tedfoo

Raser Technologies: Financing, Dilution Continue to Be an Issue for Now

As an unfortunate shareholder of Raser, nursing a 60% loss, maybe I can add something. They are my speculative play in my portfolio from early this year. I've sold off everything else for profit a couple months ago, and now this is the only stock I own.

I'm waiting for something to happen with RZ, but it's only good at going down. I think if you have no position with them, you can wait to buy some, and I would suggest 70 cents may be a good entry point (provided it gets to 70cents without more bad news occurring). They must get their Thermo 1 power plant up to full 10 MW capacity by the end of the year. While this power plant will not bring them to profitability, it does prove they can build a functioning power plant with their unusual approach at geothermal. With the proof of concept plant, they will surely land power purchase agreements, where municipalities fund a large portion of the plant building up front in exchange for cheaper green power. It appears the the South Cal PPA is on board for a 40 MW project, but I suspect they're waiting for the proof of concept plant to prove itself before inking the deal. Raser has a ton of MW land they can develop, and as the article discusses they have no capital, and right now are short on investor faith after their Thermo 1 debacle. Again this is why it is critical Thermo 1 get to 10 MW if they wish to stay in business.

Why haven't I sold? Well there's another half of the Raser business which could be the home run ball and come out of the blue. They also developed/own an electric motor, which is very powerful and has the ability to be used in large vehicles (trucks, SUVs, military). Their proof of concept - the 100 mpg hybrid hummer has been successful. They have yet to convert this motor into revenue, and it's largely been forgotten. I find it very interesting that hummer now being owned by China has numerous news articles talking about developing an electric hummer. Hummer ceo on fox business news said they were in extensive talks with an unnamed electric powertrain company about making the hummer a hybrid. Raser is desperate to sell this motor technology or license it out at bargain prices, and I think the new China owners are desperate to find a niche in the burgeoning electric hybrid sector with a truck. Any sort of revenue stream coming from the motor technology business would turn this company and the share price around in a heartbeat. It's a long shot, but I'm not going to sell for a loss now. What are lottery tickets for anyway?

Wary of the New Gold Rush

I know we're not in a gold bubble now. I see 5 articles this morning telling me we are in a gold bubble. I'm told by many investors that gold is going to crash. This is certainly good news. Keep it coming guys, drag some retail short top pickers in with your bedlam.

I'm an amateur technical analysis guy, but I see nothing but a healthy chart. Gold is screaming north because of a year of consolidation and now a breakout has occurred. Sure a down move may occur, but it won't be because of a popping bubble, it will be a healthy correction. That's something stock market hasn't had since March. And you're telling me it's gold, not stocks, I need to be wary of?

Why China Still Loves Gold, Silver

I just had a thought. Maybe others have had it too. What if China is attempting to corner the gold market? Much the same way the Hunt brothers did the silver market in the early 80s.

The international community says China doesn't have a "safe" currency... so instead they decide to put and promote their citizens excess savings into gold. Over the course of a few years, with Chinese government buying, they create a gold rush. While every other government is short selling gold to keep it down, China government whittles away and scoops it up. As soon as the international community realizes China has all the gold, presto, instant buying panic and the price soars. Meanwhile, all of China's wealthy citizens (which is a small %) that have been buying gold at their government's insistence, become very wealthy. China suddenly has created vast amounts of internal wealth in which to have their citizens buy their own manufactured products. A larger upper and middle class that would promote a healthy economy. Of course this idea assumes that the Chinese are smart enough or big-picture oriented enough to enact this plan. That's a lot of tin foil hat wearing, and I'm not so sure. But it's a thought.

The Bubble in Gold Debate

I think it is human nature to use the past to forecast the future. When someone personally experiences a good or bad event, they will remember and try to replicate or prevent the same event in the future by using past knowledge. This applies to all aspects of life, whether it's a simple or complex system we are trying to forecast. The problem is that complex systems like the economy or stock market are very difficult to forecast, and what we remember about them in the past may not ever be a good forecasting tool.

