Road Runner

SunPower: Accounting Mistakes Could Lead to Financial Restatement

Another thing. You make it sound like this accounting issue is a permanent thing - like SunPower is headed the way of AOL. At worse, this could turn out to be the tip of the iceberg for other accounting issues that could mean that SunPower is a much less profitable company than they led us to believe. Even in this worst case scenario, SunPower will still be one of the powerhouse solar companies. They will still have the best product on the market with a well established, strong distribution network. They are not going away.


On Nov 18 10:11 AM Fred W wrote:

> Ever try to do a deal with SunPower in 2007-8??
> If you did, and you weren't a Fortune 500, you got the shaft. Generally
> SunPower is run by opportunists with little regard for ethics--even
> SPWR's public relations people were openly arrogant at functions--even
> ones as low key as the 2007 Solar Decathlon.
> Beyond this, SPWR made strong arming installers/integrators part
> of its business model.
> You made a lot of enemies while on top SPWR...many us are enjoying
> your fall.

SunPower: Accounting Mistakes Could Lead to Financial Restatement

You make SunPower sound like a good company to invest in. I hate working with tough, ruthless management. But, I like investing with them.


On Nov 18 10:11 AM Fred W wrote:
> Ever try to do a deal with SunPower in 2007-8??
> If you did, and you weren't a Fortune 500, you got the shaft. Generally
> SunPower is run by opportunists with little regard for ethics--even
> SPWR's public relations people were openly arrogant at functions--even
> ones as low key as the 2007 Solar Decathlon.
> Beyond this, SPWR made strong arming installers/integrators part
> of its business model.
> You made a lot of enemies while on top SPWR...many us are enjoying
> your fall.

Accounting Irregularities Eclipse SunPower

What are/were the accounting irregularities at Exxon?


On Nov 17 12:49 PM bobbybutte wrote:

> As a former accountant who has become financially independent solely
> from allocating capital let me add a few things
>
> Dont EVER get involved with a company that has or HAD any accounting
> irregularties
>
> AIG EXXON jackson hewitt cendantjust to name a few were disasters
>
>
> You can never get another reputation

Accounting Irregularities Eclipse SunPower

It looks like SunPower's stock price (SPWRA) is heading for the toilet, like maybe below $18 a share. Though I'm still a big believer in SunPower, I can’t recommend this stock at any price until this accounting issue is fully explained, and management asserts that there are no other accounting issues.

Accounting issues are often an indication of much deeper issues. But, I find it very hard to believe that SunPower has deeper issues because this is a real company with a real high-quality product in a fast growing market. Their books make sense, though some of the numbers may be off by up to 20%.

But, even though I believe the stock below $22 is a very good price, I just can’t ignore accounting issues and recommend it.

Cash for Clunkers: A Man-Made Disaster

William,

You sound like the Hoover administration after the crash of 1929. They implemented the fiscal and monetary constraints that should have been in place to prevent the 1929 crash. This fiscal and monetary tightening after the crash made the Great Depression much worse.

You are like so many people who don't understand economics. You think there is a “one size fits all” solution to every economic situation. There is not. The economic tools to recover from a deep recession are the exact opposite of the economic tools to prevent, or at least dampen, a coming asset-bubble induced recession. Timing is everything.

It’s just like driving down a road – sometimes you adjust the steering wheel left and sometimes you adjust the steering wheel right. Your focus is not on the act of turning the steering wheel – it is on going down the middle of the road.


On Nov 16 01:14 PM William Legrand wrote:

> The reason we are in this financial mess is because of free-flowing
> credit, subsequent market bubbles, stagnant wage growth, and near-zero
> consumer savings. Now the USG solution is a return to free-flowing
> credit and artificially low prices thanks to huge taxpayer subsidies,
> all while the average consumer remains knee deep in high-interest
> debt, little or no savings, no wage growth (if not wage decline),
> and imminent risk of unemployment. Yep, "brilliant" move.

Cash for Clunkers: A Man-Made Disaster

US Business Cycles:
(from National Bureau of Economic Research)
Years: Pcnt Contraction Months
from Peak Between
to Bottom: Downturns:
1854-1919 (16 cycles) 22 48
1919-1945 (6 cycles) 18 53
1945-2001 (10 cycles) 10 67

Notice how the average depth of the downturns has dropped from 22 percent during 1854 thru 1919 (small, laissez faire government), to 10 percent during 1945 through 2001 (larger and more activist government). The time between downturns has also increased from 48 months to 67 months. This shows how bigger government has greatly dampened the business cycle. Data from www.nber.org/cycles.html for the US economy.

