Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
The Madoff Economy
By PAUL KRUGMAN
NYTimes
Published: December 19, 2008
The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend.
Yet surely I’m not the only person to ask the obvious question: How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?
The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole.
Let’s start with those paychecks. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated; high pay on Wall Street was a major cause of that divergence.
But surely those financial superstars must have been earning their millions, right? No, not necessarily. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.
Consider the hypothetical example of a money manager who leverages up his clients’ money with lots of debt, then invests the bulked-up total in high-yielding but risky assets, such as dubious mortgage-backed securities. For a while — say, as long as a housing bubble continues to inflate — he (it’s almost always a he) will make big profits and receive big bonuses. Then, when the bubble bursts and his investments turn into toxic waste, his investors will lose big — but he’ll keep those bonuses.
O.K., maybe my example wasn’t hypothetical after all.
So, how different is what Wall Street in general did from the Madoff affair? Well, Mr. Madoff allegedly skipped a few steps, simply stealing his clients’ money rather than collecting big fees while exposing investors to risks they didn’t understand. And while Mr. Madoff was apparently a self-conscious fraud, many people on Wall Street believed their own hype. Still, the end result was the same (except for the house arrest): the money managers got rich; the investors saw their money disappear.
We’re talking about a lot of money here. In recent years the finance sector accounted for 8 percent of America’s G.D.P., up from less than 5 percent a generation earlier. If that extra 3 percent was money for nothing — and it probably was — we’re talking about $400 billion a year in waste, fraud and abuse.
But the costs of America’s Ponzi era surely went beyond the direct waste of dollars and cents.
At the crudest level, Wall Street’s ill-gotten gains corrupted and continue to corrupt politics, in a nicely bipartisan way. From Bush administration officials like Christopher Cox, chairman of the Securities and Exchange Commission, who looked the other way as evidence of financial fraud mounted, to Democrats who still haven’t closed the outrageous tax loophole that benefits executives at hedge funds and private equity firms (hello, Senator Schumer), politicians have walked when money talked.
Meanwhile, how much has our nation’s future been damaged by the magnetic pull of quick personal wealth, which for years has drawn many of our best and brightest young people into investment banking, at the expense of science, public service and just about everything else?
Most of all, the vast riches being earned — or maybe that should be “earned” — in our bloated financial industry undermined our sense of reality and degraded our judgment.
Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.
After all, that’s why so many people trusted Mr. Madoff.
Now, as we survey the wreckage and try to understand how things can have gone so wrong, so fast, the answer is actually quite simple: What we’re looking at now are the consequences of a world gone Madoff.
-----------------------------------
The Madoff Economy
By PAUL KRUGMAN
NYTimes
Published: December 19, 2008
The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend.
Yet surely I’m not the only person to ask the obvious question: How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?
The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole.
Let’s start with those paychecks. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated; high pay on Wall Street was a major cause of that divergence.
But surely those financial superstars must have been earning their millions, right? No, not necessarily. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.
Consider the hypothetical example of a money manager who leverages up his clients’ money with lots of debt, then invests the bulked-up total in high-yielding but risky assets, such as dubious mortgage-backed securities. For a while — say, as long as a housing bubble continues to inflate — he (it’s almost always a he) will make big profits and receive big bonuses. Then, when the bubble bursts and his investments turn into toxic waste, his investors will lose big — but he’ll keep those bonuses.
O.K., maybe my example wasn’t hypothetical after all.
So, how different is what Wall Street in general did from the Madoff affair? Well, Mr. Madoff allegedly skipped a few steps, simply stealing his clients’ money rather than collecting big fees while exposing investors to risks they didn’t understand. And while Mr. Madoff was apparently a self-conscious fraud, many people on Wall Street believed their own hype. Still, the end result was the same (except for the house arrest): the money managers got rich; the investors saw their money disappear.
We’re talking about a lot of money here. In recent years the finance sector accounted for 8 percent of America’s G.D.P., up from less than 5 percent a generation earlier. If that extra 3 percent was money for nothing — and it probably was — we’re talking about $400 billion a year in waste, fraud and abuse.
But the costs of America’s Ponzi era surely went beyond the direct waste of dollars and cents.
At the crudest level, Wall Street’s ill-gotten gains corrupted and continue to corrupt politics, in a nicely bipartisan way. From Bush administration officials like Christopher Cox, chairman of the Securities and Exchange Commission, who looked the other way as evidence of financial fraud mounted, to Democrats who still haven’t closed the outrageous tax loophole that benefits executives at hedge funds and private equity firms (hello, Senator Schumer), politicians have walked when money talked.
Meanwhile, how much has our nation’s future been damaged by the magnetic pull of quick personal wealth, which for years has drawn many of our best and brightest young people into investment banking, at the expense of science, public service and just about everything else?
Most of all, the vast riches being earned — or maybe that should be “earned” — in our bloated financial industry undermined our sense of reality and degraded our judgment.
Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.
After all, that’s why so many people trusted Mr. Madoff.
Now, as we survey the wreckage and try to understand how things can have gone so wrong, so fast, the answer is actually quite simple: What we’re looking at now are the consequences of a world gone Madoff.
-----------------------------------
I picked up more shares at .013 today.
Boardmarks increasing daily.
We are sitting on the launch pad waiting for
some positive news >>>$$$$$.
GROUND FLOOR OPPORTUNITY:
Posted by: The Rainmaker Date: Friday, December 12, 2008 1:38:35 PM
In reply to: aquaspin who wrote msg# 278 Post # of 304
Zoolink-ZLNK Shell just changed hands. Taken over by a lawyer David Price who acts as facilitator on several reverse mergers. He doesn't usually shell sit so it looks like a deal could be close at hand. Lots of upside from these sub-penny levels. Last shares O/S under 50 million. Saw two other deals this guy did, one was at .55 the other at .07.....so from under a penny ZLNK could have some nice room to run. Pink sheets already updated and Nevada SOS. All this just happened within last week.
https://esos.state.nv.us/SOSServices/AnonymousAccess/CorpSearch/CorpDetails.aspx?lx8nvq=MeUryuQmoLbdmXXWWPhWYQ%253d%253d
ZOOLINK CORPORATION
Business Entity Information
Status: Active on 12/8/2008
Officers Include Inactive Officers
President - DAVID E PRICE ESQ
Address 1: 13520 ORIENTAL ST Address 2:
City: ROCKVILLE State: MD
Zip Code: 20853 Country:
Status: Active
Actions\Amendments
Action Type: Annual List
Document Number: 20080794688-92 # of Pages: 1
File Date: 12/05/2008 Effective Date:
(No notes for this action)
Action Type: Registered Agent Change
Document Number: 20080794690-35 # of Pages: 1
File Date: 12/05/2008 Effective Date:
(No notes for this action)
Action Type: Registered Agent Resignation
Document Number: 20070597371-71 # of Pages: 1
File Date: 08/30/2007 Effective Date:
(No notes for this action)
Action Type: Resignation of Officers
Document Number: 20070596956-29 # of Pages: 1
File Date: 08/30/2007 Effective Date:
Pinksheets info updated
ZooLink Corp.
13520 Oriental St.
Rockville, MD 20853
Company Officers
Robert Price, Esq., Dir.
David Price, Legal Counsel
#
Outstanding Shares
43,531,190 as of Apr 10, 2007
2008-The Rainmakers Moneymakers. stock symbol RAIN
http://investorshub.advfn.com/boards/board.asp?board_id=11575
URRE et al pro's picks:
http://biz.yahoo.com/indie/081210/1585_id.html?.v=1
No matter what the OPEC cut is, some members will cheat and maintain or increase production ... namely Venezeula, Chavez needs the money to support all the socialist programs.
