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Wednesday, December 30, 2015

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Bonds nearing an important buy signal now.

Tuesday, December 29, 2015

Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Risk-on returns as oil and stocks bounce and bonds take gas.

Monday, December 28, 2015

Monday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. "Buy bonds" proved profitable on Monday. Has Santa left the building?

Sunday, December 27, 2015

Seasonals Continue This Week in the Energy Markets

#SubscriberNotes #WeekendAnalysis reports have been updated on the website. Santa brought a January Effect rally last week.

Wednesday, December 23, 2015

Global Warming Brings a Blue Christmas to Texas

A White Christmas is rare in Texas, but climate change may be responsible for the first Blue Christmas this year. The state flower—bluebonnets—normally bloom in spring. But, reports are that the bluebonnets are being fooled by global warming and blooming months early this year.

Somebody should tell Ted Cruz. He's a science denier. If the bluebonnets are blooming early, it shows how big changes are happening to our climate.

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Santa Clause Rally boosts stocks, but pummels bonds. Reversal coming?

Tuesday, December 22, 2015

Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. A weak DXY helped lift equities today. Bonds could be close to a change-in-trend.

Monday, December 21, 2015

Monday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Has volatility been drained from the market? Mahoney has Christmas Day to be a high on his Panic Scale.

Do We Need the Fed?

By Ron Paul, originally published at Ron Paul Institute

Stocks rose Wednesday following the Federal Reserve’s announcement of the first interest rate increase since 2006. However, stocks fell just two days later. One reason the positive reaction to the Fed’s announcement did not last long is that the Fed seems to lack confidence in the economy and is unsure what policies it should adopt in the future.

At her Wednesday press conference, Federal Reserve Chair Janet Yellen acknowledged continuing “cyclical weakness” in the job market. She also suggested that future rate increases are likely to be as small, or even smaller, then Wednesday’s. However, she also expressed concerns over increasing inflation, which suggests the Fed may be open to bigger rate increases.

Many investors and those who rely on interest from savings for a substantial part of their income cheered the increase. However, others expressed concern that even this small rate increase will weaken the already fragile job market.

These critics echo the claims of many economists and economic historians who blame past economic crises, including the Great Depression, on ill-timed money tightening by the Fed. While the Federal Reserve is responsible for our boom-bust economy, recessions and depressions are not caused by tight monetary policy. Instead, the real cause of economic crisis is the loose money policies that precede the Fed’s tightening.

When the Fed floods the market with artificially created money, it lowers the interest rates, which are the price of money. As the price of money, interest rates send signals to businesses and investors regarding the wisdom of making certain types of investments. When the rates are artificially lowered by the Fed instead of naturally lowered by the market, businesses and investors receive distorted signals. The result is over-investment in certain sectors of the economy, such as housing.

This creates the temporary illusion of prosperity. However, since the boom is rooted in the Fed’s manipulation of the interest rates, eventually the bubble will burst and the economy will slide into recession. While the Federal Reserve may tighten the money supply before an economic downturn, the tightening is simply a futile attempt to control the inflation resulting from the Fed’s earlier increases in the money supply.

After the bubble inevitably bursts, the Federal Reserve will inevitability try to revive the economy via new money creation, which starts the whole boom-bust cycle all over again. The only way to avoid future crashes is for the Fed to stop creating inflation and bubbles.

Some economists and policy makers claim that the way to stop the Federal Reserve from causing economic chaos is not to end the Fed but to force the Fed to adopt a “rules-based” monetary policy. Adopting rules-based monetary policy may seem like an improvement, but, because it still allows a secretive central bank to manipulate the money supply, it will still result in Fed-created booms and busts.

The only way to restore economic stability and avoid a major economic crisis is to end the Fed, or at least allow Americans to use alterative currencies. Fortunately, more Americans than ever are studying Austrian economics and working to change our monetary system.

Thanks to the efforts of this growing anti-Fed movement, Audit the Fed had twice passed the House of Representatives, and the Senate is scheduled to vote on it on January 12. Auditing the Fed, so the American people can finally learn the full truth about the Fed’s operations, is an important first step in restoring a sound monetary policy. Hopefully, the Senate will take that step and pass Audit the Fed in January.

