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Monday, March 02, 2015

Monday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. The watchword for NASDAQ is now "exhaustion" after a run back to 5000.

Miami: Drowning As It Sinks Into The Ocean

Sometimes reality is far stranger than fiction. The Guardian points an accusatory finger at America's climate deniers:
Low-lying south Florida, at the front line of climate change in the US, will be swallowed as sea levels rise. Astonishingly, the population is growing, house prices are rising and building goes on. The problem is the city is run by climate change deniers.
Sounds like a short-selling opportunity for properties soon to be underwater.

Sunday, March 01, 2015

Rapid Global Warming Beginning Now

The so-called “hiatus” in global warming is over. In fact, it was never there at all.

What was happening was the excess heat generated by human burning of fossil fuels was being absorbed by the oceans, mostly the Pacific Ocean. This left air temperatures stable for about a decade and a half. And, gave the criminal deniers chances to declare global warming a hoax.

But, now, the true source of the false-hiatus is known: the Pacific Decadal Oscillation was the reason why air temperatures have been relatively stable. And, now, the PDO is ending and it's sending global air temperatures higher. 2014 was the hottest year on record. And, January 2015 was the second warmest January on record as well.

Warmth is being rapidly pumped into the air over the Pacific Ocean. The rate of temperature rise on the planet is likely to double over the next several decades, making it impossible for the world to stay below the 2° warming it had set as a limit to catastrophic warming.

What we need to do now is to shutdown all fossil fuel burning as soon as possible. It's not getting any cooler in here and we're set to really cook the planet in the years ahead.

Heroin Creator: We'll Sue Over Bee Pesticides

Bayer, the inventor of heroin, is threatening to sue environmental organizations over their opposition to bee pesticides. SumOfUs.org reports, “We’ve just received a letter from a major corporate agribusiness firm threatening legal action unless we stop our campaign to save the bees.” Apparently, SumOfUs's campaign against pesticides which are killing bees is making headway.

Friday's Results In The Wall Street Bucket Shops

#SubscriberNotes #WeekendAnalysis have been updated on the website. A dip to refresh? Yes.

Saturday, February 28, 2015

Batteries Need To Triple Capacity

For batteries to make sure electric vehicles eliminate fossil fuel ones, Stanford's Yi Cui says that:
Right now, batteries cost about $300 per each kiloWatt-hour of capacity. For the two largest use cases (electric vehicles and on-grid storage), we need that figure to drop to about $100 per kW-hr in order for the technology to compete with fossil-fuel-powered cars and generating facilities. For the grid, where the batteries are stationary, it doesn't matter how much they weigh. But for a more effective electric vehicle, we'd like to see the energy density rise from its present 200 W-hr/kg to about 600 W-hr/kg.
That's tripling the capacity while cutting the price by two-thirds. A pretty tall order.

Not too tall. Batteries with even higher capacity are on the way. Stay tuned. ICE (Internal Combustion Engines) are dinosaurs soon to be scrapped and mostly forgotten. Along with oil companies, auto manufacturers (most of them) and many other relics of the technological past. We're approaching a new Golden Age of Cheap Energy.

Thursday, February 26, 2015

Thursday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. The leader of the leader bears watching as it heads for our measured move target price.

Wednesday, February 25, 2015

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Signs of equity weakness continue to setup the next buying opportunity—as bonds bounce.

Will Apple Buy Tesla?

On first glance, it doesn't seem likely. But, there are actually some great arguments in favor of this deal happening.

First of all, Apple has a cash war chest that needs to be invested in the next big product after iPhone. Otherwise, the stock could be hitting a wall where margins fall due to market saturation.

Where are we heading in terms of the next big product out of Silicon Valley? As we've written in recent articles, the autonomous electric car is the next big thing. So, while Apple could certainly build a car company from scratch, buying an existing company really makes a lot of sense—and timing could be critical since many other auto manufacturers are working on their own autonomous cars. Whoever gets to market first with a complete product is going to take home all the marbles.

Elon Musk has stated that his shares in Tesla would be the last to be sold. But, if he feels that the future of autos is safe in Apple's hands, then he might just recommend that Tesla's shareholders sell to Apple. Certainly, Tesla is going to need a huge war chest to scale up production. And, it's going to need the best and brightest to engineer the first truly autonomous car. Apple has been poaching Tesla's designers by offering to boost their salaries by 60% and include a quarter-million-dollar signing bonus. Joining forces could ease the salary pressure on both companies.

It all comes down to Elon's assessment of whether Apple could carry the torch to the ultimate goal.

Tuesday, February 24, 2015

Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. The equity uptrend is getting very weak now. Will the bubble leader peak out?

Apple Paying Up To Poach Tesla Employees

Elon Musk reveals how much Apple is offering Tesla employees to jump ship reports that Apple is offering Tesla employees a 60% increase in pay and a quarter million dollar signing bonus to jump ship and build a car for Apple.

This illustrates just how important it has become to be a leader in the new era of electric, autonomous cars. In fact, Apple is betting that they will be able to repeat the success of the iPhone in automobiles.

It also points up the price of failure. Any existing car maker that isn't going full bore into electric, autonomous cars is simply going out of business in the long term.

Monday, February 23, 2015

Monday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Equities in stasis, but the biggest moth is moving close to a candle!

Sunday, February 22, 2015

As Battery Costs Fall, Australia Is a Test Case for Grid Defection

Jason Deign writes:
Australia has some of the highest electricity prices in the world due to an overbuild of network infrastructure. Could falling battery costs cause increasing numbers of customers to abandon the system altogether?
Solar power installers in the country say the cost of batteries is the only thing holding back more widespread consumer grid defection in the residential sector.
Australia is already in the midst of a rooftop solar boom as grid customers look to offset the rising cost of utility power.
Almost one-fifth of Australian households now use solar panels for electricity or hot water, tempted by three- to four-year payback times and national rebates that reduce the upfront cost of a PV system.
The rebate is one of a number of renewable energy support systems under threat from the current administration.
An elimination of the PV subsidy could add a couple of thousand dollars to the price of a typical residential solar power system, which currently costs between around AUD $5,000 (USD $3,890) and $10,000 (USD $7,790) for a 5-kilowatt setup.
For now, attempts to cut back on Australia's renewable energy commitments have been met with spirited opposition, leading utilities to resort to other measures to keep customers on the grid.
...
"Once the battery technology improves and becomes more readily available, then I think there will be a certain tipping point. I'm convinced of it," said Paul Thompson, who runs an installation business called Green Sun Solar in Perth. "I speak to a lot of people, and they would be extremely happy if they could give the middle finger to the power companies. I think people would love to go completely off-grid or hybrid, but it boils down to [battery] price," he said.
Thompson said he sees a lot of interest from consumers, but once they find out the price, "they back off a bit."
Nevertheless, he said, even the elimination of solar power subsidies likely would not be enough to halt Australia's growing trend toward reducing grid-based consumption, and possibly grid defection.
Even as the economics of batteries and solar improve, the lifestyle adjustment needed to defect from the power system may be too great for consumers. But some analysts are warning utilities in Australia that they should expect some consumers to consider the option.

The Falling Solar Price Curve

In 1931, Thomas Edison said, “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”

Here we are, 84 years later. Let's take a look at the solar price curve. In 1970, 39 years after Edison's remark, the cost of solar cells needed to produce one watt of electricity cost $100. By 2013, the cost had dropped to 65¢/W. By 2020, the cost is expected to drop to 22¢/W. In other words, within five years from today, solar arrays will have improved their cost basis by 455 times. At the same time, fossil fuels will have become more expensive to extract and are still today, even after the drop of the last year, five times more expensive than they were at the close of the last century. And, remember, once the solar array has paid back its installation and maintenance costs, the marginal cost of electricity is zero—solar power is essentially free for the remaining lifetime of the array (about 50 years).

When investors sell solar stocks just because oil and gasoline have been halved in price, they should consider that gasoline would have to drop well below 1¢ per gallon in order for it to regain its 1970 competitive edge compared to solar power.

Friday's Results In The Wall Street Bucket Shops

#SubscriberNotes #WeekendAnalysis have been updated on the website. A bigger pothole lies ahead in equities.

Saturday, February 21, 2015

Let's Make BP Pay

British Petroleum (BP) caused at least $18 Billion in damages when its Deepwater Horizon exploded and gushed oil for months into the Gulf of Mexico. Now, BP says it can't afford to pay for the damages.