Sure would like news this week.
POSITIVE NEWS!!!!!$$$$$>
Rain, I am excited about ZLNK's potential.
Increasing boardmarks...a lot of new interest during last two sessions. Looking forward to the updates.
"You have to take their money before they take yours." )))(your siggy) ....Isn't that Bernard Madhof's ethics?...LOL.
I loaded up on URRE today.
Looks like we may have a nice upside run,
possibly to over a $1.00 in upcoming sessions.
Sheff, URRE looks like a great $$$$$ opportunity.
I am going after the .01's but it isn't happening yet.
I need a flipper later this afternoon to help my cause...LOL.
Great!..I am adding more shares today.
ZLNK is a great $$$$$ opportunitry.
I just bought 50K of ZLNK at .01/share.
I don't want to be too late for the party.
Giant Ponzi Scheme
http://online.wsj.com/article/SB122903010173099377.html
The other deals that David Price did, were those two also registered with the same Las Vegas agent?
I may buy some under a penny on Monday.
U.S. Gasoline Demand Rising as Prices Plunge
Posted Dec 11, 2008 11:12am EST by Sarah Lacy in Investing, Commodities, Recession, Clean Tech
Related: ^dji, ^gspc, xom, cvx, vlo, bp
The oil market has been undergoing dramatic changes since record prices back in July. Let's get straight to the pocketbook. The U.S. average for a gallon of unleaded is around $1.68 according to AAA. That's a whopping 59% off the national average record of $4.11 a gallon in mid July, when peak-oil theorists were signaling a genuine end of the crude barrel.
As my guest, investor and Infectious Greed blogger Paul Kedrosky notes, domestic fuel consumption has risen with consumers apparently taking advantage of cheaper prices, according to the latest MasterCard Spending Pulse report. So why haven't global oil prices followed the trend?
Today, the International Energy Agency, an adviser to 28 nations, said global oil demand will contract this year for the first time in 25 years, Bloomberg News reports. The Paris-based IEA also cut its outlook for 2009. Global oil prices are falling despite production cutbacks and oil exporting nations' efforts to halt the $100 plunge in crude prices. Crude oil today is trading around $43 a barrel. New York oil futures reached a record of $147.27 a barrel in July.
As Kedrosky argues, certainly all these trends illustrate the runup at the gasoline pump this summer reflected more than supply and demand. Just as institutional money and hedge funds flooded commodities, the money quickly is flowing back out.
So is this ultimately a saving grace for worried consumers and the beleaguered economy? Short term, yes. Long term, if we take our eye off the need for new sources of energy, no. That’s a big reason Kedrosky calls oil “the most dangerous commodity in the world."
Buyers of refiners and holding .. caveat emptor:
http://www.reuters.com/article/innovatio...
VLO has been my favorite for years. Coming off it's lows now.
Largest refiner in the U.S.( 15 refinerys & 87% utilization rate) ) and flush with cash.
VALERO ENERGY is an excellent trading stock in this market.
VLO is now the 16th largest company in the Fortune 500, beating 21 of the 30 stocks in the Dow 30.
I like your PBR as well.
SB ($4.99 NYSE )...Nice breakout today.
Although it is not in the S&P500:
http://www.chartmoney.com/stockquotes.php/?ticker=sb
Looks like Ely-Lake's bank is going to be saved up there in Minnesota...LOL.
Impact of Credit Crisis on the Energy Industry - Where Are We Now?
Posted by Gail the Actuary on November 30, 2008 - 10:01am
The Oil Drum
http://www.theoildrum.com/node/4805
I recently looked through news articles to see which energy sectors were being affected by the credit crisis. I was amazed at how widespread and how devastating the impact is.
There are really two closely related problems. One is reduced access to credit, making new borrowing difficult for nearly every business. Prices for all commodities have been dropping as well. At least part of the reason for this price decline is the lack of availability of credit—many of the less credit-worth buyers drop out of the market. This leaves fewer buyers and almost the same number of sellers, so the price drops.
In this post, I examine how reduced access to credit and the concomitant decline in commodity prices is affecting energy companies. The impact I am seeing across a wide range of energy companies is a decline in new investment and a stretched-out timeframe for new projects. In addition, many of the weaker companies in the energy supply chain are likely to be forced out of business by the credit crisis.
When energy production is viewed for all companies combined, my analysis suggests that the credit crisis will cause the production of virtually all fuels to be decline, relative to what they otherwise would have been. I expect production of oil will decline (in absolute terms, not just relative terms) in the years ahead. Since oil production was already on a plateau, this decline is expected to bring about "peak oil". Because of long lead times, uranium production seems likely to fall short of what is needed by nuclear power plants, within the next few years.
The long-term implications of declines in energy production are very serious. Research shows that standards of living are closely tied to energy consumption. With less energy available, standards of living are likely to decline.
Oil and Natural Gas
The oil and natural gas industry has a very long supply chain, including many small players. In order to operate smoothly, each player in the chain must either have cash or credit to buy the goods and services it needs. The bigger companies with good cash flow and a low cost of production are in a much better position than smaller more highly leveraged companies.
The credit squeeze has already put some of these smaller players out of business. For example, a shipping company, Svithoid Tankers, went into liquidation after facing an immediate liquidity shortage and a natural gas marketing company, Catalyst Energy Group Inc., filed for Chapter 11 bankruptcy, after its credit line was ended, indirectly as a result of the failure of Lehman Brothers.
Many other companies are still operating but are encountering a cash crunch, because others don’t want to do business with them, or because the credit that is available is very expensive. These players are often willing to offer discounted rates for their services, in the hopes that they will be able to keep cash flow up.
Petrobas in Brazil recently ran into a problem with suppliers who promised more than they could deliver when it awarded contracts for building 20 deep-water drilling rigs to Brazilian firms with little experience in deep-water drilling. Many of these firms were not able to borrow the money they needed to finish the oilrigs they had promised. Now Petrobas has the choice of advancing these contractors the additional funds they need, or delaying the project by finding other contractors at a much higher price.
We are now hearing about companies trying to use the lower prices available from some contractors to their advantage. In Saudi Arabia, Saudi Aramco is reportedly renegotiating contracts on its $15 billion Manifa project that was originally scheduled to add 900,000 barrels per day in oil production in mid-2011. This action is intended to reduce Saudi Aramco costs, but will increase the likelihood of bankruptcy of its subcontractors and will delay the start date of new production.
Because of the credit squeeze, many oil and gas companies are finding it necessary to limit their investments to what they can finance with cash flow. In the Canadian oil sands, both Suncor and Petro-Canada have pushed back plans to purchase “upgraders,” at least partly because of cash flow considerations. US natural gas producer Chesapeake Energy cut its spending plans three times within a month.
A few companies have found ways to work around their inability to find credit in ordinary markets. Russian oil company Rosneft reached an agreement with Chinese energy company CNPC Sinopec to lend it funds for a pipeline in return for a guarantee of oil from the pipeline. This arrangement gives China a long-term guarantee of the product it needs, locking others out of the market. (Note: It seems like there were later changes to this.) LUKoil, another Russian oil company, has asked the Russian Development Bank for a $1.8 billion loan to refinance its foreign debt.
Another approach for getting around the credit squeeze is merger with a better-funded partner. While few mergers have taken place to date, the oil majors would seem to be in a position where they can buy some companies with credit problems, if they choose to.
