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Freakonomics' Latest Adds Little to the Energy Debate

Great comment by most of you.

Most of you have made some excellent points. However,I'm surprised no one talked about CONSERVING ENERGY. By not not wasting so much of it in BUILDINGS. ALL of the energy produced by nuclear power plants (about 20%) and 1/4 of the coal fired plants wouldn't be needed IF SO MUCH WEREN'T WASTED. For example, homes, businesses, factories, schools, etc should be much better insulated and sealed, should have low-e glass and double or triple pane glass in windows. A national energy efficiency building code was proposed in the Carter years. Why was it never passed? (See final paragraph.)

Additionally, we should ban or tax incandescent light bulb sales and replace them with LEDs or at least CFLs. Also wasteful is using tank waterheaters instead of small on demand, point of use waterheaters. All buildings should have SOLAR water heaters or at least pre-heaters. They are cheap compared to photovoltaics (but I am a big supporter of PV.) No pools or spas should be heated any other way than solar (OK, also geothermal if available).

The biggest waste of electricity is the resistance generated heat in long power lines between the power plants and the end users. About 50% of what is generated is lost (according to National Geographic Mag). So locally generated energy is always more efficient, especially SOLAR, or in some localities, Wind.

In addition to TIDAL or RIVER currents as a source of non-polluting power. Florida Atlantic Univ. scientists estimate the Gulf Stream, right off shore of FL, GA, and SC, could supply most of the electric power needs of those states. Importantly, TIDAL power can be generated very close to the end users in the big coastal cities.

Finally, I believe the biggest reason the building insulation as well as solar and wind tax credits started in '70s were eleminated by the Repubican administrations that followed, is that once a citizen has an energy efficient home powered by solar or wind, he has been freed from big power and energy companies. Large scale adoption of alternative and locally generated energy would seriously cut profits for big companies (and save individual citizens lots of dollars). Of course, citizens don't make big campaign contibutions and big companies do. Politicians want to get re-elected. Now you see why very little has been done to solve the energy problems we all face.

What Did the Ratings Agencies Know About AIG?

They rated the CDO's as AAA because if they didn't, the J.P. Morgans, etc would go to another rating agency. They were only compensated for the stuff the were asked to rate. The crooks on Wall St. wouldn't bring you anymore business unless you rated their crap as AAA. As long as there was big money to be made, they were going to cash in, whether it was dishonest or not.

Winter's Coming for the Boomers: Part 2

Isn't the real problem overpopulation? I believe it is. Unfortunately, even though it's a problem that should be simple to solve, we probably won't. That's because of most of the world's peoples beliefs in religion and/or cultural traditions. I fear we probably are doomed to see starvation and disease do the job of controling the Earth's swelling population. The attendant suffering of that outcome is a far greater sin than birth control or even abortion (though I'm no fan of the latter personally).

If you look closely at China's success over the last 15 years you will see that it happened after the Government implemented their draconian but effective population control laws. It's too bad it can only be done in a totalitarian country because the results are spectacular. Compare the Chinese people's lives today with the 1980's when hundreds of millions were starving and there was no wealth or even a middle class. Compare their lives today with the people of Africa, the Middle East, or large parts of South America.

It is quite easy to have great faith in God (your choice) and still understand that we individually decide whether to have children or not.

No matter what your political leanings are, it's obvious that with a billion or two fewer people on the planet, peak oil, global warming, climate change, large scale extinctions of species, wars and starvation in the third world would be way smaller, or even nonexistant, problems!

Why Banks Prefer Foreclosures over Mortgage Modifications

Since the forclosures are usually done by the bank that is simply processing the loan (collecting the payments) and not the Parties that actually hold the mortgage and loan note. The forclosures are fraudulent attempts to "steal" title to the houses involved. In millions of cases the original loans were sold and resold sold again, then consolidated into MBS's and then sliced and diced into CDO's and sold again in "pieces parts". In such cases no one in the courtroom even knows who owns the mortgage loan note! The foreclosing banks can rarely present the neccessary documents to prove they have the right to make a claim on the houses. Even old Snidely Whiplash the cartoon banker waved around a document that said "Mortgage". If any of you know someone facing a foreclosurer proceeding, tell them to fight it. The Banks and their lawyers are commiting massive fraud on the homeowners and the Courts.

The Real Cause of Foreclosures: No Skin in the Game

Speaking of having "no skin in the game", isn't that true of most lenders from 2004-2006? After dispursing money to almost anybody willing to sign up for a mortgage, they sold it to Fanni, Freedy, Mers, or Wall Street money barrons who packaged the mortgages up into MBS packages, CDO's, etc. Thus, neither they nor the original lenders had any "skin in the game"! They didn't care if the mortgages ever got paid. By the way all of those bastards are still holding the dollars they made from those deals.Shouldn't they be held liable for the damage they did? They nearly crashed the entire world's financial system. It was probably the biggest fraud ever committed. Worse, the crime has gone unpunished. Worse yet, Bush, Paulson, and Bernanke gave the crooks even more of the citizen's money.

