Wednesday, May 28, 2008

The Light At The End Of The Tunnel at Updown

Here's a great rundown of LDK and FSLR from Updown.com.

Found by Parabequ of Yahoo.

Saturday, May 24, 2008

Peak Oil on CNBC.

Robert Hirsch of the Hirsch Report.

Wednesday, May 21, 2008

Here's how I often spend my days... Battling in Livejournal.

The Livejournal Conservatism Community is always alot of fun. I was a bit more agressive this time around, because the particular original poster, Writerspleasure, is a particularly disagreeable individual. He appears to live in Britain, but seems to get maximum joy from convincing Americans that it would be a great idea to tear down their Government for Laissez-faire Capitalism.

Tuesday, May 20, 2008

Obama - 05/20/08 - Change.

"Change is an energy policy that doesn't rely on buddying up to the saudi royal family, and then begging them for oil*.


Change is an energy policy that puts a price on pollution and makes the oil companies invest their record profits in clean, renewable sources of energy, that will create millions of jobs, and leaves our children a safer planet."


-Obama 05/20/08

Market tanks, oil blamed. Time to ponder.

Stocks stumble on record oil, inflation worries


It's a day like this when investors and market watchers are reminded of the importance of affordable energy to their future. It's not a bad thing to be reminded of.

Oddly enough, Solar was mixed (See below).




A basic Reminder: when we think "Inflation," we must think "Energy Supply." When we think "Energy Supply," we must not just think "Oil," but also "Coal." Both of these primary sources of Energy are at risk of runaway prices. Therefore, when we think of either of these two forms of Fossil Energy, we must think of the "competition." This should lead us right to "Solar," "Wind," and "Geothermal." We need to stop thinking about Energy only in terms of "Burning Things."

Energy is Conserved, and energy from Fossils is ultimately the same as Energy from the Sun, or the Wind. Yes, the form is different, and the technology required to make use of the different forms of Energy are different, but given that one form of energy is increasing in scarcity, it is incumbent on those who have concern for the Economy to develop additional sources of available Energy. There is simply no choice in the matter. There is no Economy without Energy.

Sunday, May 18, 2008

Thinking Ahead - ASTI Solar.

Promotional Video on Ascent Tech, by Norsk Hydro


When you think thin film, think this: ASTI is integrating into building materials, and will be going up in locations that are impossible to serve with any of today's Silicon-based Tech.

Asti is moving into niche of their own, which is a powerful advantage in a rapidly developing market.

BTW: If you're looking for a brief on what ASTI is all about, here's an Investor's Presentation from last year. It's good stuff.

Thursday, May 15, 2008

TSL vs. STP.

Note that I haven't been paying too much attention to Trina since I was in it for awhile last year, but looking it over right now, I'd say it's sure looking good compared to STP (for earnings purposes, anyway).

Looking back on Q1 news, Trina shone, while Suntech Power looked to be running into obstacles. Plus, the recent Akeena Earnings may be in part reflected in STP's results as they are trading partners. I'm not sure of Trina's geographic distribution, if anyone's got it on hand, I'd love to see to compare.

I'm also pleased that Trina gave up on their poly plans, as they really didn't make sense so late in the game.

I don't own any of either one.

Monday, May 12, 2008

McCain on Wind... Wonk Room

From the Wonk Room.

Lots of Info on McCain's Failed Record on Wind Energy.

Saturday, May 10, 2008

New Nasdaq China Index!

Includes LDK, STP, YGE.

This will help to draw invesment over the long term.

See Components on Yahoo

Related Businessweek Article

This is great! LDK is now bundled up with some great Chinese US Listed Companies like BIDU and PTR.

Thursday, May 8, 2008

GUNTHER Portfolio: Timminco Limited: O Canada! Solar Grade Silicon, Eh? – Part 1

GUNTHER Portfolio: Timminco Limited: O Canada! Solar Grade Silicon, Eh? – Part 1


For those on Canadian Exchanges, check out Timminco. It's being sold by an LDK Short as Competition in Poly, and they do seem to have quite a good start in the business.