What I see now is a find-the-next-bubble mania. A bubble of calling the next bubble if you will. Over the last decade we've witnessed a dot com bubble, a housing bubble, a stock market bubble, both of which have hurt many people personally and deeply. And now they're extra cautious and out to find every "bubble" before it gets them again. Over the last year I've heard just about every asset class called a bubble by someone: treasuries, dollars, gold, stocks; you name it. Sorry, I don't see any bubbles, simply cause everyone is looking for them now.

So I strongly reject the notion that gold is a bubble now just because it is the only asset class that has a +300% gain over the last decade. The next bubble will show up when no one is looking for it.

Why Gold Could Hit $1,300 This Year

Sigh. The head and shoulder and it's inverse are trend reversal patterns. This chart just looks like a head and shoulder...a false positive if you will. This "inverse head and shoulder" is not a trend reversal or a signal with a price target because gold hasn't been going down, it's been going up.

If anything your chart is telling you that there is an ascending triangle with resistance at $1000. Consolidation has been taking place and gold is still poised to pop provided it can break the $1000 decisively. End result is the same, but don't cheapen your article with fuzzy technical analysis.

Why Is Deflation Scary?

I agree with your assessment. It's nothing more than a scare. Obviously, the deflation we experienced in the 30s was very severe, and thus most people now equate deflation to the great depression. However, this is misplaced fear. What we should be scared of is a monetary crisis. Because hyperinflation is pretty terrifying too - nothing like losing your earning power or savings in the blink of an eye. Maybe we should try to add a prefix, and say that "hyperdeflation" is what we should be scared of...not controlled or "reasonable" deflation.

As a member of the middle class, I don't see the problem with a little deflation here and there. I like it when all that responsible saving I did the past decade makes the cash sitting in my bank account (or in my mattress) increase in value.

But alas. We must ask, why are we told that all deflation is bad? Cause deflation discourages the flow of money. Without money velocity, the free money that the banks make from shoveling debt back and forth is no longer feasible or profitable. So the finance industry must ensure at all costs deflation never occurs - or they won't have jobs. If investors weren't forced to find a place to park their money at all times (either stocks, bonds, treasuries, commodities, etc) and cash was ALWAYS king - would we even have a finance "industry"? Of course not. Deflation is merely a victim of a smear campaign organized by the controllers of our fiat money.

El Niño: Ready to Wreak Havoc This Winter?

Since my day job is an operational meteorologist, I'll offer my insight to anyone willing to read these few sentences.

This El Nino cycle is expected after the recent episode of La Nina, the counterpart to El Nino, but much less publicized. This is a perfectly normal cycle that has been documented by weather instruments for the last 100 years, and likely been occurring for several thousand years before it. Yes El Nino can cause a shift in a weather pattern in some places to warmer-drier-colder-we... seasons, but the correlations are fairly weak for the majority of the hemisphere.

I've had a look at the computer model ensemble data and have come to the conclusion that this will not be a strong event, or we would have seen better signals by now. The 97-98 event was especially strong, but overhyped 100 fold by the media after California had been hit by a series of winter storms. Thereafter every flood, drought, fire, locust swarm, tornado, and crying baby around the world was blamed on El Nino.

The author seems to suffer from the same media illusion that El Nino is a bad "storm" only to bring chaos where ever it goes. El Nino is not a storm, nor can it ever be blamed for a bad storm or weather event.

If you're expecting to play the El Nino into your investment arsenal, consider yourself warned. We've had 3 weak to moderate El Nino events since 97-98, and I'll bet you didn't even know it. Where was the chaos then?

Hyper Inflation in the Confusion Market

"Now we have entered into a period where as long as relative money magic is applied, all will be well? If this is so, then cannot every country simply print up some amount of money (relative to their monetary bases), use this new money to retire debt (debt deflation), and then all can go on as if this whole episode never happened?"

Yep, and that's been the game plan for many months now, and will continue to be the game plan.

