Friday, March 28, 2008

Off the Subject: Recession, Bailout, Bush's Sweeping Plan.

This is breaking news tonight. The Bush Administration has a plan out, to be unveiled Monday.

Bush seeks financial regulation overhaul


Like any plan supported by Bush, this makes me nervous. It's tough to squeeze an Honest plan out of a Corrupt Administration.


The proposal would designate the Fed as the primary regulator of market stability, greatly expanding the central bank's ability to examine not just commercial banks but all segments of the financial services industry.


Congress needs to look very carefully at how the bolded statement is defined.


In the case that "market stability" is at risk, what resources does the Independent Fed have at its disposal to stabilize it? Does the Plunge Protection Team, in concept at least, become a truly legitimate part of the Market?

We've already seen the Fed giving Billions of Dollars in Emergency Loans to Bear Stearns and other struggling Financials, which, for collateral "will essentially allow the government to hold as collateral a wide variety of investments that include hard-to-sell securities backed by mortgages." This seems to be saying that in the case that Securities crash in value and put at risk the Financials that own them, the Fed is authorized to lend unlimited amounts of real money in exchange for control of those possibly valueless securities. If the value of the securities goes to zero, then the Fed, and somewhere down the line, the taxpayer, loses. It would then be the equivalent of a "bailout" to the institutions that loaded up on bad investments in the first place. The possibility that it could potentially be a bailout of unlimited scope is worrisome. Even in the best case, the Fed is saddled with the administrative costs of managing a large number of diverse investments.


Another potentially disturbing quote that I've seen, was included in the above-linked Yahoo article when I originally read it, but now is gone. I've found it in another source: http://seattlepi.nwsource.com/business/356976_fedbush29.html

"The blueprint also suggests several areas where the SEC should take a lighter approach to its oversight. Among them are allowing stock exchanges greater leeway to regulate themselves and streamlining the approval of new products, even allowing automatic approval of securities products that are being traded in foreign markets."

I'd like to know what the hell this entails, because it sounds sketchy to me. Isn't one of the reasons that US Echanges are considered to be among the safest in the world is because there are safeguards in place to assure (at least to some extent) that Securites on those exchanges are vetted according to consistant standards? I don't know. I'd like to know more.

Wednesday, March 26, 2008

Peak Oil Paper - For future Reference.

http://www.peakoilassociates.com/PeakOilAnalysisOctober6-2007.pdf

Tuesday, March 18, 2008

New Jersey Utilities Financing Solar Installations.

PSE&G to offer solar energy loans

This lends some support to my post in December of last year.

It's a start, at least. I see big new developments coming in the next year as solar supply constraints start to lift.

Remember, financing Energy production is a very safe bet for the lender, as long as the overall price of Energy continues to increase. The installation in many cases essentially pays for itself, so rates of default should be low.

One interesting point is that the utility originally wanted to actually raise the rate charged on this financing, but was forced to accept a lower rate by the State. Personally, I think that increased demand for, and recognition of the safety of, these loans, will eventually drive the costs of these loans down significantly. Of course, the other hand is that it is likely that we'll see interest rate increases across the board over the next couple of years, in order to correct for some of the overall economic issues that we're seeing today.

Yikes: Ascent Tech / Bear Stearns Connection

From Motley Fool

Apparently Bear Stearns was underwriting an $80 Million offering for Ascent. It seems that the offering should still go forward under the agreement with the Fed and JP Morgan. It might be something to watch, though.

As it stands, the Market Cap of ASTI is only $116 Million. This is a big chunk of new money they're needing, and based on today's climate, I can't help but think that this might be a tough offering.

Sunday, March 16, 2008

For good Recession-related info:

The_Recession

Also, Robert Reich has a Blog.

Posted in response... Arguments for buying Solar.

My many cents (I think this might go on long):

I see you're in Massachussetts. There's an excellent tradition of Solar in that state, I believe it's the home of both Evergreen Solar and Spire Solar.

Here's the DSIRE page for your state on incentives available in your state: http://www.dsireusa.org/library/includes/maphomeowner.cfm?State=MA&CurrentPageId=1&RE=1&EE=1

The Federal incentive program is also available till the end of this year.

A professional installer would be able to calculate all of the incentives and give you totals.

Go get some numbers, and see what kind of payback timeframe you're looking at. Remember, the standard warranty timeframe for silicon-based panels is typically 25-30 years.