Can the credit squeeze be expected to have an impact on capital expenditure going forward? Yes, for two reasons. First, without outside sources of credit, companies are under pressure to keep capital expenditures within the funds that are generated by cash flow. Second, since the credit squeeze keeps the price of oil and natural gas low, there is no point in extracting oil and gas if the market price is too low to provide a reasonable return on investment. Because of this second limitation, the projects that are eliminated are the projects that require a higher oil or natural gas price to be profitable.
In the case of oil, the projects that become non-economic are the newer fields that are more expensive to extract, such as the Canadian oil sands, Petrobas’ new deep offshore Brazilian oil, oil in the Bakken formation in the US, and oil near the Arctic Circle. In the case of natural gas, the more expensive fields are various types of unconventional gas production, such as Barnett Shale in Texas.
Other types of capital expenditure that are not directly related to production are also likely to come under pressure. For example, it is likely to be difficult to get funding for new pipelines (including the proposed natural gas pipeline from Alaska), if these have not yet been funded. In the UK, plans had been made for additional underground natural gas storage beneath Portland, Dorset, so as to have more ability to store extra gas for winter and prevent price spikes. This has now been suspended, for lack of funding.
The net impact of all these issues is that oil production has already started to decline. Plans for future investment have been cut back, so it is likely that oil production will stay low for quite some time. Even if prices should rebound, lack of credit will limit the ability of the oil supply chain to increase production. For these reasons, world oil production is likely past its peak.
Natural gas production and distribution is based more on local markets than an international market, but it too will start seeing more problems. In places where natural gas production was forecast to increase, these increases are likely to be less than previously forecast. In places where production was expected to decrease, the decreases are likely to be greater than planned. In the United States, natural gas tends to be produced by smaller, highly leveraged companies. These companies are likely to be disproportionately affected by the credit crisis. While US natural gas production has recently been increasing, future production is likely to be flatter. If credit problems persist for another two or three years, production may even start to decline, because of the rapid decline rates of unconventional gas wells, and the difficulty in funding enough new wells.
Coal
The coal industry is in many ways similar to the oil and natural gas industry. The companies that can be expected to fare best in the credit crunch are large companies, with low-cost mines and significant cash flow from current operations. These companies will be able to use their cash flow to finance future capital expenditures. Companies that depend heavily on debt and smaller service companies will have difficulty obtaining credit. Some of these companies may seek to merge with major coal companies.
As with oil and natural gas, the price of coal has dropped recently as a result of reduced demand associated with the credit crisis. The lower price will make new investments less profitable than they would otherwise have been. This will act as a deterrent to opening new mines, particularly in higher-cost areas.
The infrastructure used for transporting coal is primarily railroads and barges, plus some trucks. With the credit crisis, it is likely to be difficult to obtain funding to upgrade this infrastructure. The lack of new infrastructure will act as another deterrent to growth of the cola industry.
Prior to the recent credit crisis, there were about a dozen Coal-to-Liquid (CTL) plants in some stage of the planning process. The products made at these plants were intended to compete with gasoline or diesel. Now these plans are being re-evaluated because at an oil price of $60 barrel or less, the cost of CTL is no longer competitive.
Ethanol and other Biofuels
Ethanol is another product intended to compete with gasoline. When oil prices were high, and adequate subsidies were in place, ethanol producers did well. Now that both oil and corn prices are down, both farmers and ethanol producers are having difficulties.
The US’s largest ethanol producer, Verasun, recently sought bankruptcy protection, and there are a number of smaller companies near bankruptcy. The New York Times reports, “The industry should be consolidated — I think everybody believes that,” said Mr. Horowitz of Soleil. “But who is going to finance anything right now, let alone a very low-margin business that doesn’t look like it’s going to get better in the near term?”
Ethanol in Brazil is encountering difficulties as well. The sector is highly leveraged. Projects which already have been funded will continue, but there is a question whether funds for new investment can be found, especially in light of the low price for gasoline. Mergers may occur because the credit crisis makes some of the projects easy takeover targets.
Ethanol from non-food sources (called cellulosic ethanol) is not at this point cost-competitive with corn or sugar based ethanol. Producers have been hopeful that additional funding for their research might become available, so as to try to lower production costs. This is looking less and less likely, with the credit crisis. In the US, President-Elect Barack Obama has indicated that some of his plans for energy investment may have to be scaled back, because of the $700,000 billion bailout of financial markets. Lower prices for gasoline make cellulosic ethanol even less cost competitive, discouraging new investment.
In the European Union, biofuel goals were recently pared back, so it is not as clear how much of the lessened growth in production is lowered goals, and how much is the impact of the credit crisis. Last year, the goal for biofuel production was set at 10% by 2020, but in September 2008 this was pared back to 5% of transport fuels by 2015. There is still a goal of 10% by 2020, but this is to be reviewed in 2014 depending on scientific progress.
Wind, Solar, and Geothermal
Wind, solar, and geothermal are all renewable sources of electricity. They are intended to be replacements for electricity generated by fossil fuels, partly because of climate change issues and partly to foster energy independence. Since these are long-term goals, cost is also an issue. When the price of oil and natural gas was high, there appeared to be cost savings, but these disappear when fossil fuel prices drop.
These renewable energy companies have been hit very hard by the credit crisis. Most used considerable leverage and were growing rapidly before the crisis. The credit crisis has dried up funding drying up, so new projects are off substantially.
One of the issues is that in Europe, investment in wind and solar was pushed along by climate change legislation. Now, with the financial crisis, countries are backpedalling on their promises. Back in March 2007, the European Union members pledged to cut greenhouse-gas emissions 20% below 1990 levels by 2020. Now that the costs are clearer, and the economies are running into financial difficulties, both Germany and Italy are saying that these goals are unrealistic.
In Great Britain, climate-change goals have recently been raised. Large projects backed by the larger utilities seem to be safe, but more speculative projects are running into trouble, because of the difficulty in obtaining financing. The Times quotes Ian Whitlock, a partner of Ernst & Young specializing in utilities as saying, “The market has definitely tightened up. The lending rates over Libor and the covenants on renewable energy deals in particular are being toughened up.”
In the US, wind energy has been hit very hard. Prior to the credit crisis, the top financers of wind energy included Lehman Brothers, AIG, JP Morgan, and GE Energy Financial. As a result of the credit crisis, these organizations are less able to lend. Congress recently extended a 2.1 cents per kilowatt hour tax credit, but this doesn’t seem to be working, partly because the banks who would normally invest in wind energy are not themselves very profitable, so get little benefit from the tax credit, and partly because of concern that the wind energy will not be very profitable, and therefore have difficulty paying back the loans.
The situation in the US for solar and geothermal is similar to that for wind. German solar-power company Schott Solar AG, for example, called off a $900 million initial public offering earlier this month, citing poor market conditions. While the US Congress extended solar tax credit for eight years rather than one, it is of limited benefit to banks and other investors who are currently not profitable.
According to Forbes, “While the good news is that solar technology is poised to continue its impressive growth streak, the bad news is that a perfect storm is on the horizon as a wave of supply converges with diminishing government subsidies and a very chilly credit market. This will require solar manufacturers to reduce prices to compete and could spell trouble for smaller module makers or companies overly reliant on credit to operate.”
Nuclear
Even nuclear seems to be hitting headwinds with the current credit crisis.
First, with the credit crisis, it is more difficult to finance new nuclear power plants and other infrastructure. We read, “Funding ‘Iffy’ for Uranium Enrichment Plant”. The article indicates that US’s only provider of enriched uranium, USEC Inc., wants to build a new $3.5 billion facility, but cannot get public marketing financing, given the current market situation. It is hoping to get a Department of Energy loan guarantee.