Copyright © 2015 by RonPaul Institute. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are given.
Please donate to the Ron Paul Institute

Sunday, December 20, 2015

Last Week's Results In The Wall Street Bucket Shops

#SubscriberNotes #WeekendAnalysis have been updated on the website. Volatility rules in stock and bond markets.

Friday, December 18, 2015

The Booming Solar Market: An Entrepreneurial Opportunity

Mike Munsell of Greentech Media writes:

The ITC extension currently written into the omnibus spending bill will result in a 20-gigawatt annual solar market in the U.S. by 2020.

A five-year extension to the solar investment tax credit (ITC), which is currently included in the omnibus spending bill under consideration in Congress, would result in 25 gigawatts (GW) of additional solar capacity over the next five years -- a 54 percent increase over a no-extension scenario. According to GTM Research, which just released a preliminary updated state- and segment-level forecasts based on the current omnibus language, ITC extension will foster $40 billion in incremental investment in solar between 2016 and 2020.

FIGURE: U.S. PV Installations With and Without ITC Extension, 2010-2020

Source: GTM Research

"The ITC extension currently written into the omnibus spending bill will result in a 20-gigawatt annual solar market in the U.S. by 2020," said Shayle Kann, senior VP of GTM Research. "At that rate, more solar will be installed each year than was added to the grid cumulatively through 2014."

Compare that projection to the total amount of solar added during 2015: just 3 gigawatts. Clearly, this slow-growth economy has a pocket of high growth within it.

Thursday, December 17, 2015

Thursday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Santa is MIA, but our signals are working profitably.

Sustainable Non-Fossil Fuel Energy Is Within Reach

Elon Musk explains what it will take to tap into an endless source of free energy in this talk he gave in Paris on December 2nd:

In an interview on December 15 at the American Geophysical Union meeting, Musk mentioned that if we covered just a corner of Utah or Nevada with solar panels, we could power the entire US, as Nature News' Lauren Morello reported.

Wednesday, December 16, 2015

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Long term rates are heading lower, not higher. The TV journalists get it wrong.

Solar Savings

According to Solar City, their customers have reaped the following benefits by going solar: Estimated savings by their customers so far: $145,800,888 and
2,462,014 Tons of CO2 conserved by their customers and counting

Equivalent to not driving a car for 5,827,884,920 miles or avoiding the use of 1,402,645,723 gallons of water.

Solar City Urges Congress To Boost Solar and Fight Climate Change

WASHINGTON, Dec. 16, 2015 /PRNewswire/ -- SolarCity urged Congress to swiftly pass comprehensive legislation that includes an extension of the Investment Tax Credit (ITC) for solar. The provision, included in sweeping appropriations and tax bills introduced by House Speaker Paul Ryan today, is the result of weeks-long bipartisan negotiations between Senate and House leaders.

The proposed legislation would follow on the heels of the historic global climate agreement in Paris, where 195 countries committed to tackle climate change and galvanize greater investment in clean energy. Consistent, long-term policies supporting solar energy, along with other clean energy sources, are critical to the growth of a lower-carbon economy. This week, analysts told the National Journal that lifting the ban on crude oil exports would have a negligible impact on U.S. carbon emissions, while greater support and certainty for solar could more than double the nation's total installed solar capacity.

"On behalf of over 15,000 employees here in the U.S. and nearly 300,000 customers, SolarCity applauds the bipartisan agreement that prioritizes the growth of solar in the United States," said SolarCity CEO Lyndon Rive. "Using clean energy is the most important step an individual can take to address climate change and protect future generations. Combined with the historic Paris climate agreement, long-term certainty for the ITC sends a strong signal to the marketplace that investment in clean energy is the right way to drive continued economic growth and job creation. We urge Congress to act quickly to enact the measure."


The ITC, which was set to expire at the end of 2016, is a 30% federal tax credit for businesses (under Section 48 of the tax code) and homeowners (under Section 25D) to incentivize installation of solar energy systems, fuel cells, combined heat and power systems, microturbines, small wind systems, and geothermal heat pumps.