As you know the oil industry will be out of business within the next 15 years. We need to demand that BP pay up now because if they drag this debt into the future, there will not be any money left to pay for the damages. Last year, BP distributed $23 Billion in dividends to its shareholders. Obviously, they have the money. Now it's time to pay. If we let BP wriggle off the hook, they will eventually not have to.

Sign the petition now!

Thursday, February 19, 2015

Industries Going the Way of the Dodo Bird By 2030

It's interesting to realize that some of the leading industries today will cease to be big players at some point in the next 15 years. They will either be gone (like buggy whip manufacturers) or too decimated to play a big role. Here are some of those industries:

  1. Automobile manufacturers. Most will go bankrupt due to autonomous cars. Ride-sharing tends to reduce the number of vehicles on the road by 93%. Car ownership by individuals will disappear—most cars will be summoned via phone app, drive to your current location, pick you up and deliver you to your destination, then move on to their next assignment. Most cars today are used less than 10% of the time, and are very expensive compared to incomes. We don't need so many cars on the road. This also means that new highway construction will be decimated as well because we will have too many lanes for the traffic (autonomous cars will use lane space more efficiently).

  2. The oil industry will virtually disappear as electrics become dominant. An electric motor is 5 times as efficient as an Internal Combustion Engine (ICE). With the number of cars needed being reduced by about 90%, ICE will disappear gradually (except maybe in Cuba, where they will last 50 years). The need for oil will be decimated as well since the only good uses remaining for it are in fertilizers, plastics and pesticides.

  3. The nuclear power industry will bite the dust finally. Too dangerous and no one wants to insure them against catastrophic risks which will run into the $Trillions.

  4. Service stations and auto parts stores will be rarities in 2030. Electric cars need far less service than ICE cars and use far fewer parts which need to be replaced.

  5. Insurance companies. 85% of auto accidents are due to human error. Autonomous cars will have far fewer accidents. This will lead to rock bottom insurance rates and the death of most auto insurance companies.

  6. Electric utilities will go bankrupt because they won't realize until it's too late that they can never pay back the bonds used to construct conventional power plants. Solar will become the dominant source of energy by 2030 and crush virtually all other forms of energy. The public will go off-grid in a very big way, leaving a customer base too small for utilities to serve profitably.

Thursday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. End of the uptrend? Yes, for now.

Wednesday, February 18, 2015

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. How does the lead dog index hold up seasonally? We have the answer tonight.

The Slow Decline of Electric Utilities

Some investors like to buy electric utility stocks for their dividend yield, thinking that their government-mandated monopoly position makes the capital investment “safe.” Nothing could be further from the truth and such investors may finally be realizing they are investing in something like the Titanic as it heads for the iceberg.

Tony Seba in Clean Disruption of Energy and Transportation: How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utilities and Conventional Cars Obsolete by 2030 makes an important point:

The conventional landline telephone companies did not die. When the world adopted mobile phones in the early 1990s, most people kept their landlines as a backup. But as the quality of cell phones improved and users got comfortable with them, they unplugged their landline phones. Users who grew up with cell phones never made the acquaintance of the landline. Developing countries that had no landline infrastructure to speak of just leapfrogged to a mobile communications infrastructure.

During the current distributed solar disruption wave, homes and businesses will use the utilities as a battery backup—an expensive but necessary backup. Power utilities have existed for a century without having to compete for customers. This state of monopoly bliss is nearly over. Now the utility has to share the customer (or “rate payer”) with two technology-based, exponentially improving companies: the PV provider and the energy-management provider.

The power utilities will soon be experiencing a vicious cycle of lower demand and rising costs while the market provides lower costs and a higher quality of service.

The next wave of disruption will occur when electricity storage is cheap enough for users to store some of their daily production or usage. A convergence of technologies is lowering the cost of solar power and increasing the quality exponentially:

  • The cost of batteries is dropping and the quality of batteries is improving.
  • Intelligent energy management devices are making energy usage more efficient. These devices are enabled by rising quality and lower costs in machine learning software, sensors, and communications (think NEST).
  • Solar PV costs are dropping.
  • Utility costs are rising.

Most think that grid defection by the vast majority of electric users simply won't happen. But, then, what did they say about landline phone service when cell phones first appeared?

Tuesday, February 17, 2015

Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Weakness in a key sector is warning of a short term top in equities.

The Currency War Has Expanded to New Fronts

The Currency War Has Expanded to New Fronts

By Elliott Wave International

Editor's note: This article was adapted, with permission, from the February issue of The Elliott Wave Financial Forecast, a publication of Elliott Wave International. All data is as of Jan. 30, 2015. Click here to read the complete version of the article, including specific near-term forecasts, for free.

The "Currency War" we discussed in our October issue of The Elliott Wave Financial Forecast and again in the January issue has expanded to new fronts, as world central banks fought to remain economically competitive by trying to push down the value of their currencies.

Singapore became at least the ninth nation to "jump on the easing bandwagon" in January, employing loose monetary measures designed to reduce the value of the Singapore dollar.

Our long term bullish forecast for the U.S. dollar remains on track, and this month the Dollar Index jumped to 95.527, retracing 50% of its decline from 121.020 in July 2011 to 70.700 in March 2008.

Everyone Loves the Buck
Some chart labels have been redacted to preserve value for EWI's paying subscribers. To get access to the fully labeled chart, click here.

Short term, the rally is stretched like a taut piece of rope: Prices have closed higher for 30 out of the past 39 weeks. Recently, a 10-day average of a poll of currency traders (courtesy trade-futures.com) showed 93.7% dollar bulls, an all-time record high. Also, Large Speculators in futures and options, who are generally trend-followers, now hold an all-time record net-long position of 72,897 contracts, as shown on the above chart.

The extreme in these measures shows the strength of the rally but also reflects a trend that is ripe for a correction.

Click here to continue reading the complete version of the article as part of a lengthy excerpt from the newest issue -- including specific market forecasts, fully labeled charts and more -- 100% free.

This article was syndicated by Elliott Wave International and was originally published under the headline The Currency War Has Expanded to New Fronts. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Sunday, February 15, 2015

Friday's Results In The Wall Street Bucket Shops

#SubscriberNotes #WeekendAnalysis have been updated on the website. Trend up in equities. Potholes ahead, though.

Solar Will Be The Dominant Energy Source By 2030

The fossil fuel advocates are coming 'round to the notion that renewables will have to be a part of the energy mix in the future. For example, just Thursday, the head honcho at Shell Oil said his peers should stop their fight to put down renewables and join the fight against climate change. However, he also misstated the potential for solar to become the dominant source of energy, saying fossil fuels need to play a part. He's wrong and so are many who misanalyze the potential for solar, such as Gail Tverberg.

The fossil fuel advocates use a measure they call “Energy Return On Energy Invested”—variously abbreviated EROEI, EROI or ERoEI. On the measure solar appears to come up very short of what's needed to become the dominant energy source.

The problem is that EROI simply does not apply to renewable energy. It does apply to fossil fuels. The reason is simple: When a unit of energy from fossil fuels is burned, it produces a fixed amount of energy. Once the fuel is consumed, that's it, there's no more energy which can be produced from that amount of fuel. On the other hand, for renewables, the amount of energy which can be extracted from the environment is essentially infinite—for example, the sun will last many billions of years producing harvestable energy. The mechanism we use to extract energy from this infinite pool—a solar array—is the producer of energy output. A theoretical mechanism which would last forever would have an infinite EROI. In practice, of course, the mechanism has a finite life, but we can approximate the value of solar using the “Energy Payback Time” — (EPBT). This is the time it takes for the solar array to produce exactly as much energy as that energy required to build the array in the first place. Read more about this topic in Investing in Solar Electricity: What's the Payback? and How Solar Power Could Slay the Fossil Fuel Empire.

Today's solar arrays are warranted to produce 95% of their rated output over a 25-year lifetime. Studies have shown that, depending upon the type of solar cell technology used, the EPBT at which the solar array produces as much energy as it took to build the solar array ranges from 0.7 to 4 years. Thus, the most inefficient solar array would produce 6¼ times as much energy as it took to create it over its 25-year warranty. The most efficient array would produce output of almost 36 times over its 25-year warranty period. Consequently, if we want to compare EROI for solar arrays with EROI for fossil fuels, we get a large range of values for solar, from 6 to 36. This is why looking just at EROI for solar, which varies wildly, is a bad way to evaluate solar versus fossil fuels.

