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.

Peak Oil Paper - For future Reference.

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

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.

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?

Nuclear Supply Constraint.

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

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.