I share your confusion on the inflation and deflation debate, and I have wondered if I was bordering on bio-polar disorder going back and forth between camps. I settled on a camp now, and I'll explain my logic.

I liken the every-country-printing... debate to rig the system to a simple analogy from college. In my technical classes after a long night of group studying sometimes our group came to the conclusion that if everyone in the class (of 15 or 20) did bad on the test on purpose the prof would be forced to curve everyone's grade. We wouldn't have to understand the material, nor would we be punished with a bad grade. Of course, this is only good in theory, because all it took would be one student who was advantaged (and did understand the material) to say they'd go along with the plan and on test day sabotage everyone to blow the curve out of the water.

So I see the same thing happening today. Everyone with a fiat currency and a motive to keep the values of those fiat currencies in a steady state has got together to rig the economic system. So I ask is there a country or economy that can and wants to "blow the curve"?

I say yes. Any economy that still operates on a gold standard or uses gold as currency is unable to "print" more money. They can't go along with this plan if they even wanted to. Now these gold economies are pretty anemic, but think India and the middle east where gold is still used as currency. I think we will still see gold try to rise to its "real' value relative to all the fiat currencies around it.

But this real value has to find it's way out of those economies and be exchanged with fiat currencies in order to "express" it's value in the fiat currency wold. Will that happen? I don't know, but I believe that the economic system can't be rigged forever and it will find it's true value. I was anti-gold 6 months ago and even laughed and pointed at gold bugs, but now I've taken a position. We'll see.

Among the many reasons for the rush to move a cap-and-trade system through Congress: a growing shift in the global warming tide of opinion.

I doubt this is the reason anything is getting pushed through in a hurry. Most Americans believe what they are told: that global warming is a certainty. Most politicians believe what they are told. So who is doing the telling? I don't even know anymore, and I'm worried some of it's just rumors now. Yes, there's been a lot of research on the subject saying it is happening, and some saying it's not.

As a meteorologist, I think I have an understanding of the subject far more than a politician like Al Gore or the average citizen does. So what's my stance on the subject...I can tell you there are three things I can say with absolute certainty just based on all the stuff I had to study in college that had nothing to do with this geopolitical debate.

1) The climate of the Earth has changed over and over again during the past 100 million years, and humans had nothing to do with that.
2) The Earth's atmosphere is an incredibly, incredibly complex system which meteorologists don't fully understand to this day.
3) Humans are terrible at predicting the future.

So my stance on anthropogenic global warming? I'm agnostic. The only thing that I believe is that we don't know for sure. And it makes me so mad to see the science of climatology being wielded by politicians screaming doomsday to accomplish an agenda.

I don't believe that humans should treat their atmosphere as a free dumping ground for whatever they chose. I don't believe that's ethical, and I'll concede there may be some danger in doing so. But please don't insult the science with your outrageous fantasy claims by pretending YOU know the answer cause you read a paper on the subject. NOBODY KNOWS THE ANSWER.

Telltale Signs That a Significant Correction Isn't Imminent

The stock market is no longer our economic barometer. It's become the pressure gauge on a pump, only there to show us only how much hot air we've pumped in.

Why I'm Starting to Fear Inflation

"The big test is: can the authorities bite the bullet and raise interest rates with unemployment still on the increase? If not, prepare yourself for some serious inflation and bubble-mania."

The short answer: No.

I believe the Fed knows that the only way to get out of this economic debacle in a politically popular manner is to inflate. The authorities are much more committed to getting banks healthy than protecting what true wealth remains. Old debt will be eaten off the balance sheets of lending institutions, and profit margins on lending grow higher as they borrow at 0% and charge whatever rate treasuries decide to rocket to.

Meanwhile, it will be the silent destroyer of middle class wealth, and the key is that it will be silent. Sure we will all notice higher gas (but we'll blame that on the Arabs and evil oil companies). But our 401ks and home values will appear to be going up. Yet it will be less than the rate of inflation, and most will not take notice.