Solar arrays actually last longer than 25 years. As time goes by, the solar arrays produced are likely to last much longer. Thus, the EROI of solar will move much higher than the current maximum of 36 because the EPBT remains at least constant for a particular technology (in reality even EPBT for solar is dropping due to technological advances and that causes EROI to continue climbing). It's estimated that by the year 2020, new solar arrays will last 50 years or longer. The implied EROI for the most efficient array is likely to produce 100 times or more as much energy as it took to build the array with no end in sight to the rise in EROI.

So, the next time someone starts claiming that solar will never become a dominant source of energy because its EROI is inferior, just remember that solar's implied EROI is expanding due to better technology. At the same time, the EROI of fossil fuels is on a downward trajectory (this is something even the fossil fuel advocates admit is the case due to the fact that the easiest-to-extract fossil fuels have already been extracted).

Arthur Berman: Why Today's Shale Era Is The Retirement Party For Oil Production

A leading geologist delivers the hard facts in this podcast from Chris Martenson:

Saturday, February 14, 2015

Crashing Oil Prices Would Have Doomed an Independent Scotland

Last year we warned that although a Yes vote in the election to determine whether Scotland would go free from Great Britain would be a good idea, basing Scottish finances on North Sea oil was a very bad idea. This, in itself, probably swung the No votes into the majority.

As it turned out, an independent Scotland would be looking at a £15.5 billion hole in the national budget. And, it's all due to the price of oil having plummeted.

Our long term forecast for the price of oil is much lower than it is today. We'll probably see it rally back to near $70/bbl before we see the bottom—and it could take several years of trading range moves before the final low. But, anyone who intends to buy oil now and become rich had better look at the black hole Scotland barely missed falling into last year.

Goon Thug Cops in Alabama Paralyze Innocent Elderly Indian

Alabama seems to be vying for “armpit of the USA”—Paul Craig Roberts writes:
More ignorant gratuitous violence from Amerika’s goon thug cops who are a much worse danger to the public than are criminals. Americans would be safer without the police:
http://www.dailykos.com/story/2015/02/13/1364206/-VIDEO-released-showing-Alabama-police-paralyzing-innocent-grandfather-from-India-officer-arrested?detail=email.

Friday, February 13, 2015

The Sun Will Set on Big Oil

It's the beginning of the end of the oil and gas industry.

The realization that the sun is setting for this industry is demonstrated by a new book entitled Clean Disruption of Energy and Transportation: How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utilities, and Conventional Cars Obsolete by 2030 by Tony Seba. The switch to renewable energy and electric cars is inevitable—and coming fast.

The cost of electric autos will continue to decline while the cost of traditional ICE (Internal Combustion Engine) vehicles will continue to increase. This will make the switch to electrics something that cannot be stopped because the free market will win out over obsolete ICE versions.

Read more here.

Shell Boss van Beurden Urges Fight Against Climate Change

In a speech in London before fellow oil leaders, Shell Chief Executive Ben van Beurden urged the oil and gas sector to take a leading role in the fight against climate change to introduce "realism and practicality" into the debate.

While criticising peers for not being vocal enough over environmental issues, van Beurden rejected the idea that renewable energy can replace fossil fuels fully as the world's population grows and with it demand for energy.

Yes, climate change is real. And yes, renewables are an indispensable part of the future energy mix. But no, provoking a sudden death of fossil fuels isn't a plausible plan.
At last—a true leader in Big Oil sets the record straight for all to see.

The Far Side of the Moon

Thursday, February 12, 2015

Thursday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. We sold the bond bubble just as it peaked and bought stocks. You're welcome!

NASA Plots the Shape of Droughts To Come

Droughts exceeding those of the Medieval Warm Period are coming to the USA according to this video from NASA's Goddard Spaceflight Center research:

Wednesday, February 11, 2015

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Danger for the bulls? A short term condition bears watching closely!

The Crude Oil Stimulus Plan

EIA, the USA's Energy Information Agency, estimates that the average US household will save $750 this year due to the drop in energy prices. That's a total stimulus of $86,740,500,000 going directly to the consumer sector's bottom line—tax-free.

Tuesday, February 10, 2015

Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. A new uptrend has been confirmed in an important sector.

Monday, February 09, 2015

Monday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. What do TSLA, IBM and AAPL have in common?

The "Big Lie" About the U.S. Jobs Picture

The "Big Lie" About the U.S. Jobs Picture
Some 30 million people are either out of work or severely underemployed

By Elliott Wave International

Editor's note: You'll find the text version of the story below the video.

The financial media has recently featured stories with an upbeat outlook for the U.S. economy.

For example: The economy is on track for "the fastest growth in a decade" (Associated Press), and "Experts expect jobs aplenty in '15" (USA Today).

This upbeat tone is related to December's U.S. jobless rate of 5.6%, its lowest since June 2008.

But Jim Clifton, Chairman and CEO of Gallup, offers a different perspective on the jobs data. His February 3 article on Gallup's website was headlined, "The Big Lie: 5.6% Unemployment."

Right now, we're hearing much celebrating from the media, the White House and Wall Street about how unemployment is "down" to 5.6%. The cheerleading for this number is deafening.

None of them will tell you this ... If you are so hopelessly out of work that you've stopped looking over the past four weeks -- the Department of Labor doesn't count you as unemployed. ... Right now, as many as 30 million Americans are either out of work or severely underemployed. ...

If you perform a minimum of one hour of work in a week and are paid at least $20 ... you're not officially counted as unemployed ... .

If you ... are working 10 hours part time because it is all you can find ... the government doesn't count you in the 5.6%.

There's no other way to say this. The official unemployment rate ... amounts to a Big Lie.

A Federal Reserve chart shows that the civilian labor force has been shrinking for 15 years.

The February Elliott Wave Financial Forecast comments:

Why is [the U.S. Labor Force Participation Rate] falling when job growth is rising? The answer, we think, is the emerging force of deflation. Notice that the peak participation rate of 67.3% came from January to March 2000, as the major stock indexes topped, after which inflation first began to falter. When stocks rallied to their 2007 top, there was a mild bounce in the rate, but the latest stock market rally failed to generate any sustained rise in the rate of work force participation. Workers appear so discouraged that the pool of available employees is back to where it was in 1978. The opening chapter of Conquer the Crash ...states, "The persistent deceleration in the U.S. economy is vitally important, because it portends a major reversal from economic expansion to economic contraction."

What will the jobless picture look like at the bottom of an economic contraction?

The third edition of Conquer the Crash published in July 2014 and forecast:

The true unemployment rate in the U.S. and in most countries around the world will rise and eventually exceed 25 percent ... .

What You Need to Know Now About Protecting Yourself from Deflation

Get Your Special Report: What You Need to Know NOW About Protecting Yourself from Deflation

In this free Special Report, you will learn about this unexpected but imminent risk to your portfolio AND you'll get 29 specific forecasts for stocks, real estate, gold, cultural trends -- and more (excerpted from Prechter's New York Times bestseller Conquer the Crash -- You Can Survive and Prosper in a Deflationary Depression).

Download your free report now >>

This article was syndicated by Elliott Wave International and was originally published under the headline The "Big Lie" About the U.S. Jobs Picture. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Sunday, February 08, 2015

Friday's Results In The Wall Street Bucket Shops

#SubscriberNotes #WeekendAnalysis have been updated on the website. The 34-year bond bubble has burst. Implications are serious.

Friday, February 06, 2015

Why Conservatives and Libertarians Love Solar

This week's Energy Gang podcast explains Why More Tea Partyers Are Rallying Behind Solar. Stephen Lacey writes:
In this week’s podcast, we’ll talk with Debbie Dooley, founder of the Green Tea Coalition and Conservatives for Energy Choice, about why tea partyers are rallying behind solar PV as a way to expand personal freedoms.

Then, we’ll discuss a new report concluding that Europe overpaid $100 billion for its renewable energy capacity. And we’ll wrap up the show with a look at a secret automated car-sharing service from Google that is reportedly designed to rival Uber.

Thursday, February 05, 2015

Thursday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Volatility should be the word for Friday's Employment Report Day.

Wednesday, February 04, 2015

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Stocks and bonds are in a transition period which will end soon.