Second, the spot price of uranium has dropped by more than half. While most production is sold on long-term contracts, rather than in spot markets, this, together with the lack of credit, is inhibiting new investment. Cameco, the largest uranium producer in the world, reports, “Growth will take place but at a slower and more measured pace. We will look for opportunities to reduce costs and defer projects that cannot be funded internally.”
One new South African mine, which was still in pre-commercial production, has recently closed, partly due to declining uranium prices and rising costs of inputs. The company said it could not raise the required capital to fund development and subsequent production at the mine because of the global credit squeeze.
In the next few years, it is likely that uranium production will fall short of the amount needed by operating nuclear power plants worldwide. Currently, nuclear warheads are being processed, but the treaty covering this will expire in 2013, and will probably not be renewed. In addition, several mines will be reaching the ends of their lives in about the same timeframe, and new production requires eight to ten year lead times. At this point, it is likely already too late to bring enough production on to meet uranium needs in the 2013 to 2015 timeframe. The credit crisis will only make the situation worse.
I wrote this post about three weeks ago, and I don't think things have gotten much better since then. According to Merrill Lynch, the average junk bond yield is now greater than 20%. A recent Wall Street Journal article (behind pay wall) says, "The junk bond market has closed the door." The article indicates that in November, no new junk bonds were issued. It also indicates that about half of US corporations have below-investment-grade credit, and thus are being locked out of the market. It seems likely that quite a number of these companies are in the energy field.
Impact of Credit Crisis on the Energy Industry - Where Are We Now?
Posted by Gail the Actuary on November 30, 2008 - 10:01am
The Oil Drum
http://www.theoildrum.com/node/4805
I recently looked through news articles to see which energy sectors were being affected by the credit crisis. I was amazed at how widespread and how devastating the impact is.
There are really two closely related problems. One is reduced access to credit, making new borrowing difficult for nearly every business. Prices for all commodities have been dropping as well. At least part of the reason for this price decline is the lack of availability of credit—many of the less credit-worth buyers drop out of the market. This leaves fewer buyers and almost the same number of sellers, so the price drops.
In this post, I examine how reduced access to credit and the concomitant decline in commodity prices is affecting energy companies. The impact I am seeing across a wide range of energy companies is a decline in new investment and a stretched-out timeframe for new projects. In addition, many of the weaker companies in the energy supply chain are likely to be forced out of business by the credit crisis.
When energy production is viewed for all companies combined, my analysis suggests that the credit crisis will cause the production of virtually all fuels to be decline, relative to what they otherwise would have been. I expect production of oil will decline (in absolute terms, not just relative terms) in the years ahead. Since oil production was already on a plateau, this decline is expected to bring about "peak oil". Because of long lead times, uranium production seems likely to fall short of what is needed by nuclear power plants, within the next few years.
The long-term implications of declines in energy production are very serious. Research shows that standards of living are closely tied to energy consumption. With less energy available, standards of living are likely to decline.
Oil and Natural Gas
The oil and natural gas industry has a very long supply chain, including many small players. In order to operate smoothly, each player in the chain must either have cash or credit to buy the goods and services it needs. The bigger companies with good cash flow and a low cost of production are in a much better position than smaller more highly leveraged companies.
The credit squeeze has already put some of these smaller players out of business. For example, a shipping company, Svithoid Tankers, went into liquidation after facing an immediate liquidity shortage and a natural gas marketing company, Catalyst Energy Group Inc., filed for Chapter 11 bankruptcy, after its credit line was ended, indirectly as a result of the failure of Lehman Brothers.
Many other companies are still operating but are encountering a cash crunch, because others don’t want to do business with them, or because the credit that is available is very expensive. These players are often willing to offer discounted rates for their services, in the hopes that they will be able to keep cash flow up.
Petrobas in Brazil recently ran into a problem with suppliers who promised more than they could deliver when it awarded contracts for building 20 deep-water drilling rigs to Brazilian firms with little experience in deep-water drilling. Many of these firms were not able to borrow the money they needed to finish the oilrigs they had promised. Now Petrobas has the choice of advancing these contractors the additional funds they need, or delaying the project by finding other contractors at a much higher price.
We are now hearing about companies trying to use the lower prices available from some contractors to their advantage. In Saudi Arabia, Saudi Aramco is reportedly renegotiating contracts on its $15 billion Manifa project that was originally scheduled to add 900,000 barrels per day in oil production in mid-2011. This action is intended to reduce Saudi Aramco costs, but will increase the likelihood of bankruptcy of its subcontractors and will delay the start date of new production.
Because of the credit squeeze, many oil and gas companies are finding it necessary to limit their investments to what they can finance with cash flow. In the Canadian oil sands, both Suncor and Petro-Canada have pushed back plans to purchase “upgraders,” at least partly because of cash flow considerations. US natural gas producer Chesapeake Energy cut its spending plans three times within a month.
A few companies have found ways to work around their inability to find credit in ordinary markets. Russian oil company Rosneft reached an agreement with Chinese energy company CNPC Sinopec to lend it funds for a pipeline in return for a guarantee of oil from the pipeline. This arrangement gives China a long-term guarantee of the product it needs, locking others out of the market. (Note: It seems like there were later changes to this.) LUKoil, another Russian oil company, has asked the Russian Development Bank for a $1.8 billion loan to refinance its foreign debt.
Another approach for getting around the credit squeeze is merger with a better-funded partner. While few mergers have taken place to date, the oil majors would seem to be in a position where they can buy some companies with credit problems, if they choose to.
Can the credit squeeze be expected to have an impact on capital expenditure going forward? Yes, for two reasons. First, without outside sources of credit, companies are under pressure to keep capital expenditures within the funds that are generated by cash flow. Second, since the credit squeeze keeps the price of oil and natural gas low, there is no point in extracting oil and gas if the market price is too low to provide a reasonable return on investment. Because of this second limitation, the projects that are eliminated are the projects that require a higher oil or natural gas price to be profitable.
In the case of oil, the projects that become non-economic are the newer fields that are more expensive to extract, such as the Canadian oil sands, Petrobas’ new deep offshore Brazilian oil, oil in the Bakken formation in the US, and oil near the Arctic Circle. In the case of natural gas, the more expensive fields are various types of unconventional gas production, such as Barnett Shale in Texas.
Other types of capital expenditure that are not directly related to production are also likely to come under pressure. For example, it is likely to be difficult to get funding for new pipelines (including the proposed natural gas pipeline from Alaska), if these have not yet been funded. In the UK, plans had been made for additional underground natural gas storage beneath Portland, Dorset, so as to have more ability to store extra gas for winter and prevent price spikes. This has now been suspended, for lack of funding.
The net impact of all these issues is that oil production has already started to decline. Plans for future investment have been cut back, so it is likely that oil production will stay low for quite some time. Even if prices should rebound, lack of credit will limit the ability of the oil supply chain to increase production. For these reasons, world oil production is likely past its peak.
Natural gas production and distribution is based more on local markets than an international market, but it too will start seeing more problems. In places where natural gas production was forecast to increase, these increases are likely to be less than previously forecast. In places where production was expected to decrease, the decreases are likely to be greater than planned. In the United States, natural gas tends to be produced by smaller, highly leveraged companies. These companies are likely to be disproportionately affected by the credit crisis. While US natural gas production has recently been increasing, future production is likely to be flatter. If credit problems persist for another two or three years, production may even start to decline, because of the rapid decline rates of unconventional gas wells, and the difficulty in funding enough new wells.