Buy now, or buy later?


If you want "cheaper, more efficient technology" then you're pretty much out of luck. You'll have to wait for at least a year. It's all pretty expensive(*)(**).


An Argument for buying now:


If the shit hits the fan, and for whatever reason Energy prices (continue to) spike in the next couple of years***, or if power simply becomes unavailable, then you'll be served by having bought now. However, prices of equipment and installation are undoubtedly high. If you have the money, then it might be worth the immediate investment. It depends on what you see happening in the next few years as far as the World Economy is concerned.


An Argument for buying later:


Industry "shorts" argue that there will be a "glut" of Silicon and Silicon-based panels on the market in the next year or two. They argue that the manufacturing capability is scaling up way too fast, and that it will outstrip demand, reduce prices of the final product, and cause the industry to bust. If this happens, it will be within two years as the world's polysilicon supply increases manyfold as many projects currently in development begin producing. Personally, I believe the shorts are incorrect (and very often shills for the Fossil / Nuclear Industries). The company LDK Solar, for instance, has just announced that they are almost completely sold out of product for '08 and '09, and they have numerous long-term contracts stretching out over the next 10 years with European and Asian trading partners. In any case, any price reduction will serve to boost demand until a balance is achieved, and considering the Economy's thirst for Energy, I don't believe that prices are going to collapse for many years. This isn't the 70's again, Fossil Energy has few options for new development with which to increase supply.

"Shorts" also argue that thin-film panels will take over the market, and blow away today's Silicon Technology in efficiency and price. This may be, but I have my doubts. For one, thin films are less efficient per unit area than Silicon-based Panels, and they have their own "feedstock" constraints. Some use Cadmium Telluride, where Cadmium is toxic, and Tellurium is one of the rarest elements on Earth, and others use Indium, which is not incredibly rare, but is not common. Another factor between thin films, and Silicon-based panels would be durability / working lifespan, and I don't think we have the numbers yet.

Positive arguments for buying later would also include increased Federal Subsidies under a Democratic President / Congress, as well as new Incentives that will be forthcoming from Lenders (we've seen a couple examples of banks seeing value in lending for these projects, and I think we'll see more coming).


An Argument for buying Solar stock:


Maybe it makes sense to wait before Installing at home, but there are Installations happening at an increasing rate all over the World. It is my strongest "Belief" that getting into certain stocks over the next year is truly getting in on the Ground Floor of an Industry Boom. In truth, these stocks have been beat up since the end of last year, and I call that a good thing for anybody who gets in while they're out of favor. The risk, of course, is that the World Economy will collapse, taking with it the Stock Markets. If that happens, then you had better have a Home Energy Installation, firearms, and a stash of food. Otherwise, it seems to me fair to say that as the cost of all Energy Increases (in US Dollars, at least), combined with the economies of scale that we're seeing develop in Solar Manufacturing over the last 2 years (and the rest of '08), Public Companies in this Industry will be increasingly recognized by American Investors as we go into '09 and beyond, and owning some stock during a period of growth could eventually offset some of the increases that you'll see in your own power bills.


Anywhoo, just a couple of thoughts.


* There has been a shortage of Polysilicon for use in Silicon-based panels, and in the next year many new plants will be up and running around the world.

** It's possible that you could get some kind of solar water-heating system for a bit cheaper than PV.

*** Possibly due to further devaluation of the US Dollar?

Thursday, March 13, 2008

Nuclear Supply Constraint.

Samurai-Sword Maker's Reactor Monopoly May Cool Nuclear Revival

LDK News.

LDK Solar Announces Near Sellout of Wafer Capacity for 2008 and 2009; Comments on Its Environmental Practices


XINYU CITY, China and SUNNYVALE, Calif., Mar 13, 2008 /PRNewswire via COMTEX News Network/ -- XINYU CITY, China and SUNNYVALE, Calif., March 13 /PRNewswire-FirstCall/ -- LDK Solar Co., Ltd. (NYSE: LDK), a leading manufacturer of multicrystalline solar wafers, announced today that based upon its current backlog of contracts, it has almost sold out 100% of its solar wafer capacity for 2008 and has sold more than 90% of its solar wafer capacity for 2009. The long-term nature of its contracts enhances LDK's visibility for its business.