Nouriel Roubini: An Unconventional Truth

Nouriel Roubini writes:
Who would have thought that six years after the global financial crisis, most advanced economies would still be swimming in an alphabet soup – ZIRP, QE, CE, FG, NDR, and U-FX Int – of unconventional monetary policies? No central bank had considered any of these measures (zero interest rate policy, quantitative easing, credit easing, forward guidance, negative deposit rate, and unlimited foreign exchange intervention, respectively) before 2008. Today, they have become a staple of policymakers’ toolkits.
Roubini explains why we will continue to see “slow growth, secular stagnation, disinflation, and even deflation” as these failed policies continue to be used by the world's central bankers.

Yes, it's true that the central bankers are simply insane. Remember the definition of insanity is doing the same things repeatedly and expecting a different outcome? It's time to simply admit the fact: the world's central bankers have failed and it's time to get rid of them. Instead of admitting this, we continue to allow them to run roughshod over the whole world. One can conclude that civilization deserves what's coming if we don't change our current scheme of running things and that's an economic collapse far greater than any prior depression.

Tuesday, February 03, 2015

Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. The bond bubble is cracking badly. Can bond investors get out before it's too late?

Monday, February 02, 2015

Monday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Equities have found a cycle low. But, will bonds find their cycle high?

LBJ's CO2 Warning

President Johnson (LBJ) was the first US President to warn us of the danger we were facing 50 years ago:
Air pollution is no longer confined to isolated places. This generation has altered the composition of the atmosphere on a global scale through radioactive materials and a steady increase in carbon dioxide from the burning of fossil fuels.
Daily Climate marks the anniversary:
The speech mainly focused on all-too-visible pollution of land and waterways, including roadside auto graveyards, strip mine sites, and soot pollution that had marred even the White House.
Within the year, Johnson would sign six new environmental laws during a period better remembered for the strife that led to the Voting Rights Act of 1965 and the escalation of the Vietnam War. Johnson also that year established a dozen new national monuments, historic sites, and recreation areas; and submitted a draft nuclear non-proliferation treaty to the United Nations.
Carbon risk, of course, still stymies policymakers. But it was not ignored entirely in the wake of Johnson's "Special Message to Congress on Conservation and Restoration of Natural Beauty." In fact, the warnings and predictions given to Johnson from his science team proved remarkably prescient.

Sunday, February 01, 2015

Friday's Results In The Wall Street Bucket Shops

#SubscriberNotes #WeekendAnalysis have been updated on the website. Government bond bubble is topping right now.

Thursday, January 29, 2015

Thursday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Have we seen the low? Very likely, we have.

Lucky Country Australia Will Run Out of Luck

Australia is called the “Lucky Country.” But, it seems it is about to run out of luck.

The CSIRO and Bureau of Meteorology have released a comprehensive projection of climate change that predicts temperatures to rise 5.1° (9.2°F) by the end of the century. This level of increase will mean not only widespread crop failures, but also the inability of people to work outdoors during the “hot” season, which could last up to nine months of the year.

It also means that water will become even more scarce on the parched continent. Desalination of seawater will be required at a high cost as reservoirs rapidly evaporate due to the higher temperatures. In fact, it may be such an economic burden on the country that many will be forced to emigrate to other areas of the planet.

Indeed, Australia, one of the worst of the developed world in terms of climate policy, will suffer enormously this century from its self-induced crisis.

Wednesday, January 28, 2015

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Oil remains the key to equities price movements.

Income Inequality

The 1% are getting all the economic gains while the 99% are getting squeezed. This report summarizes:
... The economic recovery so far has only boosted the incomes of the rich, and it has yielded no improvement for the bottom 99 percent of the distribution. After adjusting for inflation, the average income for the richest 1 percent (excluding capital gains) has risen from $871,100 in 2009 to $968,000 over 2012 and 2013. By contrast, for the remaining 99 percent, average incomes fell by a few dollars from $44,000 to $43,900.

Looking For An Escape Hatch

With inequality seemingly growing without bound, the 1% are getting serious about planning their escape routes. It's a sign of the times that things are only going to get worse. The Guardian has a good article on the subject: As inequality soars, the nervous super rich are already planning their escapes:
With growing inequality and the civil unrest from Ferguson and the Occupy protests fresh in people's mind, the world's super rich are already preparing for the consequences. At a packed session in Davos, former hedge fund director Robert Johnson revealed that worried hedge fund managers were already planning their escapes. "I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway," he said.
Johnson, who heads the Institute of New Economic Thinking and was previously managing director at Soros, said societies can tolerate income inequality if the income floor is high enough. But with an existing system encouraging chief executives to take decisions solely on their profitability, even in the richest countries inequality is increasing.
Johnson added: "People need to know there are possibilities for their children — that they will have the same opportunity as anyone else. There is a wicked feedback loop. Politicians who get more money tend to use it to get more even money."
Global warming and social media are among the trends the 600 super-smart World Economic Forum staffers told its members to watch out for long before they became ubiquitous. This year, income inequality is fast moving up the Davos agenda — a sure sign of it is poised to burst into the public consciousness.

Tuesday, January 27, 2015

Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. A powerful rally is building now and a breakout is expected very soon.

Reversing Aging By Extending Telomeres

Stanford scientists have announced a method to extend cellular telomeres by a thousand nucleotides. This is significant in reversing aging as the reason why cells eventually stop dividing is the loss of sufficient telomeres. Scientists extend telomeres to slow cell aging reports:
Scientists at the Stanford University School of Medicine have developed a new procedure that uses modified messenger RNA to quickly and efficiently increase the length of human telomeres, the protective caps on the ends of chromosomes that are associated with aging and disease.
Treated cells behave as if they are much younger than untreated cells, multiplying with abandon in the laboratory dish rather than stagnating or dying. Skin cells with telomeres lengthened by the procedure were able to divide up to 40 more times than untreated cells.
The procedure will improve the ability of researchers to generate large numbers of cells for study or drug development and may lead to preventing or treating diseases of aging, the scientists say.
Telomeres are the protective caps on the ends of chromosomes, which house our genomes. In young humans, telomeres are about 8,000—10,000 nucleotides long. They shorten with each cell division, however, and when they reach a critical length, the cell stops dividing or dies. This internal "clock" makes it difficult to keep most cells growing in a laboratory for more than a few cell doublings. Turning back the internal clock' "Now we have found a way to lengthen human telomeres by as much as 1,000 nucleotides, turning back the internal clock in these cells by the equivalent of many years of human life," said Helen Blau, PhD, professor of microbiology and immunology at Stanford and director of the university's Baxter Laboratory for Stem Cell Biology. "This greatly increases the number of cells available for studies such as drug testing or disease modeling."

Helicopters on Mars

JPL engineers are working on a small helicopter that could ‘scout’ a trail for future Mars rovers, but getting a chopper that could fly in the Martian atmosphere is tricky.

Monday, January 26, 2015

Monday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Stocks soared on Monday as the Sweet Spot in the market took the rally baton.

Solar Power Infographic

From CleanTechnica:

How much money can you save with solar?

How much does solar cost?

Lower 48 oil production outlook stable despite expected near-term reduction in rig count