Coal
The coal industry is in many ways similar to the oil and natural gas industry. The companies that can be expected to fare best in the credit crunch are large companies, with low-cost mines and significant cash flow from current operations. These companies will be able to use their cash flow to finance future capital expenditures. Companies that depend heavily on debt and smaller service companies will have difficulty obtaining credit. Some of these companies may seek to merge with major coal companies.
As with oil and natural gas, the price of coal has dropped recently as a result of reduced demand associated with the credit crisis. The lower price will make new investments less profitable than they would otherwise have been. This will act as a deterrent to opening new mines, particularly in higher-cost areas.
The infrastructure used for transporting coal is primarily railroads and barges, plus some trucks. With the credit crisis, it is likely to be difficult to obtain funding to upgrade this infrastructure. The lack of new infrastructure will act as another deterrent to growth of the cola industry.
Prior to the recent credit crisis, there were about a dozen Coal-to-Liquid (CTL) plants in some stage of the planning process. The products made at these plants were intended to compete with gasoline or diesel. Now these plans are being re-evaluated because at an oil price of $60 barrel or less, the cost of CTL is no longer competitive.
Ethanol and other Biofuels
Ethanol is another product intended to compete with gasoline. When oil prices were high, and adequate subsidies were in place, ethanol producers did well. Now that both oil and corn prices are down, both farmers and ethanol producers are having difficulties.
The US’s largest ethanol producer, Verasun, recently sought bankruptcy protection, and there are a number of smaller companies near bankruptcy. The New York Times reports, “The industry should be consolidated — I think everybody believes that,” said Mr. Horowitz of Soleil. “But who is going to finance anything right now, let alone a very low-margin business that doesn’t look like it’s going to get better in the near term?”
Ethanol in Brazil is encountering difficulties as well. The sector is highly leveraged. Projects which already have been funded will continue, but there is a question whether funds for new investment can be found, especially in light of the low price for gasoline. Mergers may occur because the credit crisis makes some of the projects easy takeover targets.
Ethanol from non-food sources (called cellulosic ethanol) is not at this point cost-competitive with corn or sugar based ethanol. Producers have been hopeful that additional funding for their research might become available, so as to try to lower production costs. This is looking less and less likely, with the credit crisis. In the US, President-Elect Barack Obama has indicated that some of his plans for energy investment may have to be scaled back, because of the $700,000 billion bailout of financial markets. Lower prices for gasoline make cellulosic ethanol even less cost competitive, discouraging new investment.
In the European Union, biofuel goals were recently pared back, so it is not as clear how much of the lessened growth in production is lowered goals, and how much is the impact of the credit crisis. Last year, the goal for biofuel production was set at 10% by 2020, but in September 2008 this was pared back to 5% of transport fuels by 2015. There is still a goal of 10% by 2020, but this is to be reviewed in 2014 depending on scientific progress.
Wind, Solar, and Geothermal
Wind, solar, and geothermal are all renewable sources of electricity. They are intended to be replacements for electricity generated by fossil fuels, partly because of climate change issues and partly to foster energy independence. Since these are long-term goals, cost is also an issue. When the price of oil and natural gas was high, there appeared to be cost savings, but these disappear when fossil fuel prices drop.
These renewable energy companies have been hit very hard by the credit crisis. Most used considerable leverage and were growing rapidly before the crisis. The credit crisis has dried up funding drying up, so new projects are off substantially.
One of the issues is that in Europe, investment in wind and solar was pushed along by climate change legislation. Now, with the financial crisis, countries are backpedalling on their promises. Back in March 2007, the European Union members pledged to cut greenhouse-gas emissions 20% below 1990 levels by 2020. Now that the costs are clearer, and the economies are running into financial difficulties, both Germany and Italy are saying that these goals are unrealistic.
In Great Britain, climate-change goals have recently been raised. Large projects backed by the larger utilities seem to be safe, but more speculative projects are running into trouble, because of the difficulty in obtaining financing. The Times quotes Ian Whitlock, a partner of Ernst & Young specializing in utilities as saying, “The market has definitely tightened up. The lending rates over Libor and the covenants on renewable energy deals in particular are being toughened up.”
In the US, wind energy has been hit very hard. Prior to the credit crisis, the top financers of wind energy included Lehman Brothers, AIG, JP Morgan, and GE Energy Financial. As a result of the credit crisis, these organizations are less able to lend. Congress recently extended a 2.1 cents per kilowatt hour tax credit, but this doesn’t seem to be working, partly because the banks who would normally invest in wind energy are not themselves very profitable, so get little benefit from the tax credit, and partly because of concern that the wind energy will not be very profitable, and therefore have difficulty paying back the loans.
The situation in the US for solar and geothermal is similar to that for wind. German solar-power company Schott Solar AG, for example, called off a $900 million initial public offering earlier this month, citing poor market conditions. While the US Congress extended solar tax credit for eight years rather than one, it is of limited benefit to banks and other investors who are currently not profitable.
According to Forbes, “While the good news is that solar technology is poised to continue its impressive growth streak, the bad news is that a perfect storm is on the horizon as a wave of supply converges with diminishing government subsidies and a very chilly credit market. This will require solar manufacturers to reduce prices to compete and could spell trouble for smaller module makers or companies overly reliant on credit to operate.”
Nuclear
Even nuclear seems to be hitting headwinds with the current credit crisis.
First, with the credit crisis, it is more difficult to finance new nuclear power plants and other infrastructure. We read, “Funding ‘Iffy’ for Uranium Enrichment Plant”. The article indicates that US’s only provider of enriched uranium, USEC Inc., wants to build a new $3.5 billion facility, but cannot get public marketing financing, given the current market situation. It is hoping to get a Department of Energy loan guarantee.
Second, the spot price of uranium has dropped by more than half. While most production is sold on long-term contracts, rather than in spot markets, this, together with the lack of credit, is inhibiting new investment. Cameco, the largest uranium producer in the world, reports, “Growth will take place but at a slower and more measured pace. We will look for opportunities to reduce costs and defer projects that cannot be funded internally.”
One new South African mine, which was still in pre-commercial production, has recently closed, partly due to declining uranium prices and rising costs of inputs. The company said it could not raise the required capital to fund development and subsequent production at the mine because of the global credit squeeze.
In the next few years, it is likely that uranium production will fall short of the amount needed by operating nuclear power plants worldwide. Currently, nuclear warheads are being processed, but the treaty covering this will expire in 2013, and will probably not be renewed. In addition, several mines will be reaching the ends of their lives in about the same timeframe, and new production requires eight to ten year lead times. At this point, it is likely already too late to bring enough production on to meet uranium needs in the 2013 to 2015 timeframe. The credit crisis will only make the situation worse.
I wrote this post about three weeks ago, and I don't think things have gotten much better since then. According to Merrill Lynch, the average junk bond yield is now greater than 20%. A recent Wall Street Journal article (behind pay wall) says, "The junk bond market has closed the door." The article indicates that in November, no new junk bonds were issued. It also indicates that about half of US corporations have below-investment-grade credit, and thus are being locked out of the market. It seems likely that quite a number of these companies are in the energy field.
Who will be the winners of 2009? According to Bloomberg, the prospects include Cisco Systems (CSCO), General Electric (GE) and Emcor Group (EMKR) as President-elect Barack Obama seeks to revive the U.S. economy.
Obama might follow a page from President Dwight Eisenhower’s playbook in the 1950’s when industrial giants like U.S. Steel Corp (X) and Caterpillar (CAT) were called upon to build huge infrastructure projects.