Saturday, May 3, 2008

Foreign Exchange and some Mental Strain.

I wrote this as an email to a coworker from Accounting. I'll post this in mostly unmodified form to this group, because I think it brings up some interesting issues. I'd love to hear your thoughts on the facts or theories behind the issue, or on my conclusions about the issue.


Some time ago, we talked about going over a balance sheet, so I could learn a little bit about how to read one.

Well, this is a doozy. It's the 20F yearly report for LDK Solar. Not particularly a good one for a beginner, so I'm just wondering if you can take a look at the following excerpt and think about it. If you can come up with a good way to understand it, I'd love to hear. Don't worry about the specific numbers. I'm thinking along the lines of trying to work out the relationship between stock price in US Dollars and the relative valuations of the Dollar, the RMB, and the Euro, where the RMB and Dollar are largely pegged, and the business assets are split between all three currencies.


Note: I think I'm starting to get it. I'm putting some notes at the bottom of this email.


From: http://www.sec.gov/Archives/edgar/data/1385424/000114554908000792/h02099e6vk.htm#118


Here's the Relevant Section:


-------------


ITEM 11. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK


Quantitative and Qualitative Disclosure about Market Risks

Foreign currency risk

Our financial statements are expressed in U.S. dollars but the functional currency of our principal operating subsidiaries, Jiangxi LDK Solar, Jiangxi LDK PV Silicon and Jiangxi LDK Polysilicon, is Renminbi. To the extent our principal PRC operating subsidiaries hold assets or liabilities denominated in foreign currencies, any appreciation of Renminbi against such foreign currencies denominated assets or depreciation of Renminbi against foreign currencies denominated liabilities could result in a charge to our income statement. See note (2)(c) to our audited consolidated financial statements for more information on foreign currency translations for our financial reporting purposes under Item 18 in this report.

A significant portion of our sales is denominated in Renminbi. Our costs and capital expenditures are largely denominated in U.S. dollars and euros. The Renminbi is not freely convertible into other currencies and conversion of the Renminbi into foreign currencies is subject to rules and regulations of foreign exchange control promulgated by the PRC government. In July 2005, the PRC government introduced a managed floating exchange rate system to

allow the Renminbi to fluctuate within a regulated band based on market supply and demand and by reference to a basket of foreign currencies. The PRC government has since made, and may in the future continue to make, further adjustments to its exchange rate system.

Generally, appreciation of Renminbi against U.S. dollars and euro will result in foreign exchange losses for monetary assets denominated in U.S. dollars and euro and result in foreign exchange gains for monetary liabilities denominated in U.S. dollars and euro. Conversely, depreciation of Renminbi against U.S. dollars and euro will generally result in foreign exchange gains for monetary assets denominated in U.S. dollars and euro and result in foreign exchange losses for monetary liabilities denominated in U.S. dollars and euro. Fluctuations in currency exchange rates could have a significant effect on our financial stability due to a mismatch among various foreign currency denominated assets and liabilities. Fluctuations in exchange rates, particularly among the U.S. dollar, euro and Renminbi, affect our operating and net profit margins and would result in foreign currency exchange gains and losses on our foreign currency denominated assets and liabilities. As of December 31, 2006 and 2007, our monetary assets denominated in U.S. dollars and euro were primarily related to cash and cash equivalents, pledged bank deposits and prepayments to suppliers, and our monetary liabilities denominated in U.S. dollars and euro were primarily related to short-term bank borrowings, long-term bank borrowings, advance payments from customers, trade accounts payable and other payables. Our exposure to foreign exchange risk primarily relates to foreign currency exchange gains or losses resulting from timing differences between the signing of the contracts and the settlement of the contracts. As of December 31, 2006 and 2007, our principal operating subsidiaries held the following amounts of monetary assets and liabilities denominated in U.S. dollars and euro:


[TABLE REMOVED, See Link, Page 121]


We incurred a foreign currency exchange loss, net, of approximately $1.3 million and $1.7 million for the years ended December 31, 2006 and 2007, respectively. Since 2007, we have entered into certain foreign exchange forward contracts to reduce the effect of our foreign exchange risk exposure. However, we cannot assure you that we would be able to effectively manage our foreign exchange risk exposure.