Since its creation in 2006, the ITC has delivered job growth, cost reductions, and domestic energy deployment across the country.

About SolarCity
SolarCity (SCTY) provides clean energy. The company has disrupted the century-old energy industry by providing renewable electricity directly to homeowners, businesses and government organizations for less than they spend on utility bills. SolarCity gives customers control of their energy costs to protect them from rising rates. The company makes solar energy easy by taking care of everything from design and permitting to monitoring and maintenance. SolarCity currently serves 19 states. Visit the company online at and follow the company on Facebook & Twitter.

SolarCity is an Equal Opportunity / Affirmative Action employer committed to diversity in the workplace. All qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, national origin, disability, protected veteran status, gender identity or any other factor protected by applicable federal, state or local laws.

This release contains forward-looking statements including, but not limited to, statements regarding projections as to manufacturing timelines, volume and costs. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward looking statements. You should read the section entitled "Risk Factors" in SolarCity's quarterly report on Form 10-Q, which has been filed with the Securities and Exchange Commission and identifies certain of these and additional risks and uncertainties. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

To view the original version on PR Newswire, visit:

Tuesday, December 15, 2015

Turnaround Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. The Fed hikes rates, the economy goes into recession. Will they be blamed?

Monday, December 14, 2015

Monday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Ready for Turnaround Tuesday?

Ben Hunt's Storm Warning

Ben Hunt thinks there's a storm coming in the markets. He published a note today called Storm Warning:
Can everyone saying “a 25 bps rate hike doesn’t change anything” or “manufacturing is a small part of the US economy today, so the ISM number doesn’t mean much” or “trade with China is only a few percent of US GDP, so their currency devaluation isn’t important” just stop? Seriously. Can you just stop? Maybe if you were making these statements back in the ‘80s – and by that I mean the 1880s, back when the US was effectively a huge island in the global economy – it would make some sense, but today it’s just embarrassing.

There is a Category 5 deflationary hurricane forming off the Chinese coast as Beijing accelerates the devaluation of the yuan against the dollar under the guise of “reform”. I say forming … the truth is that this deflationary storm has already laid waste to the global commodity complex, doing trillions of dollars in damage. I say forming … the truth is that this deflationary storm has driven inflation expectations down to levels last seen when the world was coming to an end in the Lehman aftermath. And now the Fed is going to tighten? Are you kidding me?

Look, I’m personally no fan of ZIRP and QE and “communication policy”, certainly not the insatiable market devourers they’ve become over the past few years. But you can’t just wish away the Brave New World of globally interlocked, policy-driven, machine-dominated capital markets in some wave of nostalgia and regret for “normalized” days. In an existential financial crisis, emergency government action always becomes permanent government policy, reshaping markets in similarly permanent ways. This was true in the 1930s and it’s true today. It’s neither good nor bad. It just IS. Did QE1 save the market? Yes. Did QE2 and QE3 and all the misbegotten QE children in Europe and Asia break the market? Yes. And in the immortal words of shopkeepers everywhere: you break it, you bought it. The Fed owns capital markets today, like it or not, and raising rates now, as opposed to a year ago when there was a glimmer of a chance to walk back the Narrative of central bank omnipotence, isn’t “brave” or “prudent” or “necessary” or any of the other laudatory adjectives you’ll hear from Fed media apologists after they raise. It’s simply buyer’s remorse. The Fed is sick and tired of owning the market, sick and tired of giving interviews to CNBC every time some jobs report hits the wires, sick and tired of this Frankenstein’s monster called communication policy. So they’re going to raise rates, declare victory, and hope that things go their way.

Am I annoyed by China’s currency actions and their adept use of communication policy to shape the Narrative around devaluation? Not at all. This is exactly what China must do to bolster economic growth while maintaining the pleasant diplomatic fiction that they’re not a command economy. What annoys me is the Fed’s apparent hell-bent intention to force a low-level currency war with China AND whack our own manufacturing and industrial base on the kneecaps with a crowbar, just so they can get out of the communication policy corner they’ve painted themselves into.