But now, technology companies will be the focus. Not only may the new administration repair bridges and tunnels, but technology companies may be called upon to rewire classrooms and libraries for high-speed Internet service. Other projects might include improving efficiency at hospitals and spending on alternative energy.
The president-elect’s team hasn’t put a number on the package yet, but Economist James Galbraith, an adviser to the Democratic Party, sees one of more than $900 billion.
From the Bull Pen: Nice relative performance in Cisco as well as many other players in the tech space. Cisco bulls can remain long the stock, a sell stop can be set below $16.
From the Bear Cave: $900 billion in additional spending? One can expect the dollar to suffer as a result. The bearish dollar fund (UDN) is an option; sell stops can be set two points from entry.
POT up nicely.....NYSE stock that has been way oversold like many others.
Good post! Thankyou.
Is Wall Street greed on holiday? No bonus for Thain.
Posted Dec 8th 2008 5:22PM by Peter Cohan
Filed under: Management, Merrill Lynch (MER)
This morning, Doug McIntyre posted that former Merrill Lynch CEO John Thain was demanding a $10 million bonus for his work there. But now CNBC is reporting that Thain won't be getting any bonus at all.
So far, details are not forthcoming but Charlie Gasparino, CNBC's On Air Edtior, reported that Thain, along with several other executives, will forgo bonuses this year. The Wall Street Journal is also reporting that according to people familiar with the matter, Thain, Merrill President Gregory Fleming and wealth management chief Robert McCann asked the board's compensation committee not to pay them for their work in 2008. So did two other Merrill executives.
Thain is being unfairly punished because the problems at Merrill happened under his predecessor Stan O'Neal. O'Neal walked away from the mountain of toxic waste he created with $161 million. He's the one who should be forking over a chunk of his compensation due to the problems he caused. To make Thain pay the price is unfair -- but politically expedient.
I spent the last 10 days in Aruba....
vacation. Did not make any trades, and watched very little of CNBC....The tourist economy is down 35% there, and depends heavily on Americans spending money. Also there is a large Valero refinery on the eastern end of the island. I used binoculars and counted at least 10 huge crude oil transports out in the ocean, each awaiting to offload. It looks as if the demand for oil is so slow that these ships are idle and acting as temporary storage for crude oil.
GLCC is being pumped by several news e-mails that I have got tonight.
Investors hunt for more clues about economy
Sunday December 7, 3:15 pm ET
By Joe Bel Bruno, AP Business Writer
Wall Street heads into uncertain week as auto bailout, economic data stoke fears
NEW YORK (AP) -- Wall Street heads into another turbulent week on Monday, with Congress still hammering out a bailout for automakers and investors having to digest more data expected to show the economic malaise deepening.
Investors received no respite to worries about the economy over the weekend, with President-elect Barack Obama declaring on Sunday that the situation is destined to get worse before it gets better. Major U.S. stock indexes fell last week after a series of economic reports left little indication that the recession is easing.
Chief among investors' economic worries during the next few days will be the fate of Ford Motor Co., General Motors Corp., and Chrysler LLC. The three automakers are seeking $15 billion in short-term aid from Washington to stave off bankruptcies that would lead to a flood of job losses.
Obtaining the aid might come in exchange for the heads of the companies' top executives. Sen. Chris Dodd, a Democrat who chairs the Senate Banking Committee, said Sunday that Rick Wagoner, GM's chief executive, "has to move on." He also said Chrysler should give up its independence and be acquired by another company.
But the negative news facing Wall Street might not actually send stocks plunging this week. There's a growing sense among many investors that disappointing corporate reports and economic data might give the government incentive to pass a bailout for Detroit, and also lead to lower interest rates and even a new stimulus package.
Thomas J. Lee, equities analyst at JPMorgan, said Wall Street has already factored in much of the negative news about the faltering economy and sluggish corporate profit growth. On Friday, the Dow Jones industrial average gained 259 points despite a Labor Department report that showed the nation lost more than a half a million jobs last month.
"You're not going to have another big jobs report until January," Lee said, noting that Friday's jobs report was the big piece of data for the month. "Everything now is more or less confirming what we already know."
There will be no shortage of data this week. The Labor Department will issue its weekly report on unemployment on Thursday, with the number of first-time claims likely to be above 500,000 for a fourth-straight week.
The Commerce Department will follow on Friday with its report on retail sales, a closely watched gauge considering that consumer spending drives more than two-thirds of the U.S. economy. The government is expected to report that sales fell in November for a fifth-straight month, despite a surge of shoppers over the Thanksgiving weekend.
Other economic reports include the University of Michigan's consumer sentiment index and the Labor Department's Producer Price Index.
The market has been able to claim a victory of sorts when it comes to absorbing negative economic news. Except for a 680-point drop in the Dow last Monday, stocks have repeatedly been able to overcome bleak economic data and corporate announcements.
Any advance in stocks would be seen as a sign that stability is returning to Wall Street. Friday's gain was the eighth for the Dow in 10 sessions, but stocks still finished lower for the week.
The Dow fell 2.2 percent, the Standard & Poor's 500 index lost 2.3 percent, and the Nasdaq composite index shed 1.7 percent.
The next few weeks might also shed some more light on how companies are faring during the fourth quarter, and that could trigger big swings for the market. In preparing to report fourth-quarter results in January, many companies might begin to issue warnings about their results.
Last week, a number of companies -- including Merck & Co. and DuPont -- trimmed guidance for what is expected to be another gloomy quarter.
And others might come this week. Earnings are expected from a number of major companies, including H&R Block Inc., AutoZone Inc., Kroger Co., and Costco Wholesale Corp.
Investors will also start to look for signs about what kind of losses financial companies like Goldman Sachs Group Inc. and Morgan Stanley might report.
Ryan Larson, head of equities trading at Voyageur Asset Management, said many on Wall Street are keeping a close eye on financial stocks to help gauge any recovery for the market and the economy. For instance, Hartford Financial Services Group Inc. raised its full-year operating profit forecast and said the capital outlook at its insurance units was strong.
"The longer we can go without banks continuing to need to raise capital every single day, that's going to be a good thing," Larson said.
While some companies continue to tough out a brutal economy, others might turn toward dealmaking to weather the recession. There was speculation over the weekend that Deutsche Boerse AG, which runs the Frankfurt stock exchange, was in talks with NYSE Euronext about a possible deal.
The German bourse said late Sunday that any talks with the New York Stock Exchange, which also operates Paris-based Euronext, has "ended without any conclusion." A spokesman for the NYSE would not comment.
I bet his DVD is hilarious.
Snow, I found this from J. Peter Lynch:
With a new industry like solar the longer term leaders are generally the companies with some form of competitive advantage or product differentiation. Remember these companies may have innovative products, but they must also pass the first two hurdles (cash and relative strength) in order to warrant further consideration as an investment. Five examples of this (not necessarily “official” recommendations) are listed below with their respective “differentiator” to give you a better idea of what I am referring to:
First Solar (FSLR) – low cost market leader in the thin film sector
SunPower (SPWRA) - highest efficiency product, therefore potential leader in the space constrained residential market segment.
Energy Conversion Devices (ENER) – unique product, with high margins in the flexible PV market segment.
SunTech (STP) – low cost producer in the crystalline PV market segment.
Emcore (EMKR) – one of only two producers of very high efficiency PV cells for the Concentrating PV (CPV) market segment.
