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Tricky

Tricky
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  • All options are on the table, insists Mark Gertler, an occasional research partner of Ben Bernanke. "(He) is a student of history and he is not going to be the central banker that lets financial markets melt down and the economy go into depression," he says, quickly dismissing thoughts that rising inflation, political pressure, or humility might tie the chairman's hands.  [View news story]
    This is one of the core problems with the Fed since Greenspan started -- a belief that any form of natural clearing is bad, and that they need to "just do something, anything". They believe it's better to try to artificially increase prices of assets and bail out losers, than to take the short term pain required to get things back into balance. Also, NONE of their equations and thinking gives a damn about savers.
    Aug 22, 2011. 08:21 AM | 1 Like Like |Link to Comment
  • Playing Liar's Poker With EVs, Lithium-Ion Batteries [View article]
    Forgive me if I misread or missed something. But it appears that the primary strike against EV is an assumption that the current mix of electricity generation (heavy on coal) stays the same. I wonder if the picture changes appreciably if that electricity production mix changes going forward?
    Aug 22, 2011. 08:13 AM | 1 Like Like |Link to Comment
  • Playing Liar's Poker With EVs, Lithium-Ion Batteries [View article]
    What is the new technology set to be released in the middle of next year that is going to increase the magnitude of energy density?
    Aug 21, 2011. 04:04 PM | Likes Like |Link to Comment
  • "The markets want to force us into doing certain things - and that we won't do," says Angela Merkel in an interview to be aired tonight. "Eurobonds are not the answer" to solving the current crisis ... "This is a hard and arduous path, which we will not be able to avoid by means of some magic bullet."  [View news story]
    That one deserves a "wow". What now, for Europe?
    Aug 21, 2011. 11:28 AM | 1 Like Like |Link to Comment
  • Playing Liar's Poker With EVs, Lithium-Ion Batteries [View article]
    John, I agree w/ you that we would certainly have a military and foreign policy even if oil were not an issue (countries have always competed for "scarce" and "valuable" "resources" and always will). But I DO think it's fair to say that every bit of the two Iraqi wars had everything to do with oil. And that number is measured in trillions. One can engage in much pleasurable thought exercise of how that kind of monetary resource would be better spent (or NOT spent), including a diversion of even a fraction to basic R&D on petroleum alternatives.

    This is usually the point where someone points out what a failure DoE has been. But DoE is really a nuclear weapons agency (>80% of its budget) that happens to dabble in energy, on the side.
    Aug 21, 2011. 11:27 AM | 2 Likes Like |Link to Comment
  • Playing Liar's Poker With EVs, Lithium-Ion Batteries [View article]
    I try hard to be intellectually honest about these things. And I have no dog in this fight. A couple of questions and observations:

    From an investment standpoint, I'm not sure there's ever been a time when any fuel type has been forced to "account for" its true lifecycle costs and effects on society (the most notable being oil never having to account for massive sections of the DoD budget to protect its supply security and other interests or coal's many negative effects).

    Because I'm too lazy to read thru that entire report (hey, at least I'm honest), can you summarize what the biggest drivers of these results are? Mining for rare earths? Assuming the same mix of electricity going forward? What are they assuming for price of crude?

    In a few articles you have made interesting observations re: chemistry not enjoying the same kinds of performance improvements as electronics. Wherefor art thou, John Galt?
    Aug 21, 2011. 09:14 AM | 6 Likes Like |Link to Comment
  • France eases its short sale ban as it may have been a direct contributor to yesterday's bloodbath in Europe. With the expiration of index futures contracts today, traders short those were concerned they wouldn't be able to roll them over since they included bank shares. Worried they could no longer hedge, they sold, and then sold some more.  [View news story]
    I never fail to be amazed by the power of The Law of Unintended Consequences
    Aug 19, 2011. 08:56 AM | 1 Like Like |Link to Comment
  • Italy gets behind the idea of a jointly issued euro bond as a "master solution" to the continent's debt crisis. But where's Germany on this? "I rule out euro bonds for as long as member states conduct their own financial policies," finmin Wolfgang Schaeuble tells Der Spiegel. Angela Merkel and Nicolas Sarkozy are to meet Tuesday amid calls for a fiscal union to go along with the monetary one.  [View news story]
    LOL. Yeah, I'm sure Italy is quite gung-ho to get bailed out by the German taxpayers. Almost as enthusiastic as the French are to have their banks bailed out by German taxpayers.
    Aug 13, 2011. 08:16 PM | 3 Likes Like |Link to Comment
  • The only folks who could challenge S&P analysts for being the dullest tools in the drawer (see $2T error) may be preparing to investigate the rating agency, as the Senate Banking Committee reportedly has begun probing S&P's decision to downgrade the U.S. credit rating. Deven Sharma, prepare for your perp walk.  [View news story]
    Haul them in front of the Senate, for what? Expressing an unpopular and inconvenient opinion about the USA's fiscal troubles? They are certainly allowed to express this opinion, even if it cost you money. They downgrade individual companies all the time, should the bondholders who lost money shriek at S&P?