A larger, more activist government does not prevent business cycles, it only dampens them. You are trying to put words in my mouth by saying "High government spending and boom and bust". What I am saying is that this banking crisis would have turned into a multi year depression if it wasn't for the high government spending.

Also, you said "the economic theory you discuss has been the determining the economic policy that led the world into this mess". We have not been living under the economic theory that I discuss. The US government has rolled back many of the protections that were put in place after the Great Depression, such as glass-steagall which separated investment banking from commercial banking.

Also, left unregulated was the credit default swap market. This is the huge market that created the domino-effect collapse of AIG and other banks after Lehman Brothers went under. The credit default swap market allowed betting on the failure of institution, etc. without any relationship with the any relationship to that institution. It was pure gambling. This type of off-market betting was made illegal after the Great Depression. The credit default market should become regulated and visible on an exchange. Another lesson from the Great Depression that was ignored in the lead up to this financial crisis.

Your said, “As a final note, you have not mentioned whether you would accept the garbage compactor at the end of the production line.”. Yes I did answer this question. Wasteful, stimulus-oriented production is good during a severe economic crisis, like now, but is bad during a normal economy that is not dangling on the edge of a deflationary death-spiral depression. Cash for Clunkers in 2010 would be economically dumb because the crisis will be over by then.

Note that I was for bailing out US auto manufactures during this crisis in order to keep people employed. I see Cash for Clunkers as part of this bail-out. But, starting in the second half of 2010, the government should let them fail if they need more money.


On Nov 15 02:10 PM Cynicus Economicus wrote:
> <img class="authors_reply" src="static.seekingalpha.co...">
>
>
> Roadrunner: You say:
>
> " A large private sector and a small public sector creates regular
> and large boom and bust cycles (study the economy of the 1800s through
> the Great Depression that was full booms and busts)"
>
> Take a look at the UK. High government spending and boom and bust.
> Gordon Brown promised no more boom and bust, even as he increased
> the government's share of spending. The UK is now facing a fiscal
> crisis. I am not so sure that 'the solid economic theory' you discuss
> is so solid. Furthermore, the economic theory you discuss has been
> the determining the economic policy that led the world into this
> mess. Perhaps it is time to revise those text books?
>
> As a final note, you have not mentioned whether you would accept
> the garbage compactor at the end of the production line.

Cash for Clunkers: A Man-Made Disaster

The author said,
>In some ways it is an identical process to running a
>production line with a garbage compactor at the end of
>the production line. As each unit comes off the production
>line, the compactor simply crushes the item. The result
>of such a measure would be that the demand for the item
>might never be met, and the production line would be kept
>endlessly busy. Output would be maintained, GDP figures
>would be positive, and the economy would apparently be
>doing well as the result of this ongoing activity.


But, this is what has been happening to a large part in the private sector for the last 5 years. We have greatly overproduced housing in the US in the last 5 years. But, this extra housing, along with the fact that much of it is expensive and oversized, is a waste of resources just like your imaginary factory that in the final step destroys the product it just created. Much of the housing set idle during this recession, and some of it (even new houses) was bulldozed by the banks because it was more expensive to maintain them than to destroy them.

And, allowing so much money to go to the wealthy in the last several years (thanks to Bush tax cuts which, thankfully, will be rolled back at the end of 2010) leads the wealthy to buy extra houses, to buy multiple expensive vehicles, and to take expensive vacations. These purchases may employ people, but they have no long term economic growth value. From an economic standpoint, this is just as wasteful as your factory that destroys its product in the last stage. These purchases are just “welfare” for the working class.

It’s easier to visualize how a factory that destroys its product in the final stage is a waste than to visualize how a rich person’s third house, that sits idle most of the time, is a waste. That is why the conservative cult gets so much traction among its believers when it rips on government for being so wasteful and praises the private sector for being so efficient. These believers are not thinking through the true economic value of different products. They are only having a naïve, emotional, knee-jerk reaction to the “sound” of issues that is beat into their heads by the conservative cult leadership.

Solid economic theory paints a different picture that is more of a balance between the private and public sectors. The free-market private sector often “breaks down”. The private sector will not take big long-term risks as in developing basic technology or creating infrastructure (like our current electric grid which is in desperate need of upgrade). The private sector will “cherry pick” customers as with insurance leaving the most needy and elderly without insurance. A large private sector and a small public sector creates regular and large boom and bust cycles (study the economy of the 1800s through the Great Depression that was full booms and busts). The private sector will stymie innovation through uncompetitive actions via monopolies, back-room price-fixing agreements, etc. The private sector is not concerned about the “external costs” of some products like pollution from burning fossil fuels. The private sector leads to great inequities of wealth that limits the size of the educated, working middle class. The economic strength of a country is its middle class. The government program of the GI Bill after World War 2 created the educated middle class of the US, and created the great university system of this country that has led to countless numbers of inventions and innovations that made the US the economic powerhouse it is today.