Remember that even though this MAY BE a generational buying opportunity in the general market and the solar sector you should always consider this as higher risk money and money that you can afford to potential lose and also be money that you can be patient with and allow the situation to work itself out over time.
Mr. Lynch has worked, for 31 years as an independent analyst and investor in small emerging technology companies. He has been actively involved in following developments in the renewable energy sector since 1977 and is regarded as an expert in this field. He was the contributing editor for the past 17 years to the Photovoltaic Insider Report, the leading publication in Photovoltaics industry that was directed at industrial subscribers, such as major energy companies, utilities and governments around the world. He can be reached via e-mail at: solarjpl@aol.comThis e-mail address is being protected from spambots. You need JavaScript enabled to view it or at his new website: www.sunseries.net.
EMKR up 40% today.
Intel owns 5.7% of shares.
Insiders accumulating shares.
Check this out:
Accolades to Emcore Solar
Source/Type: CompoundSemi Online - Editorials - Editorials
Author: Jo Ann McDonald, founding editor
November 26, 2008... The pioneering independent and proven leader in the compound semi-based terrestrial solar business is Emcore of Albuquerque, New Mexico USA. Leading a relatively quiet corporate existence recently, contrary to its early days as a MOCVD equipment innovator, Emcore has earned its way back to center stage with the recent announcement that the company has deployed its first major concentrator photovoltaic (CPV) system, lending hope to us all that CPV is real, it's here, and it's now.
And what a deployment it is! These are two old pro companies headed in the right new directions. The Emcore CPV system is going into the XinAo Group Company Limited's new solar energy unit in Langfang City, in the Hebei Province of Northern China. XinAo, which was founded in 1989 (just six years after Emcore was founded in Somerset, New Jersey) was known as the Langfoang Xiali Car-hire Company until 1997 (which was the year Emcore went public on the USA's Nasdaq stock exchange). As XinAo Group, the company is primarily engaged in the development, exploitation, and distribution of natural gas and energy related chemicals and, like so many such "old style" energy companies are saying they're considering, XinZo appears to actually be turning to terrestrial solar as a preferred cleaner, more renewable energy source.
According to a BusinessWeek profile, in April the company announced that it planned to initially pour CNY 1.4 billion into the new solar plant and invest an additional CNY 10 billion to enlarge the capacity to 5 megawatt within the next five years. Apparently it's right on schedule. XinAo's potential target consumers for their solar energy products are domestic power producers. As inducement, there's evidently a Chinese government requirement that the country's five largest power producers have their renewable energy account for 5% of the total fuel portfolio. As further motivation, Xinao Group (one of those big five) plans to spin off its solar energy unit to go public on the stock market within the next few years. Given the tremendous energy challenges China faces, let's hope that 5% number increases significantly as quickly as possible.
Also... and not so coincidentally, Emcore China is also located in Langfang City. And I imagine the fact that Dr. Hong Q. Hou, Emcore's CEO, originally hails from mainland China helps as well. Hong received his BS from the famed Jilin University prior to moving to the USA where he received his Ph.D in Electrical Engineering from the University of California at San Diego, subsequently going to Sandia National Labs and VCSEL fame prior to joining Emcore in 1999. Hong, who is a totally nice guy with an infectious enthusiasm is widely regarded as one of our industry's most gifted scientists and he's proving to also be one of the CS industry's stellar top executives.
News of the CS solar system deployment to the XinAo plant was announced by Emcore November 24th (ref: our coverage for details). The 50 kilowatt (kW) initial test and eval system is already fully installed and operational and already producing power and meeting specs. And this appears to just be the beginning of the relationship as Emcore and XinAo are said to be in ongoing discussions regarding the possible construction of a joint-owned plant in China to manufacture CPV systems that are designed and certified by Emcore for innovative coal gasification projects for the Chinese market. If you want to catch up on what these systems are all about, click on the Terrestrial Solar Cells & Receivers section of the Emcore website at www.Emcore.com. These are the latest iteration of Emcore's famed compound semi-based Concentrating Triple Junction (dubbed "CTJ") solar cells, which have a n-on-p polarity built on germanium substrates and incorporate an antireflective coating to provide low reflectance over a wavelength range of 0.3 to 1.8µm. These are especially high-efficiency cells characterized and optimized specifically for terrestrial applications under concentrated incident illumination (up to what's referred to as "1500 Suns") and high current densities.
A good way to find out more about all this, and other advancements at Emcore, is to tune in to their Q-4/year end earnings report, which will take place live on Thursday, December 11, 2008 at 9:00am EST. USA callers should dial (toll free) 866-710-0179 and international callers should dial 334-323-9871. The access code for the call is 59629. Note that only analysts should actually participate in the call, but anyone can listen in. Or you can simply tune in online via www.emcore.com for the live event, and where a replay will be accessible until Dec. 18th.
In conclusion, you might ask why I'm making such a big deal about this and encouraging wider understanding and participation. The answer is simple. I truly believe that this is the direction all conventional energy product companies should be headed, which is toward environmentally friendly, clean, renewal energy sources, specifically CS solar. So listen, read... and learn. Then get on the CS solar bandwagon. It's where every country's energy interests should be headed.
Trail, I am in TCK as well...what a nice ride!
I bought into EMKR.....nice upside run today.
One of these days SOON is going to be a RUNNER.
Everybody have a nice Thanksgiving!!!!!
Intel has a 5.7% stake in EMKR.
Insiders are buying EMKR.
EMKR up 40% today.
Check this out:
Accolades to Emcore Solar
Source/Type: CompoundSemi Online - Editorials - Editorials
Author: Jo Ann McDonald, founding editor
November 26, 2008... The pioneering independent and proven leader in the compound semi-based terrestrial solar business is Emcore of Albuquerque, New Mexico USA. Leading a relatively quiet corporate existence recently, contrary to its early days as a MOCVD equipment innovator, Emcore has earned its way back to center stage with the recent announcement that the company has deployed its first major concentrator photovoltaic (CPV) system, lending hope to us all that CPV is real, it's here, and it's now.
And what a deployment it is! These are two old pro companies headed in the right new directions. The Emcore CPV system is going into the XinAo Group Company Limited's new solar energy unit in Langfang City, in the Hebei Province of Northern China. XinAo, which was founded in 1989 (just six years after Emcore was founded in Somerset, New Jersey) was known as the Langfoang Xiali Car-hire Company until 1997 (which was the year Emcore went public on the USA's Nasdaq stock exchange). As XinAo Group, the company is primarily engaged in the development, exploitation, and distribution of natural gas and energy related chemicals and, like so many such "old style" energy companies are saying they're considering, XinZo appears to actually be turning to terrestrial solar as a preferred cleaner, more renewable energy source.
According to a BusinessWeek profile, in April the company announced that it planned to initially pour CNY 1.4 billion into the new solar plant and invest an additional CNY 10 billion to enlarge the capacity to 5 megawatt within the next five years. Apparently it's right on schedule. XinAo's potential target consumers for their solar energy products are domestic power producers. As inducement, there's evidently a Chinese government requirement that the country's five largest power producers have their renewable energy account for 5% of the total fuel portfolio. As further motivation, Xinao Group (one of those big five) plans to spin off its solar energy unit to go public on the stock market within the next few years. Given the tremendous energy challenges China faces, let's hope that 5% number increases significantly as quickly as possible.