Of course now that prices are low, you can bet those individuals who made obscene profits selling and reselling all those bad loans and CDO's are in there (like vultures) picking up the bargains.

We are all witnesses to the most massive transfer (read robbery) of wealth from the Middle Classes the the very rich that has ever occured. Moreover, it doesn't end soon or even in our lifetimes. Sadly, our grandchildren will still be paying on the government debt incurred to pay for TARP.

Here in South Florida, most of the forclosured homes going for 60% or more off of 2006 prices are being bought with CASH! No Government programs needed.

Economic Decapitation via Cap and Trade

Excuse me Whidbey, but didn't the GOP also have an obligation to "do little or no harm" to the economy, the environment, and and the millions of people who are now finacially ruined because of the policicies of 2000 - 2006?

It is common knowlege that the economic of crisis of 2008 really began with the unleashing of Wall Street banker's unlimited greed and dishonesty; all made possible by "untangling regulations" that had previosly held them in check.

Economic Decapitation via Cap and Trade

I wish S A would stick to publishing info about investing instead of blathering political rhetoric.

What good will it do if people make more money now or in the next few years, if their children's and grandchildren's lives are a disaster because of our generation's greed, ignorance, and short- sightedness!

Six Ways to Cut Our Debt and Advance Obama's Agenda

How about a tax on foods, snacks, and drinks based on positive or negative food (health) value. Slap a tax on foods with high saturated fat, transfats, partially hydrogenated vegetable oils, high fructose corn syrup, high calorie count, high sugar content, low nutritional value, and high amounts of artificial color and/or flavors. Offset the tax by a reduction based on the amount of vitamins, minerals, protein and fiber the item has. Few shoppers would buy an $8.00 12 oz. bag of Cheese Dooldles or a $4.00 2 pack of Twinkies. On the other hand, fresh vegetables or low fat meats would be discounted so a rational eater's grocery bill might even be reduced from current amounts.

The income from the tax would go towards Medicare and Medicaid helping to slow the coming insolvency of those programs. Also helping, would be the improvement in the health of the population as people slowed the rate at which they have been poisoning themselves with junk food. The cost of the programs would go down if people were in general healthier. Those healthcare programs should also automatically exclude smokers and those who have no genetic or accidental cause for their fatness and/or poor cardiovascular fitness. Those are usually preventable conditions caused by poor lifestyle choices just like smoking, excessive drinking, or non-medical drug use. The general population of tax payers should not have to pay for the poor choices of others. Reductions in benefits could be on a scale graduated by the degree of excess fat or poor fitness. That way people would be rewarded in dollars for improvements in fitness and/or reductions in their fat to weight ratio.

I am looking forward to comments and additions or exceptions readers have.

Want Solar Panels? China Will Pick Up the Tab

No one mentioned that a solar system is typically waranteed for 20 years. It should last many more years w/ minimal maintenance. I wonder how much the cost of electricity will be in 20 or 30 years?

How many of you figure the "pay back" time for your car, etc.? After all many could take the bus. Also, how much per KWH would you value quiet electricity during a power failure? How much is it worth to know that you are part of the solution to global warming, instead of part of the problem?

Ip Blames Greenspan for Lack of Regulation

Many of the problems we've experienced actually started under Reagan and Bush I. They began the deregulation of financial companies and removal of walls separating Wall Street from Banks and Insurance companies. The icing on Wall Street's cake was really heaped on by the administration of George the second. We've experienced what happens when an almost religious effort at DEREGULATION, to the extreme of not enforcing existing regulations, gives greedy people a green light to abuse the system, and consequently, the economy and the citizens.

Many have written about the FED and it's previous chairman. However, I don't think the point has been as made that the real pupose of the FED IS TO CREATE INFLATION, which is a hidden tax on all of us. Inflation penalizes those who would save and rewards those who borrow and pay back with cheaper devalued dollars later. The other purpose of the FED is to feed the Boom and Bust Cycle. Remember the low interest rates of the late 90's and the easy money policy that led the so called "dot com" boom and bust? Why bust?... because the FED very suddenly cut off the money supply and raised rates faster than the economy could adjust. Result? An entire generation of stock market, IRA, and 401-k investors had their life savings decimated. How dare they try to move from the Middle Class into the ranks of the moderately wealthy. The same goes for all the uppity entrepeneurs of that period. Of course the very wealthy, who know the game, got out early so they could reinvest at the bottom of the cycle.