The only counterbalance to these free market “break downs” is the public sector. Sure, the public sector (government) is not an efficient organization, but it is the only alternative.

Cash for Clunkers: A Man-Made Disaster

Cash for Clunkers would be a bad idea during normal economic times because it is a poor use of government money.

But, during this crisis it is a good idea because it causes people to spend money they would not normally spend. For every dollar of government stimulus spent on CashForClunkers, the economy gets some multiple of it in stimulus. It’s an amplified “bang for the buck”.

Anyone who does not understand why government needs to spend now to stimulate the economy to prevent it from spiraling down into a deflationary depression, does not understand economics. A deflation-driven self-reinforcing depression is one of the great "evils" in economics. It has to be studied to be appreciated and greatly feared.

Solar Market Declines for First Time Ever

Not all solar manufacturers are affected by the world glut in solar product. SunPower will be capacity for the first half of 2010.

Solar Market Declines for First Time Ever

Keep preaching it, jerrydd.

All this talk about the short term troubles of solar, and how solar company consolidation is coming (which is natural when an industry matures) is clouding the fact that the few big solar companies left will have a great market in the coming years.


On Nov 13 01:14 PM jerrydd wrote:

>
> Any solar company that can't sell $2/wt retail will die. Big subsidies
> are about over with just moderate ones that will remain.
>
> But there is a huge market out there in home units. The Solar companies
> that go after that market with 1kw plug and play modules including
> panels, inverters and mountings at around $3-3.50/wt will make a
> fortune. Because no land, transmission line, overhead or stockholder
> cost and utilities doubling their costs, home/building units have
> paybacks in 35-40% of the time of solar/wind farms with pure savings
> after that.
>
> In many locations they will have 1500kwhrs/yr or about $225/yr per
> peak kw. After 30% tax credit it will pay off in 4 yrs or less, depending
> on site. Then higher profit for 15+ yrs after that from increased
> electric rates,/costs/savings/s... profit. This is about 20%/yr+
> investment profit. Hard to beat that on any investment.
>
> So invest in your own units rather than a company. A combo of well
> done solar/wind can give a nice income boost by selling the power
> with wind running about $1.5k/kw.

Oversupply Issues Plague Solar Manufacturers

MichaelAK, There is something else inaccurate about your statement. This article only points out how some of the weaker solar companies are closing US solar plants. But, the big, strong solar companies are planning on opening US manufacturing plants because the increase in US manufacturing cost is more than offset by lower shipping costs to their US customers. SunPower is one of these companies.

On Nov 06 05:20 PM MichaelAK wrote:

> So much for Green Tech Jobs even those are going overseas as a fast
> rate. We need corporate tax, regulator and labor laws reforms if
> we are ever going to rebuild our manufacturing base. Heck when the
> promise of the new Green Manufacturing Revolution goes overseas you
> have a domestic problem that needs fixing at the Macro Level to correct
> the inablances in cost.

Oversupply Issues Plague Solar Manufacturers

SunPower (SPWRA and SPWRB) does not have an oversupply problem. They will be capacity constrained for the first half of 2010 until new production comes online mid year.

Oversupply Issues Plague Solar Manufacturers

MichaelAK, You are missing a huge part of the labor in solar - the installation labor which is 35% plus of the price of an installed solar system. This work can not be outsourced.

Also, the US is still the number 1 manufacture in the world. The loss of US manufacturing has been far overstated. The news media loves to talk about job losses because it gets people to tune in.


On Nov 06 05:20 PM MichaelAK wrote:

> So much for Green Tech Jobs even those are going overseas as a fast
> rate. We need corporate tax, regulator and labor laws reforms if
> we are ever going to rebuild our manufacturing base. Heck when the
> promise of the new Green Manufacturing Revolution goes overseas you
> have a domestic problem that needs fixing at the Macro Level to correct
> the inablances in cost.

Motorola's Droid Comes in Peace - For Now

I don't trust Motorola to build a good phone. The Razor was all the rage a few years back, but I dumped mine after a week for an LG phone because the mic and speaker were poor, in my opinion.

Motorola is a poorly managed company, and has been that way for decades.

Ancestry.com: Finally, a Quality IPO

What? A123 Systems (AONE) was not a quality IPO?