Also... and not so coincidentally, Emcore China is also located in Langfang City. And I imagine the fact that Dr. Hong Q. Hou, Emcore's CEO, originally hails from mainland China helps as well. Hong received his BS from the famed Jilin University prior to moving to the USA where he received his Ph.D in Electrical Engineering from the University of California at San Diego, subsequently going to Sandia National Labs and VCSEL fame prior to joining Emcore in 1999. Hong, who is a totally nice guy with an infectious enthusiasm is widely regarded as one of our industry's most gifted scientists and he's proving to also be one of the CS industry's stellar top executives.
News of the CS solar system deployment to the XinAo plant was announced by Emcore November 24th (ref: our coverage for details). The 50 kilowatt (kW) initial test and eval system is already fully installed and operational and already producing power and meeting specs. And this appears to just be the beginning of the relationship as Emcore and XinAo are said to be in ongoing discussions regarding the possible construction of a joint-owned plant in China to manufacture CPV systems that are designed and certified by Emcore for innovative coal gasification projects for the Chinese market. If you want to catch up on what these systems are all about, click on the Terrestrial Solar Cells & Receivers section of the Emcore website at www.Emcore.com. These are the latest iteration of Emcore's famed compound semi-based Concentrating Triple Junction (dubbed "CTJ") solar cells, which have a n-on-p polarity built on germanium substrates and incorporate an antireflective coating to provide low reflectance over a wavelength range of 0.3 to 1.8µm. These are especially high-efficiency cells characterized and optimized specifically for terrestrial applications under concentrated incident illumination (up to what's referred to as "1500 Suns") and high current densities.
A good way to find out more about all this, and other advancements at Emcore, is to tune in to their Q-4/year end earnings report, which will take place live on Thursday, December 11, 2008 at 9:00am EST. USA callers should dial (toll free) 866-710-0179 and international callers should dial 334-323-9871. The access code for the call is 59629. Note that only analysts should actually participate in the call, but anyone can listen in. Or you can simply tune in online via www.emcore.com for the live event, and where a replay will be accessible until Dec. 18th.
In conclusion, you might ask why I'm making such a big deal about this and encouraging wider understanding and participation. The answer is simple. I truly believe that this is the direction all conventional energy product companies should be headed, which is toward environmentally friendly, clean, renewal energy sources, specifically CS solar. So listen, read... and learn. Then get on the CS solar bandwagon. It's where every country's energy interests should be headed.
#1 stock on the Nasdaq for 2008 gains....
EMKR is what Tobin Smith( FOX - BULLS & BEARS ) picked in January to be best performing stock......At the time EMKR was $15. and some change.
It looked very promising...BUT ended up down below $2.00/share.
TODAY IT CLOSED UP 40%.
CHECK THIS OUT:
Accolades to Emcore Solar
Source/Type: CompoundSemi Online - Editorials - Editorials
Author: Jo Ann McDonald, founding editor
November 26, 2008... The pioneering independent and proven leader in the compound semi-based terrestrial solar business is Emcore of Albuquerque, New Mexico USA. Leading a relatively quiet corporate existence recently, contrary to its early days as a MOCVD equipment innovator, Emcore has earned its way back to center stage with the recent announcement that the company has deployed its first major concentrator photovoltaic (CPV) system, lending hope to us all that CPV is real, it's here, and it's now.
And what a deployment it is! These are two old pro companies headed in the right new directions. The Emcore CPV system is going into the XinAo Group Company Limited's new solar energy unit in Langfang City, in the Hebei Province of Northern China. XinAo, which was founded in 1989 (just six years after Emcore was founded in Somerset, New Jersey) was known as the Langfoang Xiali Car-hire Company until 1997 (which was the year Emcore went public on the USA's Nasdaq stock exchange). As XinAo Group, the company is primarily engaged in the development, exploitation, and distribution of natural gas and energy related chemicals and, like so many such "old style" energy companies are saying they're considering, XinZo appears to actually be turning to terrestrial solar as a preferred cleaner, more renewable energy source.
According to a BusinessWeek profile, in April the company announced that it planned to initially pour CNY 1.4 billion into the new solar plant and invest an additional CNY 10 billion to enlarge the capacity to 5 megawatt within the next five years. Apparently it's right on schedule. XinAo's potential target consumers for their solar energy products are domestic power producers. As inducement, there's evidently a Chinese government requirement that the country's five largest power producers have their renewable energy account for 5% of the total fuel portfolio. As further motivation, Xinao Group (one of those big five) plans to spin off its solar energy unit to go public on the stock market within the next few years. Given the tremendous energy challenges China faces, let's hope that 5% number increases significantly as quickly as possible.
Also... and not so coincidentally, Emcore China is also located in Langfang City. And I imagine the fact that Dr. Hong Q. Hou, Emcore's CEO, originally hails from mainland China helps as well. Hong received his BS from the famed Jilin University prior to moving to the USA where he received his Ph.D in Electrical Engineering from the University of California at San Diego, subsequently going to Sandia National Labs and VCSEL fame prior to joining Emcore in 1999. Hong, who is a totally nice guy with an infectious enthusiasm is widely regarded as one of our industry's most gifted scientists and he's proving to also be one of the CS industry's stellar top executives.
News of the CS solar system deployment to the XinAo plant was announced by Emcore November 24th (ref: our coverage for details). The 50 kilowatt (kW) initial test and eval system is already fully installed and operational and already producing power and meeting specs. And this appears to just be the beginning of the relationship as Emcore and XinAo are said to be in ongoing discussions regarding the possible construction of a joint-owned plant in China to manufacture CPV systems that are designed and certified by Emcore for innovative coal gasification projects for the Chinese market. If you want to catch up on what these systems are all about, click on the Terrestrial Solar Cells & Receivers section of the Emcore website at www.Emcore.com. These are the latest iteration of Emcore's famed compound semi-based Concentrating Triple Junction (dubbed "CTJ") solar cells, which have a n-on-p polarity built on germanium substrates and incorporate an antireflective coating to provide low reflectance over a wavelength range of 0.3 to 1.8µm. These are especially high-efficiency cells characterized and optimized specifically for terrestrial applications under concentrated incident illumination (up to what's referred to as "1500 Suns") and high current densities.
A good way to find out more about all this, and other advancements at Emcore, is to tune in to their Q-4/year end earnings report, which will take place live on Thursday, December 11, 2008 at 9:00am EST. USA callers should dial (toll free) 866-710-0179 and international callers should dial 334-323-9871. The access code for the call is 59629. Note that only analysts should actually participate in the call, but anyone can listen in. Or you can simply tune in online via www.emcore.com for the live event, and where a replay will be accessible until Dec. 18th.
In conclusion, you might ask why I'm making such a big deal about this and encouraging wider understanding and participation. The answer is simple. I truly believe that this is the direction all conventional energy product companies should be headed, which is toward environmentally friendly, clean, renewal energy sources, specifically CS solar. So listen, read... and learn. Then get on the CS solar bandwagon. It's where every country's energy interests should be headed.
Hey Rain, Is Peter Schiff an Orange County
neighbor of yours? After reading this article, I believe we should sell off Alaska to pay up on our huge debt....LOL....Goodbye Sarah!
http://www.321gold.com/editorials/schiff/schiff112408.html
I bought in TCK today.
$3.70/share.
Nice MF article:
http://www.fool.com/investing/value/2008/11/24/fearful-stocks-for-greedy-investors.aspx
TCK...GOLD..ETC. for greedy investors:
Nice MF article on TCK:
http://www.fool.com/investing/value/2008/11/24/fearful-stocks-for-greedy-investors.aspx
Freudian slip...LOL...I feel like a patient
holding these shares until announcement is forthcoming.
3.6 trillion dollars in credit default swaps.
Let's see if that number is mentioned in tonights special.