Next, many people were lured into the real estate boom and bust. Encouraged by the FED's excessively low rates of 2003-2006 and almost total lack of regulation, or even serious effort at enforcing existing regulations. AGAIN, The FED popped the bubbled it inflated. This time millions of home buyers were financially crushed. Their crime?... nothing more wrong than to buy a house at the wrong time or be taken in by preditory Mortgage Brokers and Bankers who used bogus appraisals to justify the inflated housing prices of the time. The real criminals are free and have kept their illgotten gains.
Now, many of those who have paid their bills their whole lives and were proud of excellent credit scores, are finding themselves owing up to100 or 200 thousand dollars more than their house is currently worth, even with a 20% down payment! Today many wealthy investors are coming to South Florida to scoop up foreclosed houses at 60% to 70% off the inflated 2006 prices. If the FED's goal is to set up massive tranfers of wealth away from the Middle Classes, then it is succeding superbly. Notice how they always seem to be tardy at stopping the downturns, so the cycles are amplified to the down side squeezing any stalwart or responsible types determined to hang on.
BTW, the unfortunatesand dead beats who took out the subprime loans were as often as not lured into houses they could not afford by the same unscrupulous lenders I mentioned before. Once they were foreclosed on, the Banks began dumping their houses on the market, thus driving prices down. That made more homeowners give up on their loans, get foreclosed on, and so on like a monstrous real estate snowball rolling down a very long and painful slope. The next wave of foreclosures will be the resonsible folks rolled over by the snowball. How does one justify paying back hundreds of thousands of dollars more than the house is worth to the very banks that were complicit in the creation of the problem? It will be nearly impossible for someone at the front of the baby boomer pack to recover from such a financial disaster. Especially if their credit has been destroyed.
Of course, once again there is a massive transfer of wealth away from the Middle Classes, insuring that they never are allowed to amass true wealth. Once again, the wealthiest portion of the population keeps getting richer! It's part of the plan! Remember that when you hear people whine about Obama's tax plan being a "redistribution of wealth". That's a sick joke and the majority of Americans are the butt of the joke.

If you would like to learn more about the FED and it's creation and practice, copy and paste this link into your browser,
seekingalpha.com/artic...
OR a longer and even more eye opening article at this link
philologos.org/bpr/fil...

End of the Recession in 2009?

Those that compare these times to the Great Depression, don't seem to remember to consider that The Congress and Hoover's administration did what most economists today consider to be the wrong things to fight a contraction. Consequently, they exacerbated a disasterous set of problems. Everyone knows the result.
Another difference is that In the 1929 - 1933 period the large economies of the world could be counted on one hand. Today we have a G20. Many countries that were European colonies or third world countries in 1929, today are wealthier and more productive than Weimar Germany in 1932. Today's world economy has much more depth, diversity and dispersion. It's also much more intertwined. Maybe unfortunately in the short run, but an eventual advantage.

Today 's problems would probably lead to an equally disasterous economy as 1933's, IF the same things were being done by today's governments. However, that is not at all the case. Also, it has always been true that it takes 6 to 9 months for just a FED rate cut to show results in a normal downturn. This is certainly an unprecedented downturn, but the response has been unprecedented and massive. Still, to expect quick positive results in the face such a complicated web of fear, failure, and financial corruption is foolish. When mountanous bubbles burst, involving every asset class, it takes a while to reach the valley floor. However, the responses of the governments and entrepeneurs of the world will keep us from sliding into the sea. BTW, we all know that the stock market moves according to where traders think earnings will be in 6 to 8 months. That suggests that most of us will still think our personal, community, and state economies are bad to rotten when the market rallies. Remember there's trillions of dollars waiting to be put to work. I don't think that latter was true in 1932.
All the discussions above regarding the continuing to rise in unemployment failed to mention that employment, being a trailing indicator, is usually the last thing to improve.
My belief is that this time residential and commercial real estate will be the last to show real strength.
Lastly, I have appreciated the excellent comments by so many of you. The Charts and interpretation the author shared were at worst still interesting. Also, those of you that have completely dismissed the author might consider the PHD that follows his name. Just a thought....

How GE Compares to Other Banks

I appreciate the analyses by the commenters above. However, I see GE as a financial and diversified industrial, green energy, energy consevation, and medical ETF of sorts. As such, does anyone have percentages on the earnings by the various divisions or industries?

If your stock portfolio included wind turbines, solar PV, fuel efficient jet engines and locomotives (rail), high tech meical devices, and general industrials but also one big money losing financial, most would say your sector selection was 5 out of 7 great for the economy ahead. The question remains, how much of a percentage are 5 excellent sectors compared to average ones and the bad one?

I hope someone can put numbers to this query.

Obama 'Shines' Natural Gas

This is an excellent article. I especially like the simple do-able list of Mandates.