In preparation for the growth of its 2008 wafer production and as noted on its fourth quarter conference call, LDK increased its inventory to $380 million at the end of 2007. Inventory in transit represented the most significant portion of the increase, growing from 263 MT to 752 MT during the quarter as the Company purchased silicon material from around the globe. Approximately 8%, or $30 million, of LDK's inventory at year end was classified from an accounting perspective as non-current due to the expectation that these materials would be consumed over a period longer than one year. The materials included in the non-current category represent usable silicon materials, which, due to the current virgin polysilicon shortage can only be used and blended in smaller quantities. The Company expects that the blending ratios of the non-current inventory will significantly change, increasing consumption of the non-current inventory as LDK Solar ramps production of its own polysilicon, and as more virgin polysilicon and higher resistivity feedstock become available. The higher inventory balance is an important factor in present and future cost reduction strategies at LDK Solar.

Additionally, LDK commented on its environmental practices. LDK maintains strong environmentally responsible standards across the Company. LDK is committed to building and operating safe and environmentally friendly polysilicon plants. In its state-of the-art polysilicon plants, currently under construction, the Company is implementing the latest proven Western technology for recycling. The plants will utilize a vent recovery system that will recycle and convert silicon tetrachloride (STC) back to Trichlorosilane (TCS) for consumption in the production process. Once completed, LDK's plants will have a fully closed loop system where the majority of the potential waste (STC) will be recycled.

Tuesday, March 11, 2008

ZAAP?

I've been checking out ZAAP off and on for some time.

Here's a headline that catches the attention: Oil Tops $109 a Barrel, ZAP Dealer Shows Only Electric Car at Twin Cities Auto Show

The price of oil is a huge factor in everything that's going on right now. ZAAP is way ahead of most of the competition in actually having a product to sell, though they don't have the scale or quite possibly the money to scale up.

I don't know. I have a "Geekfest" tomorrow at a friend's house, the host of which will surely know all about them.

Leaning towards Applied Materials.

For a mid-long term buy, I'd be tempted to look at AMAT. They've generated a very hot deal, and left in a bit of mystery to keep up interest over the next few months. They've also remained seemingly steady in the meltdown so far.

Nice Day today! But...

This deal reached with the Banks is no long term solution, and isn't anywhere near equivalent to the scale of losses that we're going to see.

Maybe the market will hold up for a day or two, I don't know. Best case scenario is that we get a little positive action until Earnings Season kicks us in the crotch, but I think it more likely that we get a day or two reprieve, then then more sadness.

I'm of the opinion that this whole year is going to be a chance to accumulate Solar, and the daily ups and downs are to be ignored.

Thursday, March 6, 2008

Naked Short Analysis - LDK

I'm not sure how to interpret these charts ( See)


I guess that the first obvious point is the fact that data was missing from the days immediately following the Situ Event. What this says to me is that there is something there worth hiding. LOL! One day maybe we'll know what the Naked Short Selling Spike looked like at this time, but it will probably take a lawsuit to discover that data.

I'll say that I'm suprised by this data. This is of course assuming that it is accurate (though the SEC won't guarantee it).

I believed that there would be many more Naked Short Shares outstanding throughout the low period between October and December, but it seems that they were mostly able to cover prior to the 11th of October. Of course, this data doesn't show daily volume of Naked Short Shares, it only shows the end-of-day snapshot of the number of Naked Shares Outstanding.

It has been quite clear that the powers that be have been using everything that they have at their disposal to knock down any potential break-out moments.


So, what happened in December?


It's unclear, but I think it can be assumed that whatever happened, those doing the Naked Shorting were out to make money. Though the level of Naked Shorts were under a Million on average prior to the December rally, Covered Short Interest averaged around 7,350,000 shares, and peaked around 8,934,265 shares on 12/14( See). Covering those shorts at over $70 per share would have been quite expensive.


I've gone back and forth. I simply can't come up with a scenario using the charts, where "they" made any money off of naked shorting in December, or even really manipulated the price. According to the data, after the initial runup in Naked Shares, the number of Fails decreased as the price continued to rise, and was mostly covered prior to or during the fall from the top. That's a money loser for anyone who sold short near the bottom, unless they already had shares to cover with from the time prior to the spike. The growth of Fails in the early stages of the spike would have buffered the early rise, but to my mind, seems pretty insignificant.


Any thoughts or suggestions are welcome!

Tuesday, March 4, 2008

New Data on Naked Shorts - LDK.



These charts are created based on new data released by the DTCC as well as Google Finance.