On the surface, inflation is win-win all around. Is this healthy for the economy? Long term, absolutely not. We'll be back to deal with the next bubble crisis soon enough. We are a culture of instant gratification, the "buy now, pay later" generation. Can we really expect fiscal policy of our elected leaders to reflect otherwise?

Commodities' Best Month Since 1974 - Is This Supposed to Be Good News?

Why is nobody talking about the negative implications of high commodity prices on the US economy? (Don't answer that it's a rhetorical question)

Most notably high gasoline will be back to kick the American consumer while they're already down. The dollar is weaker and certainly we will be looking at commodity inflation. But last I checked, employers don't give cost of living wage increases when unemployment is at 10%. The unemployed will gladly work your job for less if you're not happy about your compensation.

So the spending power of the American consumer will continue to decline. Is that a green shoot?

Bernanke Has Lost Control

A fantastic analysis! Thank you. You stole the words out of my mouth.

And in fantasy land every American should understand that this is the root of the problem. Then we could unite together to fix this and own up to our decade long binge on easy credit and debt. Instead we will continue our charade of blaming the "other" political party. That will accomplish nothing, and for that we are to blame.

Because it doesn't matter who is in charge of the fed or the oval office. If it wasn't BB, would the approach and outcome be any different? Monetary policy has gotten too political, and it only is getting worse. The political powers that be know that a true economic and fiscal solution to this problem will be hugely unpopular and cost them their jobs and their party control of the government. Only a true patriot would be in favor of making those unselfish decisions.

Our policitcal solution for a souring economy for the last 20+ years is one of the same and it will not change: Kick the can down the road - then hope and pray it blows up on someone else's watch. So here we are now, another crisis. Are we going to be able to kick it just one more time? The performance of the stock market lately says we already have.

Ten Year Treasury in the Woodshed. Time for a Major QE Overhaul?

Either way, I don't believe the average retail investor grasps how terrible the bond market news is for the overall economy.

Don't forget this economy initially headed south because of the popping of the housing bubble and all it's leveraged derivatives. The economic recovery, as I see it, is completely dependent on the financial health of the nations lending institutions, and they are dependent on a rapid resolution (read reflation) of the housing market. It seems in our green shoot parade of consumer confidence and less worse job losses we lost track of our original problem that has yet to be remedied.

Yesterday's treasury action, even with the fed target rate at 0%, is going to send mortgage rates ever higher. I saw one report that 30 year fixed already jumped to 5.2%. We've effectively turned off the refinancing cash cow that was providing banks some badly needed capital, and are quickly making it more difficult for the avearge person to buy/sell their house regardless of how "cheap" things are now. High rates will only further feedback into the housing market and I just see no end until the entire financial and housing part of our economy is in absolute shambles. Even worse, there's nothing the fed can do now. Another round of QE may temporarily combat the problem, but it's really nothing more than spitting into the ocean for the long term notes. I think we're screwed.

Dollar Chart Tells a Much Different Story than Pundits Do

Geez. I have been a bear since late April, but honestly I believed the threat of deflation was won by the printing presses at the Fed. Watching the dollar tank today all while the stock market dives is a bit concerning for our broader economic picture.

Oil's recent run up was based on perceived inflation. However, there's so much supply stuffed in every nook and cranny, I wonder if those prices will collapse once we figure out that demand is not there. Look at what nat gas did today, a much better real-time indicator of energy demand.

At least the last stock market crash in the fall was coupled with the return of the strong dollar. I don't think we're going to be so lucky this time around. Check out the treasuries getting hammered today too.

Is our last line of defense gold? If gold doesn't keep up with the falling dollar, does this mean we're staring back at a deflationary spiral?

Seriously, a bit concerned. Mr. Kim you are very right when you say "Unlike Keynesian economists believe, this is not a tactic that can be employed indefinitely without dire consequences". Is this the point in time where we are forced to own up to this problem and take our medicine?