    The CDO garbage is a different matter. Rated by a completely different division and set of analysts, by the way. Sure, they should be held to account for that stuff.
    Aug 8, 2011. 09:55 PM | 1 Like Like |Link to Comment
  • The only folks who could challenge S&P analysts for being the dullest tools in the drawer (see $2T error) may be preparing to investigate the rating agency, as the Senate Banking Committee reportedly has begun probing S&P's decision to downgrade the U.S. credit rating. Deven Sharma, prepare for your perp walk.  [View news story]
    Indeed "predictable". In fact (if I may be so bold) I actually DID predict it ;-)
    Aug 8, 2011. 07:03 PM | 2 Likes Like |Link to Comment
  • Forget the S&P downgrade, markets tonight may be chewing over a Der Spiegel story saying doubts are growing in the German government that Italy can be rescued, even if the bailout fund was tripled. Additionally, there are worries a move to guarantee all of Italy's €1.8T of sovereign debt might have markets beginning to question Germany's solvency.  [View news story]
    Well alright then, let's do some analysis. Italy's debt is approximately equal to 75% of German GDP. So the German populace is going to quietly sit by as their government guarantees Italy's debts, in order to keep its exporters happy. You're acting as if there is no price to bailing out Italy. It would be an enormous price.

    Oh, and if Germany pulls out, there is probably no EU to talk about any more.

    I have no idea how the German populace will act. But I did see what happened to Merkel's governing coalition in a few major regional elections, after the Greek bailout. So I guess we'll find out just how badly Germany wants to keep this Euro-experiment going.
    Aug 7, 2011. 12:57 PM | 1 Like Like |Link to Comment
  • Forget the S&P downgrade, markets tonight may be chewing over a Der Spiegel story saying doubts are growing in the German government that Italy can be rescued, even if the bailout fund was tripled. Additionally, there are worries a move to guarantee all of Italy's €1.8T of sovereign debt might have markets beginning to question Germany's solvency.  [View news story]
    Can't help but wonder if/when the German voters start a backlash. It's one thing to bail out Greece. But Italy? GNP figures

    Germany 3316B
    Italy 2051B
    Greece 305B

    Germany is going to bail out a country almost 62% its own size? OTOH, they may have no choice, given what their banks must be holding in Italian paper. Good heavens, what a mess.
    Aug 7, 2011. 09:35 AM | 3 Likes Like |Link to Comment
  • Italian prosecutors confirm an investigation of Moody's and S&P, saying recent moves by the agencies are a "failure" of judgement about Italy's finances. Investigators have seized documents from the offices of both firms, with 3 Moody's analysts and 1 S&P analyst being the focus of the probe.  [View news story]
    Italy must REALLY be worried if it is resorting to these kinds of intimidation tactics. No wonder it wants a more compliant Europe-based rating agency.
    Aug 4, 2011. 03:06 PM | 2 Likes Like |Link to Comment
  • House Majority Leader Eric Cantor says it's time for Americans to "come to grips with the fact that promises have been made that frankly are not going to be kept for many," and young people must "adjust" to a future with fewer entitlements. Straight talk for a change, or a betrayal?  [View news story]
    The other massive structural problem with SS is that it was set up as a pay-as-you-go financing (current workers fund the retirees) rather than a true retirement plan where my contributions fund my SS payouts.
    Aug 4, 2011. 08:50 AM | 2 Likes Like |Link to Comment
  • House Majority Leader Eric Cantor says it's time for Americans to "come to grips with the fact that promises have been made that frankly are not going to be kept for many," and young people must "adjust" to a future with fewer entitlements. Straight talk for a change, or a betrayal?  [View news story]
    The problem with social security is that it never got adjusted for life expectancy. Its purpose was to mitigate poverty in the last years of an American's life, not to ensure them decades of being economically unproductive.
    Aug 3, 2011. 07:11 PM | 4 Likes Like |Link to Comment
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