Three or four years ago, one of THE dominant market narratives, particularly in the value investment crowd, was the “renaissance of American manufacturing”. Not only was the manufacturing sector going to be the engine of job growth in this country (remember “good jobs with good wages”? me, neither), but this was going to be the engine of economic growth, period (remember the National Export Initiative and “doubling exports in five years”? me, neither). Now we are told that we’re just old fogies to worry about a contracting US manufacturing sector. Now we are told that a global recession in the industrial and commodity complex is well contained here in our vibrant services-led economy. Right. You want some fries with that?

So what’s to be done? You do what you always do in a deflationary, risk-off world – you buy long-dated US Treasuries. Stocks down, USTs up. Of course, if you think that the yield curve is going to steepen after the Fed does whatever it’s going to do this week … you know, because the Fed rate hike is obviously an all-clear sign that we have a robust self-sustaining economic recovery and we’re off to the races … then you want to do the exact opposite, which is to buy stocks and sell the 10-year UST. Yep, time to load up on some bank stocks if that’s your view.

What else can you do? You can read the Epsilon Theory note “I Know It Was You, Fredo” and consider ways to make your portfolio more convex, i.e., more resilient and responsive to both upside and downside surprises in these policy-driven markets. The big institutional allocators use derivative portfolio overlays to inject convexity into their portfolio, and that’s all well and good. But there are steps the rest of us can take, whether that’s adopting strategies that can short markets and asset classes (like some tactical strategies and most trend-following strategies) or whether that’s investing in niche companies and niche strategies that are designed to outperform in either a surprisingly deflationary or a surprisingly inflationary world. The trick really isn’t to choose this fund or that fund. The trick is to broaden your perception of portfolio outcomes so that you don’t have a misplaced faith in either the Fed or econometric models.

I suppose there’s one more thing we should all do. We should all prepare ourselves to perform some emergency surgery on the deck of whatever portfolio ship we’re sailing in 2016. Because with a Fed hike the currency wars will begin in earnest, magnifying the deflationary storm already wreaking havoc in industrials, energy, and materials. No sector or strategy is going to be immune, and we’re all going to suffer some casualties.

Sunday, December 13, 2015

Last Week's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. #WeekendAnalysis will be available later today on the website.

Saturday, December 12, 2015

Goldman Sachs: Investors Should Be Focused on 4 Technologies for Maximum Climate Impact

The investment bank urges investors to focus on solar, wind, LEDs and electric cars for maximum climate impact.

Stephen Lacey of GreentechMedia writes:

A perennial debate has once again emerged at this year's U.N. climate talks: in order to make a meaningful dent in carbon emissions, do we need to invest more in R&D or more in the deployment of existing technologies?

The world's largest investment bank, Goldman Sachs, is now weighing in.

In a report issued this week, Goldman concluded that the most effective mid-term solution for lowering carbon emissions -- and making money -- is backing existing technologies that are ready to scale. In fact, analysts at the bank believe that the majority of investor dollars should go to only four technologies: solar photovoltaics, onshore wind, LED lighting and electric cars.

"We believe investors should focus on this set of front-runners with the potential to shift emission trajectories and reshape competitive dynamics on a five- to 10-year view," wrote the group of analysts.

These four areas collectively make up the vast majority of the low-carbon investment opportunity, which Goldman values at $600 billion a year.  

"There are many other low-carbon technologies that either lack the scale or the momentum to drive significant large-scale global change in 2015-2025. They include: (1) mature technologies with relatively slow, stable growth trajectories; (2) early-stage technologies that have growth but still lack scale; and (3) technologies that are gradually losing regulatory support," wrote the Goldman analysts.

Those technologies include biofuels, nuclear, large hydro, carbon capture, marine power and offshore wind. 

The report's findings contradict the conclusions of some of the world's top tech billionaires, who believe far more money needs to flow into early-stage technologies in order to radically improve upon the cost and performance of intermittent renewables. This week, those billionaires formed the Breakthrough Energy Coalition and pledged to spend far more on cleantech R&D.

“The existing system of basic research, clean energy investment, regulatory frameworks, and subsidies fails to sufficiently mobilize investment in truly transformative energy solutions for the future,” states the coalition's website.