By Troy Cook and Jack Perrin, EIA.gov:
The sharp decline in oil prices over the last quarter of 2014, which has continued in January, is already having a significant effect on drilling activity in the United States, as shown by the 16% decline in the number of active onshore drilling rigs in the Lower 48 states between the weeks ending on October 31, 2014 and January 23, 2015, according to data from Baker-Hughes.
Moving from what has happened to forecasting the future is challenging, in part because market expectations of uncertainty in the price outlook have increased as reflected in the current values of futures and options contracts. When the latest edition of EIA's monthly Short-Term Energy Outlook (STEO) was issued on January 13, the 95% confidence interval for market expectations for prices in December 2015 was extremely wide, with upper and lower limits of $28/barrel (bbl) and $112/bbl, respectively. The growing uncertainty surrounding oil prices presents a major challenge to all price forecasts. EIA's January STEO forecasts Brent crude oil prices averaging $58/bbl in 2015 and $75/bbl in 2016, with annual average West Texas Intermediate (WTI) prices expected to be $3/bbl to $4/bbl lower.
Should its price forecast be realized, EIA projects that the number of operating rigs will decrease by approximately 24% from January to October 2015 before beginning to rebound in November 2015. However, the outlook for Lower 48 production reflects more than just the rig count. Other key factors include the efficiency of drilling, which EIA tracks in its Drilling Productivity Report, the rate of decline in production from existing wells, and changes in the amount of time between the start of drilling (called spudding) and the completion of the well.
As discussed in a previous Today in Energy article on the effect of declining crude oil prices on U.S. production, permits and drilling in North Dakota declined during the financial downturn of 2008-09, but production rates did not decline as substantially. At the time of the July 2008 oil price peak, drilling activity in the Bakken-Three Forks formations outpaced well completion activity as increasing numbers of wells were drilled. Averaging about 70 days before the oil price peak, spud-to-completion times almost doubled within two months, reaching more than 130 days. This increase created a backlog of wells that had been drilled but not yet completed. As fewer wells were drilled during the subsequent drop in oil prices, the spud-to-completion times decreased. Increased drilling activity in the Bakken since 2011 has once again increased spud-to-completion times, which have stabilized at more than 120 days per well, almost twice previous minimum levels. s more than just the rig count. Other key factors include the efficiency of drilling, which EIA tracks in its Drilling Productivity Report, the rate of decline in production from existing wells, and changes in the amount of time between the start of drilling (called spudding) and the completion of the well.
As discussed in a previous Today in Energy article on the effect of declining crude oil prices on U.S. production, permits and drilling in North Dakota declined during the financial downturn of 2008-09, but production rates did not decline as substantially. At the time of the July 2008 oil price peak, drilling activity in the Bakken-Three Forks formations outpaced well completion activity as increasing numbers of wells were drilled. Averaging about 70 days before the oil price peak, spud-to-completion times almost doubled within two months, reaching more than 130 days. This increase created a backlog of wells that had been drilled but not yet completed. As fewer wells were drilled during the subsequent drop in oil prices, the spud-to-completion times decreased. Increased drilling activity in the Bakken since 2011 has once again increased spud-to-completion times, which have stabilized at more than 120 days per well, almost twice previous minimum levels.
This backlog of wells acts as a cushion for production rates, offsetting the more immediate decreases in drilling and permitting activity. At most major plays in the United States, the backlog currently ranges from three to seven months. When drilling activity remains at reduced levels long enough to outlast the cushioning effect of the well-completion backlog, the number of new wells brought online will begin to decrease, which can eventually reduce production rates.
While the cushion provided by the well-completion backlog changes from formation to formation, EIA's forecast of rising crude oil prices in the second half of 2015, if realized, is expected to be accompanied by a stabilization of drilling activity that would be sufficient to prevent a substantial production decline in the Lower 48 region. Different outcomes are entirely possible under other price scenarios.

A Buying Opportunity in Solar

Recently, clean energy stocks such as SunEdison (SUNE), FirstSolar (FSLR), Opower (OPWR) and SolarCity (SCTY) have been trading well off their recent highs. This is a sympathy move to the 50%+ crash in oil prices. It's also a case of the dumb herd not understanding that oil and solar don't move to the beat of the same drummer. The smart money is doubling down on alternative energy. They know a great bargain when they see one.

As David Waserstein writes in What Does The Collapse In Oil Prices Really Tell Us About Alternative Energy?

If oil stays near $50/bbl, what happens to the alternative energy stocks — solar, wind, biofuels, etc? Let me give you a hint: most of them don't play the same sport.
In the developed world, oil is used primarily for one purpose — transportation. Coal, natural gas, hydro and renewables are used for electricity generation — the other primary method of energy consumption. The one overlap is heating when you have oil, gas and sometimes even electric competing. So as oil drops 50%, the knock-on effect on demand for things like wind and solar is negligible.
In the developing world, things are a little more complicated. Diesel gensets are used more frequently, especially for remote power applications and backup power when the local power grid is unreliable. With configurations like that, the equivalent rate per kWh is estimated at $0.44/kWh. While a drop in oil prices may lower that marginal cost, it's still pretty pricey power. And let's not forget that diesel gets stolen. So ultimately, solar is still in demand.

This is how the smart money wins—at the expense of the dumb money.

Sunday, January 25, 2015

Friday's Results In The Wall Street Bucket Shops

#SubscriberNotes #WeekendAnalysis have been updated on the website. Our Lead Dog Index blazes a trail in equities.

Thursday, January 22, 2015

Thursday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Some indices are showing signs of life, while others are lagging. We tell which in today's update.

Wednesday, January 21, 2015

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Lead dog may be leading the next run in equities.

Connecting the Dots Between the Fermi Paradox and Climate Change

Enrico Fermi postulated it, which is why it's called the Fermi Paradox: “The apparent contradiction between high estimates of the probability of the existence of extraterrestrial civilization and humanity's lack of contact with, or evidence for, such civilizations.”

The evidence supports the idea that technological life is so rare in the universe that we may very well be alone. And, the reason technological life may be so rare is that sustainability issues could be the stumbling block. Adam Frank writes in Is a Climate Disaster Inevitable?

The defining feature of a technological civilization is the capacity to intensively "harvest" energy. But the basic physics of energy, heat and work known as thermodynamics tell us that waste, or what we physicists call entropy, must be generated and dumped back into the environment in the process. Human civilization currently harvests around 100 billion megawatt hours of energy each year and dumps 36 billion tons of carbon dioxide into the planetary system, which is why the atmosphere is holding more heat and the oceans are acidifying. As hard as it is for some to believe, we humans are now steering the planet, however poorly.
Can we generalize this kind of planetary hijacking to other worlds? The long history of Earth provides a clue. The oxygen you are breathing right now was not part of our original atmosphere. It was the so-called Great Oxidation Event, two billion years after the formation of the planet, that drove Earth's atmospheric content of oxygen up by a factor of 10,000. What cosmic force could so drastically change an entire planet's atmosphere? Nothing more than the respiratory excretions of anaerobic bacteria then dominating our world. The one gas we most need to survive originated as deadly pollution to our planet's then-leading species: a simple bacterium.
The Great Oxidation Event alone shows that when life (intelligent or otherwise) becomes highly successful, it can dramatically change its host planet. And what is true here is likely to be true on other planets as well.
But can we predict how an alien industrial civilization might alter its world? From a half-century of exploring our own solar system we've learned a lot about planets and how they work. We know that Mars was once a habitable world with water rushing across its surface. And Venus, a planet that might have been much like Earth, was instead transformed by a runaway greenhouse effect into a hellish world of 800-degree days.
By studying these nearby planets, we've discovered general rules for both climate and climate change. These rules, based in physics and chemistry, must apply to any species, anywhere, taking up energy-harvesting and civilization-building in a big way. For example, any species climbing up the technological ladder by harvesting energy through combustion must alter the chemical makeup of its atmosphere to some degree. Combustion always produces chemical byproducts, and those byproducts can't just disappear. As astronomers at Penn State recently discovered, if planetary conditions are right (like the size of a planet's orbit), even relatively small changes in atmospheric chemistry can have significant climate effects. That means that for some civilization-building species, the sustainability crises can hit earlier rather than later.
Even if an intelligent species didn't rely on combustion early in its development, sustainability issues could still arise. All forms of intensive energy-harvesting will have feedbacks, even if some are more powerful than others. A study by scientists at the Max Planck Institute in Jena, Germany, found that extracting energy from wind power on a huge scale can cause its own global climate consequences. When it comes to building world-girdling civilizations, there are no planetary free lunches.

Tuesday, January 20, 2015

Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Why our "booming" economy is still in recession after eight years of sham "recovery."

Sunday, January 18, 2015

That Was Easy: In Just 60 Years, Neoliberal Capitalism Has Nearly Broken Planet Earth

Pair of new studies show how various forms of human activity, driven by a flawed economic system and vast consumption, is laying waste to Earth's natural systems

by Jon Queally, staff writer, Common Dreams
The conclusion that the world's dominant economic model—a globalized form of neoliberal capitalism, largely based on international trade and fueled by extracting and consuming natural resources—is the driving force behind planetary destruction will not come as a shock, but the model's detailed description of how this has worked since the middle of the 20th century makes a more substantial case than many previous attempts. (Photo: NASA)

Humanity's rapacious growth and accelerated energy needs over the last generation—particularly fed by an economic system that demands increasing levels of consumption and inputs of natural resources—are fast driving planetary systems towards their breaking point, according to a new pair of related studies.

"It is difficult to overestimate the scale and speed of change. In a single lifetime humanity has become a geological force at the planetary-scale." —Prof. Will Steffen

Prepared by researchers at the Stockholm Resilience Centre, the first study looks specifically at how "four of nine planetary boundaries have now been crossed as a result of human activity." Published in the journal Science* on Thursday, the 18 researchers involved with compiling evidence for the report—titled 'Planetary Boundaries 2.0'—found that when it comes to climate change, species extinction and biodiversity loss, deforestation and other land-system changes, and altered biogeochemical cycles (such as changes to how key organic compounds like phosphorus and nitrogen are operating in the environment), the degradation that has already take place is driving the Earth System, as a whole, into a new state of imbalance.