Nakedjaybird - very good and well organized ideas

Andy1234 - Your comment on energy conservation I hope was in jest. Otherwise, it is an incredibly stupid comment ina discussion of solutions to our energy problems. However, I applaud you and others who recognize that all the energy shortages, polution problems, etc are actually population surpluses. The effectiveness of population control has been demonstrated in China. Obviously, their methods would prove next to impossible in any democratic country. Education might help but many religeous people would object.
As far as solar collectors and wildlife, could you possibly not have noticed that most collectors are the roofs of buildings?

The Deaths of birds from Colliding with wind turbines might be solved with some sort of sonic warning in a frequency range that birds hear but most humans wouldn't. Research is needed for sure.

Anyone - name calling, for example,"carbon loon" or "Enviro-crazies" etc. block many readers from considering your ideas. The same is true for names liberals have for ultra conservatives like Rush L.

Most of the energy "consumed" in this country is wasted. Wasted in inefficient power generation and transmission, deplorably inefficient buildings (in design, construction, operation, lack of insulation and weatherization) inefficient vehicle design, powering, fueling, and poor traffic handling. In a typical american car, 6/10th of a percent of the latent energy in a gallon of gas actually is used to move the driver to his destination. The rest is wasted in the inherent inefficiencies if internal combustion engines, drive trains, excessive vehicle weight, friction, aerodynamic drag, etc.
One of the many beauties of solar collectors on the roof of a building is that no electricity is lost in transmission before it's used. Most of the electricity generated in this country becomes heat energy lost to the atmosphere while overcoming resistance in the transmission lines. This is another reason we need better conductivity in the grid. BTW, American Superconductor (Nasdaq - AMSC) has been selling super- conductive cable for several years, but it is still VERY expensive. Of course, mass production would bring down the cost. (I own 30 shares.)

BTW, PVC panel prices are dropping fast this year after polysilicon prices fell and a massive ramp up in production ran into a credit crunch coupled with a global economic recession. Look for a 30% cost savings for buyers (plus another 30% Federal tax credit plus whatever your state provides)

One great sideline to eventually having millions of PHEVs and EVs not mentioned is that they could provide a source of stored electric power in their very large capacity bateries. Electric utility companies could provide special parking spaces in urban parking garages where they could hook up to the grid. When the grid has peak draws, the vehicle's batteries would help smooth out the supply to the grid. When the demand on the grid slackens the grid would recharge the batteries for free. Currently the peak demands are met by keeping gas fired power generation plants running during daytime. During lulls in demand on the grid the energy generated by these reserve power plants is wasted because there is no easy way to store it currently. Ideally, the utility company would cover the garage roof with solar collectors, therby freeing up more Nat Gas for transportaion.

Rarely mentioned is the most practical use of solar as a source for thermal energy to heat water (20% of a typical home's energy bill). All of the previously mentioned tax credits apply.
Homes can be designed using passive solar heating principles for almost no addtional cost, saving most of the energy currently used for space heating.
These ideas make even more sense for schools and commercial buildings that are used mostly during the daytime hours.
Intelligent building design can also drastically lower air conditioning needs without sacrificing comfort.
All of the energy savings I"ve mentioned would reduce the need for more power plants to charge batteries in PHEVs and EVs, free up Nat Gas for transportation use, thereby reducing the amount of oil imported from unfriendly countries.

Expect Continued Drops in Solar

Isn't it logcal that as ASP's come down, demand will go up? Since the cost of poly is dropping fast, won't that assuage the hurt to margin deterioration? Cheap solar is what the world has been waiting for!
Hey Solar Sam (Great name), why would you not want to see a temporary glut of cheap PV from China? Cost is what has been keeping most most would be buyers out of the market. Let's face it, 20 year pay back is not most peoples idea of good investment! If ASP's plummet, polysilicon prices fall, and gov't help continues, pay back could be cut in half or better. I believe demand will soar. Moreover, utility companies in the US are included in the Gov't subsidies as of 1/1/09. They don't have as much trouble borrowing money as most businesses or individuals.

Even though I own a nice chunk of First Solar stock, I believe the higher efficiency of Poly collectors will still make them the solar of choice for those with limited roof space. Also, compare P/E ratios, their Chinese competitors are selling at a fraction of the cost of our precious First Solar shares. Also, I believe the Chinese Government will simply pump in the money to support their solar companies through the rough spots. I wouldn't want to live under one, but dictatorships can act fast when they need to. With one party, there's little of the tedious public grandstanding and political wrangling we see in our congress. Of course the corruption there makes Ted Stevens look like a saint!

Looking Good: Genco in Particular, Shipping in General

I noticed that SBLK has about the same debt to equity ratio as DSX. They, like GNK, have all of their ships booked ahead, many at rates considerably higher than the BDI. I'd be interested in seeing opinions of other commenters, both positive and negative.