Without taking into account the effect of the potential use of hedging or other derivative financial instruments, we estimate that a 10% appreciation of Renminbi against U.S. dollars based on the foreign exchange rate on December 31, 2007 would result in net gain of $11.6 million (2006: net gain of $0.4 million) for our assets and liabilities denominated in U.S. dollars as of December 31, 2007. Conversely, we estimate that a 10% depreciation of Renminbi against U.S. dollars would result in net loss of $11.6 million (2006: net loss of $0.4 million) for our assets and liabilities denominated in U.S. dollars as of December 31, 2007.

Without taking into account the effect of the potential use of hedging or other derivative financial instruments, we estimate that a 10% appreciation of Renminbi against the euro based on the foreign exchange rate on December 31, 2007 would result in net loss of $2.5 million (2006: net loss of $0.9 million) for our assets and liabilities denominated in euro as of December 31, 2007. Conversely, we estimate that a 10% depreciation of Renminbi against the euro would result in net gain of $2.5 million (2006: net gain of $0.9 million) for our assets and liabilities denominated in euro as of December 31, 2007.

We cannot predict the effect of future exchange rate fluctuations on our results of operations and may incur net foreign currency exchange losses in the future.


-------------


End of Relevant Section.


Other thoughts:


If you go to page 121 of the linked document, and look at the table that's removed (due to formatting) above, you'll see that, for one thing, their net exposure in Euros is positive, while their exposure in Dollars is very negative. By this they appear to be betting on a strengthening Euro.

Where they say that an RMB appreciating against the Dollar or Euro may cause "foreign exchange losses for monetary liabilities denominated in U.S. dollars and euro." This one is hurting my brain.

Here are some cases that I'm guessing at:

1: If the RMB appreciates against the Dollar or Euro, then given constant operating costs in RMB, all of their operations in China effectively cost more Dollars or Euros to perform, is it that simple? Ok, so over the last couple years, the RMB has appreciated (per a chart somewhere else in the 20F), so their costs are increasing. They've already stated that they've taken over a million Dollars in Foreign Exchange losses.

2: Now, the RMB is largely pegged to the Dollar, so unless the Chinese Government changes the rules, the RMB will float with the Dollar against the Euro. This means that if they sell their product and hold assets in Dollars or RMB, and then those currencies weaken against the Euro, then LDK loses (offset by their gains in the value of their Euro Denominated Exposure).

3: In the case of a catastrophically-falling Dollar against the Euro, it strikes me that one thing that could happen is that China would unpeg the currency from the Dollar in order to protect it's value. In this case, the cost of doing business in China using RMBs would increase dramatically in the number of Dollars that this represents, and the value of their existing contracts in Dollars decreases dramatically. However, those Chinese workers in reciept of valuable RMB have increased their buying power dramatically incomparison to American Consumers in the World Market. In other words, RMB (and Euros) will buy Energy and Food on the World Market, while the Dollar approached worthlessness. Americans in this case will be laboring for Dollars that buy little, but a few Euros or RMB will buy alot of American goods.

4: In the case that the Dollar appreciates against the Euro, then so does the RMB, and at this stage, LDK would benefit by this as they are still largely Dollar Denominated. In this case the real value of their Dollar denominated debt would increase, but so would the value of their Dollar Denominated Signed Contracts (of which there are many).

5: If the Dollar falls to the Euro, and China remains Pegged, then China remains a very cheap producer of goods, but Inflation cuts into the Buying Power of Chinese Workers. Euro Denominated Assets increase relative to RMB and Dollar assets, and the cost of debt in Dollars decreases in relation to the net exposure to Euros.

DOH! It's late. I'm going to pause there for now. Feel free to let me know if I'm thinking about this in the wrong way.