"Transgressing a boundary increases the risk that human activities could inadvertently drive the Earth System into a much less hospitable state, damaging efforts to reduce poverty and leading to a deterioration of human well-being in many parts of the world, including wealthy countries," said Professor Will Steffen, a researcher at the Centre and the Australian National University, Canberra, who was lead author for both studies.

In addition to the four boundaries that have already been crossed, the study looked at five other ways in which the planetary systems are under assault by human activity. They include: stratospheric ozone depletion; ocean acidification; freshwater use; atmospheric aerosol loading (microscopic particles in the atmosphere that affect climate and living organisms); and the introduction of novel entities into ecosystems (e.g. organic pollutants, radioactive materials, nanomaterials, and micro-plastics).

"I don't think we've broken the planet but we are creating a much more difficult world," Sarah Cornell, another report author, told Reuters.

In this interview with Wired last year, Johan Rockström, executive director of the Stockholm Resilience Centre, described the idea about planetary boundaries in details:

Related to the findings of the first study, the second report examines what it calls the "Great Acceleration" and is an assessment of the speed and influence that specific factors have had in damaging the planetary systems described in Planetary Boundaries 2.0. Using a series of indicators, the study compares the relationship, over time, between 12 'socio-economic factors'—including economic growth (GDP); population; foreign direct investment; energy consumption; and water use—on one side with 12 'Earth system trends'—like the carbon cycle; the nitrogen cycle and biodiversity—on the other.

Using what it calls a "planetary dashboard," the research charts the spread and speed of human activity from the start of the industrial revolution in 1750 to 2010, and the subsequent changes in the Earth System – e.g. greenhouse gas levels, ocean acidification, deforestation and biodiversity deterioration. The analysis found that increased human activity—and "predominantly the global economic system"—has unseated all other factors as the primary driver of change in the Earth System, which the report describes as "the sum of our planet's interacting physical, chemical, biological and human processes." The most striking, i.e. "accelerated," changes to that system have occurred in the last sixty years.

"It’s clear the economic system is driving us towards an unsustainable future and people of my daughter’s generation will find it increasingly hard to survive. History has shown that civilisations have risen, stuck to their core values and then collapsed because they didn’t change. That’s where we are today." —Prof. Will Steffen"It is difficult to overestimate the scale and speed of change. In a single lifetime humanity has become a geological force at the planetary-scale," said Steffen, who also led the Acceleration study.

The conclusion that the world's dominant economic model—a globalized form of neoliberal capitalism, largely based on international trade and fueled by extracting and consuming natural resources—is the driving force behind planetary destruction will not come as a shock, but the model's detailed description of how this has worked since the middle of the 20th century makes a more substantial case than many previous attempts.

"When we first aggregated these datasets, we expected to see major changes but what surprised us was the timing. Almost all graphs show the same pattern. The most dramatic shifts have occurred since 1950. We can say that around 1950 was the start of the Great Acceleration," says Steffen. "After 1950 we can see that major Earth System changes became directly linked to changes largely related to the global economic system. This is a new phenomenon and indicates that humanity has a new responsibility at a global level for the planet."

The paper makes a point to acknowledge that consumption patterns and the rise of what has become known as the Anthropocene Era does not fall equally on the human population and its examination of the economic system which is underpinning planetary destruction is one rife with inequality, in which certain populations consume at vastly higher levels than others.

According to the report, "The new study also concludes that the bulk of economic activity, and so too, for now, the lion's share of consumption, remain largely within the OECD countries, which in 2010 accounted for about 74% of global GDP but only 18% of the global population. This points to the profound scale of global inequality, which distorts the distribution of the benefits of the Great Acceleration and confounds international efforts, for example climate agreements, to deal with its impacts on the Earth System."

A worrying trend, notes the paper, is how a growing global middle class—exemplified by those in the BRICS nations of Brazil, Russia, India, China, and South Africa—is an increasing threat to the planet as the consumer mindset established in the OECD nations, particularly the U.S., spreads.

In an interview with the Guardian, Steffen spoke clearly about the overall impacts of the two new studies as he sounded the alarm over humanity's trajectory. "People say the world is robust and that’s true, there will be life on Earth, but the Earth won’t be robust for us," he said. "Some people say we can adapt due to technology, but that’s a belief system, it’s not based on fact. There is no convincing evidence that a large mammal, with a core body temperature of 37C, will be able to evolve that quickly. Insects can, but humans can’t and that’s a problem."

"It’s clear the economic system is driving us towards an unsustainable future and people of my daughter’s generation will find it increasingly hard to survive. History has shown that civilisations have risen, stuck to their core values and then collapsed because they didn’t change. That’s where we are today."

What increasing amounts of strong evidence shows, he said, is that there are "tipping points" the human race should simply not "want to cross."

Friday's Results In The Wall Street Bucket Shops

#SubscriberNotes #WeekendUpdate have been updated on the website. Big changes coming soon to equity and bond markets!

Friday, January 16, 2015

Solar Gains Outpace Fossil Fuels

The massive growth in solar is leading to more jobs and less pollution. It's important to keep in perspective those gains. Solar Included for First Time Ever in State of American Energy Report highlights the fact that some oil companies are actually considering getting out of the fossil fuel business to go solar in a very big way.

At this point in time, solar is growing the economy:

Most importantly, the report predicted strong, continued growth in all sectors of the U.S. solar industry—residential, commercial, utility-scale and solar heating and cooling—over the next two years.
"The United States is in the midst of a new era in domestic energy abundance characterized by rising use of renewable energy and increased oil and natural gas production that is strengthening our economic outlook and enabling America to emerge as a global energy superpower," said API President and CEO Jack Gerard. "It's a remarkable transformation that has been made possible because America is uniquely rich in energy resources, a talented workforce and cutting-edge energy technologies."
Solar energy is one of America's great success stories. Last year, solar installations were 70 times higher than they were in 2006—and today there's nearly 30 times more solar capacity online nationwide. We've gone from being an $800 million industry in 2006 to a $15 billion industry today. The price to install a solar rooftop system has been cut in half, while utility systems have dropped by 70 percent. It took the U.S. solar industry 40 years to install the first 20 GW of solar. Now, we're going to install the next 20 GW in the next two years. In fact, during every single week of 2015, we're going to install more capacity than what we did during the entire year in 2006. Any way you look at it, solar energy is paying huge dividends for the economy, our environment and America's future.
Moreover, with solar going down in price along with storage, the growth of solar is likely to accelerate this year. It's no wonder that we'll see at least one major player in fossil fuels selling their fossil holdings and buying into solar+storage. It's already happening in Germany and it's only a matter of time before in happens here and elsewhere.

Thursday, January 15, 2015

Thursday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Seasonals are saying to look for an important top in a favorite security real soon.

Wednesday, January 14, 2015

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Oil's ABC rally.

Cap-and-Trade: A Liberal Boondoggle Which Won't Stop Climate Change

When a politician tries to convince you that we need Cap-and-trade to stop Climate Change, the first thing you should wonder is who's stealing from the public. Cap-and-trade simply will not stop Climate Change, but it's going to make some group rich at the public's expense. As James Hansen, who first alerted us to the dangers of Climate Change way back in the Eighties, says:
Liberals accept the reality of climate change, but then propose remedies that are ineffectual and confirm the fears of conservatives. Liberals refuse to give up on the "cap-and-trade" approach of the Kyoto Protocol, even though it was completely ineffectual.
Cap-and-trade will never be accepted by conservatives, who can characterize it as cap-and-tax. Liberals in Australia adopted a cap-and-tax, and, as expected, when conservatives took power they threw it out. Fee-and-dividend, in contrast, would stick, as most people come out ahead financially and all witness the benefits to the national and global economy and the environment.
Read more about fee-and-dividend here.

Tuesday, January 13, 2015

Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. The Dow futures fell more the 400 points on Tuesday, a real mini-crash intraday.

