, central banks around the world will cooperate to keep rates low. This will counter deflation in some assets - housing,