Social Cost of Climate Change 6X Greater Than Government Estimates

R&D Magazine reports that the government is underestimating the social cost of Climate Change by a factor of 6×::
The economic damage caused by a ton of carbon dioxide emissions—often referred to as the "social cost" of carbon—could actually be six times higher than the value that the U.S. now uses to guide current energy regulations, and possibly future mitigation policies, Stanford Univ. scientists say.
A recent U.S. government study concluded, based on the results of three widely used economic impact models, that an additional ton of carbon dioxide emitted in 2015 would cause $37 worth of economic damages. These damages are expected to take various forms, including decreased agricultural yields, harm to human health and lower worker productivity, all related to climate change.
But according to a new study, published online in Nature Climate Change, the actual cost could be much higher. "We estimate that the social cost of carbon is not $37 per ton, as previously estimated, but $220 per ton," said study coauthor Frances Moore, a graduate candidate in the Emmett Interdisciplinary Program in Environment and Resources in Stanford's School of Earth Sciences.
Based on the findings, countries may want to increase their efforts to curb greenhouse gas emissions, said study co-author Delavane Diaz, a graduate candidate in the Dept. of Management Science and Engineering at Stanford's School of Engineering. "If the social cost of carbon is higher, many more mitigation measures will pass a cost-benefit analysis," Diaz said. "Because carbon emissions are so harmful to society, even costly means of reducing emissions would be worthwhile."
There's a lot of talk coming out of DC, mostly from Democrats, that new taxes are called for. This higher social cost of carbon is certain to amp up that talk. But, higher taxes are always and everywhere a bad idea. Some are worse than others, though. James Hansen has the best idea about carbon taxes: collect the taxes and distribute them directly to taxpayers via debit cards. This would help prevent the politicians from diverting those taxes and create a net positive monetary benefit for the average consumer. According to Hansen's formula, parents would receive full credit and children half credit for taxes paid by oil companies. Here's what he says in his latest blog:
Current low oil and gas prices present a golden opportunity to solve the climate problem.
Today we could jump-start a carbon fee at a large rate, say $100 per ton of CO₂, collected from fossil fuel companies on the first sale at domestic mines and ports-of-entry. This initial fee generates more than $600B per year in the U.S., which should be 100% distributed electronically (to bank accounts or debit cards) to all legal residents. With half a share for children up to two per family, a family of four or more would receive about $6000/year. Subsequent increase of the carbon fee would be slow, e.g., $10/ton per year, to allow people and entrepreneurs time to make changes and investments, as we move toward carbon-free energies and energy efficiency.
$100/ton would increase the price of gasoline at the pump about $1/gallon. However, such a price rise will occur in the near future anyhow. It is only a matter of whose pocket the added money will go into: the fossil fuel industry's pocket or the public's pocket.
The ultimate price at the pump will be similar in carbon-fee and no-carbon-fee cases. In the carbon-fee case, fuel demand falls over time as fuel use declines, in the U.S. by more than 30% in 10 years and 50% in 20 years. Thus conventional fossil fuels will suffice to carry us beyond fossil fuels. Expensive unconventional fossil fuels such as tar sands and deep Arctic oil would mostly be left in the ground, regardless of pipelines.
Technology development is crucial to move us to a clean energy future, but it will be rapid only if there is a carbon fee that entrepreneurs and business people can count on to continue to rise. Government R&D was once a prime driver of technology progress, but not today. I speak from experience and understanding of how government bureaucracy has grown and now slows technical progress in even the most "can do" of agencies. Yes, it is worth reforming present agencies, but primarily so they can facilitate progress in private enterprise, rather than impede it.
This is a good idea, but only if we can find a way to keep the crooked politicians' hands out of the cookie jar. Unfortunately, Hansen makes the common mistake environmentalists make in assuming that keeping the oil in the ground is a positive—it's not. Oil that is not burned makes a great feedstock for plastics, fertilizers and pesticides. There would need to be a mechanism for crediting oil companies for oil which is ultimately not burned. Otherwise, Hansen has a great idea for carbon taxes. Most folks would see a net credit under his scheme and that's something the consumer isn't going to complain about.

Monday, January 12, 2015

Monday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. The bearish trend in Tesla.

Grid Electricity Prices Continue To Rise

While oil prices are plunging back to earth, grid electricity prices, mostly generated by the burning of fossil fuels, continue to rise across the USA according to a new report from EIA entitled Wholesale power prices increase across the country in 2014.
Electricity prices were highest in the Northeast, driven by record-high natural gas prices early in the year during a very cold winter. Spot natural gas prices at the Henry Hub averaged $4.38 per million British thermal units (MMBtu) in 2014, an increase of 17% from 2013, and prices at other major trading points were up 16%-40% in 2014. Electricity prices were the lowest, and increased the least (only 3%), in the Pacific Northwest, where abundant low-cost hydroelectric generation often leads to the lowest prices in the nation.
A major factor for electricity prices in 2014 was the extreme weather system that covered much of the United States, resulting in heavy snowfall and bitterly cold temperatures during the winter of 2013-14, which strained the energy grid in several ways.
Of course, these extra cold winters are a direct result of Global Warming. While it might seem counter-intuitive, it's clear that the polar vortex is being periodically displaced from the North Pole by warm air reaching the Arctic, spilling air to the south that would have normally been bottled up in the high latitudes. This spillage south causes frigid air to blanket much lower latitudes in the winter. If you thought we might have better winters from Global Warming, you thought wrong.

Sunday, January 11, 2015

Friday's Results In The Wall Street Bucket Shops

#SubscriberNotes #WeekendAnalysis have been updated on the website. What do seasonals tell us about January?

Note: a bucket shop is an unofficial and usually illegal betting operation in which the prices of stocks and commodities are posted and the customers bet on the rise and fall of prices without actually buying stock, commodities, or commodity futures. Today's stock trading has been divorced from its connection to true valuation of securities and is equivalent to a bucket shop operation.

Friday, January 09, 2015

December Employment Report: Economy Still in Recession

Everybody treats the monthly labor confessional as news, but in truth, the government's report runs 4-6 months behind the actual economy. Last month's report shows that wages for employees were actually falling in the following industries:
  • Mining and logging
  • Construction
  • Manufacturing
  • Wholesale trade
  • Retail trade
  • Utilities
  • Information
  • Financial activities
  • Professional and business services
  • Education and health services

With income falling in the majority of categories, the rise in GDP simply means that more and more of the wealth being created is going to the managerial class, squeezing the middle and lower classes. That's a recessionary environment because the majority of workers are not participating in the so-called “economic advance.”

Today's employment report is confirmation that the US economy is still effectively in recession for most of the country.

Grid Defection Looms

Terry Tamminen writes that it's Time to cut the cord on global power grid:
Think how quickly we evolved from landline phones, that took weeks to install, to cellphones that take a few minutes to buy and activate. Some of the same dynamics are about to force traditional energy utilities and grids to cut the cord and evolve to a 21st century customer-driven distributed energy market. Here is a summary of the why-what-when for cutting the old-school cord.
Do a Google search for "power outages" and there's never a day that goes by without one, somewhere in the world. In early November 2014, for example, 13,500 homes lost power to a storm in eastern Massachusetts at the same time that Bangladesh suffered a nationwide blackout when its grid experienced a "technical glitch."
Then there's the true cost of massive power plants connected to aging grids. Take nuclear power, for example. According to one UN report, some 80 nuclear power reactors will have lived their useful lives and need to be decommissioned in the next ten years. One reactor creates an average of 566,400 tons of radioactive waste and the average costs of decommissioning in the U.S. is about $500 million or up to 15 percent of the initial capital cost. In France, decommissioning their smaller reactors costs closer to 59 per cent of the reactor's initial cost. Add to this the risks and costs of disasters such as Fukushima, Japan at $100 billion and Chernobyl at $15 billion of direct loss plus an estimated $235 billion for Ukraine and %201 billion for Belarus in the thirty years since, and it's clear that something needs to change.
He's talking grid defection:
Change doesn't always happen swiftly or smoothly, but in a world where people want more control over their entertainment, communication, and transportation, utilities that rely on operating a grid for profits may want to observe those precedents, then follow the old Apple slogan and start to "think different" in 2015.

Thursday, January 08, 2015

Thursday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. What goes down must go back up ... and down again, no wonder it's called yoyo!

Note: a bucket shop is an unofficial and usually illegal betting operation in which the prices of stocks and commodities are posted and the customers bet on the rise and fall of prices without actually buying stock, commodities, or commodity futures. Today's stock trading has been divorced from its connection to true valuation of securities and is equivalent to a bucket shop operation.

Climate Change Deniers Serengeti Strategy

The anti-science crowd as lions? Michael Mann, noted climate scientist, writes about The Serengeti strategy: How special interests try to intimidate scientists, and how best to fight back. These anti-science climate criminals use ad hominem attacks to confuse the public about the facts of climate change.

If you're in a theatre when a fire breaks out, it's the same situation: Those who recognize the fire and try to alert the other patrons are being attacked as not credible by those who wish to see the theatre burn down and everyone die within. In truth, those who deny the fire are the criminals and deserve to die. But, their goal is to make sure no one believes the idea of a fire. The climate deniers are not trying to help patrons survive. They are simple nefarious agents whose real goal is mass suicide.

Wednesday, January 07, 2015

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Is the stock market chained to oil and will the next plunge pull eqities down?

Note: a bucket shop is an unofficial and usually illegal betting operation in which the prices of stocks and commodities are posted and the customers bet on the rise and fall of prices without actually buying stock, commodities, or commodity futures. Today's stock trading has been divorced from its connection to true valuation of securities and is equivalent to a bucket shop operation.

Fukushima Radiation Arrives

Arrival of the Fukushima radioactivity plume in North American continental waters documents the first arrival of sea-borne radiation from the Fukushima meltdown in 2011:
The radionuclide results in this report represent the first systematic study, to our knowledge, of the arrival of the Fukushima radioactivity signal in continental waters off North America. The present time series results are critical to an understanding of the circulation of Fukushima tracers in the eastern North Pacific and to the tuning and validation of ocean circulation models that are being used to predict the future evolution of this signal. They are also important for informing the public of the magnitude of the Fukushima radioactivity signal in North American continental waters and enabling a science-based assessment of the significance of its potential effects on human health and the environment.
It will be interesting to see whether the newly-elected members of Congress who are clearly anti-science are going to start denying the arrival of Fukushima radiation off our shores. Maybe they'll pass a law prohibiting scientists from measuring that radiation?

Tuesday, January 06, 2015

Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. A correction in stocks and bonds is coming soon.

Note: a bucket shop is an unofficial and usually illegal betting operation in which the prices of stocks and commodities are posted and the customers bet on the rise and fall of prices without actually buying stock, commodities, or commodity futures. Today's stock trading has been divorced from its connection to true valuation of securities and is equivalent to a bucket shop operation.

A Diet Pill With Great Promise

Fexaramine Tricks Mice Into Losing Weight

Monday, January 05, 2015

Monday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. As the financial system slowly collapses, energy gets cheap again!

Note: a bucket shop is an unofficial and usually illegal betting operation in which the prices of stocks and commodities are posted and the customers bet on the rise and fall of prices without actually buying stock, commodities, or commodity futures. Today's stock trading has been divorced from its connection to true valuation of securities and is equivalent to a bucket shop operation.

Sunday, January 04, 2015

Friday's Results In The Wall Street Bucket Shops

#SubscriberNotes #WeekendUpdate have been updated on the website. The plunge in energy is felt in all markets—and changes much.

Note: a bucket shop is an unofficial and usually illegal betting operation in which the prices of stocks and commodities are posted and the customers bet on the rise and fall of prices without actually buying stock, commodities, or commodity futures. Today's stock trading has been divorced from its connection to true valuation of securities and is equivalent to a bucket shop operation.

Saturday, January 03, 2015

Maximizing Shareholder Value: the Dumbest Idea of All

James Montier of GMO may have hit on the reason why our economy remains in the dumps despite many trillions of central bank stimulus. The problem is that the idea of maximizing shareholder value is the dumbest idea ever.

Montier writes in The World's Dumbest Idea that Shareholder Value Maximization (SVM) has been a complete failure and has contributed to some worrisome economic outcomes. In fact, it was not Montier who came up with that “dumbest idea” moniker, it was Jack Welch, the revered former CEO of GE who first said it in March 2009. Montier shows that SVM is a very bad idea indeed.

He illustrates some of the problems with the bad performance in IBM. “In many ways that bluest of blue chips, IBM, represents a perfect microcosm of the general pattern of obsession with SVM.” In 1973, IBM's goals were:

  1. respect for individual employees;
  2. a commitment to customer service; and
  3. achieving excellence.

By 2010, IBM had narrowed their goal down to just one: doubling earnings in five years. To do that, they went on a tear buying back their stock to shrink the float and spread their earnings over fewer and fewer shares. This propped up earnings per share, but meant that capital investments languished—IBM was like the locomotive running down the tracks with the railroad engineer ordering train cars to be stripped of their wood and thrown into the fire to speed the train up! It's not a sustainable strategy at all.

It's no coincidence that IBM was the worst performing Dow stock last year, losing 20% of its value. Montier contrasts IBM's dismal performance with another Dow stock, Johnson & Johnson, which has stuck with an enduring set of goals:

We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products… We are responsible to our employees… We are responsible to the communities in which we live and to the world community as well… Our final responsibility is to our stockholders...When we operate according to these principles, the stockholders should realize a fair return.
Montier says:
The contrast between the two firms couldn’t be much greater. Whilst IBM targeted SVM, Johnson & Johnson thought shareholders should get a “fair return.” Yet, Johnson & Johnson has delivered considerably more return to shareholders than IBM has managed over the same time period.
The real problem comes from aligning managerial pay to stock performance. This is something we've been saying for some time now. When managerial pay comes from stock performance, managers will focus on the very short term and abandon strategies which bolster long term performance and hurt short term profits. The stock market is the sole focus for managers when this happens. Investments in plant and equipment, as well as research and development are avoided in order to buy back shares and distribute dividends to investors. Given this “pay me a lot now” attitude, the length of time corporate management sticks around the executive suite is dropping—”take the money and run” becomes the ongoing mantra.

Montier argues that SVM shares responsibility for the following negative trends:

  • declining and low rates of business investment;
  • rising inequality; and
  • a low labour share of GDP.

The fact that private firms invest twice as much as public firms simply confirms the pernicious trends in public companies. Public company management is returning capital to shareholders at a rate more than twice the historical average (50% versus 10-20% before the Global Financial Crisis). That returned capital is foreclosing the future for public companies. Capital returned to shareholders isn't going into the kinds of investments we need for a better future. In a very profound way, SVM is setting our economy up for long term failure.

If shares were undervalued, buybacks would make sense. But Montier writes:

Now, if one were feeling charitable, one might choose to suggest that there just weren’t many new investment opportunities, and thus this return of capital was a perfectly reasonable thing to do. If this were the case, one might hope that the buybacks were done at prices that were below intrinsic value (since this would have genuinely improved the lot of shareholders). However, as Exhibit 14 shows, this hasn’t been the case. When market valuations were high (prior to the financial crisis) a record number of buybacks were conducted. Conversely, at the market lows, firms were hardly doing any buybacks at all. As Warren Buffett said in his letter to shareholders back in 1999, “Buying dollar bills for $1.10 is not a good business for those who stick around.”
Income inequality is one of the biggest long term problems. Montier demonstrates that SVM is a primary contributor to the problem:
We can see this has been a driving force behind the rise of the 1% thanks to a study by Bakija, Cole, and Heim (2012). The rise in incomes of the top 1% has been driven largely by executives and those in finance. In fact, executives and those in finance accounted for some 58% of the expansion of the income for the top 1%, and 67% of the increase in incomes for the top 0.1% between 1979 and 2005. Thus, there can be little doubt that SVM has played a major role in the increased inequality that we have witnessed.
Montier comes to the following conclusions:
Shareholder’s Lesson

Firstly, SVM has failed its namesakes: it has not delivered increased returns to shareholders in any meaningful way, and may actually have led to poorer corporate performance!

Corporate’s Lesson

Secondly, it suggests that management guru Peter Drucker was right back in 1973 when he suggested “The only valid purpose of a firm is to create a customer.” Only by focusing on being a good business are you likely to end up delivering decent returns to shareholders. Focusing on the latter as an objective can easily undermine the former. Concentrate on the former, and the latter will take care of itself. As Keynes once put it, “Achieve immortality by accident, if at all.”

Everyone’s Lesson

Thirdly, we need to think about the broader impact of policies like SVM on the economy overall. Shareholders are but one very narrow group of our broader economic landscape. Yet by allowing companies to focus on them alone, we have potentially unleashed a number of ills upon ourselves. A broader perspective is called for. Customers, employees, and taxpayers should all be considered. Raising any one group to the exclusion of others is likely a path to disaster. Anyone for stakeholder capitalism?