It's not surprising that the bankers at Goldman Sachs, who are focused on profits, see the world differently than tech CEOs who are willing to fund risky ideas that may not pay off for decades. 

Goldman isn't betting against technologies outside of its four preferred areas. Instead, the bank is focused on the "greatest market dislocations" between now and 2025. Solar PV, wind, electric cars and LEDs are the technologies best prepared to erode fossil-fuel consumption within that timeframe.

By 2020, wind and solar alone will be producing the oil equivalent of 6.2 million barrels per day -- adding more energy to the global supply, as American shale producers did from 2010-2015.

"We expect wind and solar to account for over half of (capacity-adjusted) new installations in electricity generation capacity by 2025. In energy terms, this now puts the phenomenon of solar PV and onshore wind on par with U.S. shale oil production," wrote the Goldman researchers.

In order to limit the global temperature increase to 2 degrees Celsius, climate scientists say greenhouse-gas emissions need to peak by around 2020. On their current trajectories, solar PV and wind could eliminate 5 gigatons of carbon dioxide emissions each year by 2025 -- or about one-sixth of the emissions pumped into the atmosphere globally in 2014

The Goldman report only looks at macroeconomic trends. It does not consider the limitations of conventional renewables due to grid constraints, land-use conflicts or performance. Some argue those factors will create an upper limit to the amount of wind and solar that can be deployed on grids around the world. 

study released by MIT this week backs up Goldman's conclusions about installation and cost trends. After examining the climate pledges of countries around the world, MIT researchers found that conventional wind and solar would be the biggest beneficiaries of carbon reduction efforts. 

According to the report, global solar installations will grow fivefold and wind will grow nearly threefold by 2030 under voluntary carbon-reduction plans established by countries. This could result in a 50 percent cost reduction for solar PV and a 25 percent cost reduction for wind by that date. 

Friday, December 11, 2015

Deflationary Signs

Damn the Matrix stays on top of the accelerating global deflationary trend:

Researchers at the University of East Anglia, UK, and the Global Carbon Project found that carbon emissions could decline by 0.6% in 2015, a departure from a decade of growing 2.4% per year. The research, published in Nature Climate Change, attributes the decline to a reduction in China’s coal consumption as its economy slows and it moves to cleaner, renewable energy sources.

“China is trying to deal massively with its air pollution problem,” says study co-author Corinne Le Quéré, director of the Tyndall Centre for Climate Change Research at the University of East Anglia in Norwich. “And its renewables are growing very fast.”

The results are in line with a pair of analyses released earlier this year by the Netherlands Environmental Assessment Agency and the International Energy Agency, which show the rate of global emissions growth slowing significantly in 2014.


Thursday, December 10, 2015

Thursday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. The Santa Rally is due to happen very soon now.

Wednesday, December 09, 2015

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Will Santa Claus(e) appear on Wall St this year? Seasonals say yes.

Tuesday, December 08, 2015

"Magical Thinking": Will Staying Below 2C Save the Earth?

The politicians love to think that staying below at 2°C rise in average global temperatures over the years 1800-present will somehow “save the planet.” If you believe that, you have yet to realize politicians lie with the regularity of sunrise.

538 points out why The 2-Degree Warming Limit Is Arbitrary And Beside The Point:

Two degrees became the default goal almost by happenstance. The number originated with Yale economist William Nordhaus, who back in the 1970s published a paper suggesting that a rise in global temperature of more than 2 degrees would represent temperatures hardly seen over the past several hundred thousand years. Nordhaus’s number was based on preliminary intuition, though climate data has confirmed that during the past 100,000 years, global mean temperatures have rarely, if ever, reached much higher than 2 C above those around 1800.

Two degrees isn’t a magic number that will somehow hold catastrophe at bay. We have already nearly arrived at a 1-degree temperature rise, and as Reto Knutti and his colleagues argue in this week’s Nature Geoscience, the 2-degree goal is not a scientific one. Although the 2-degree limit is often referred to as a “guardrail,” Knutti told me, “there’s no scientific research to show that 2 degrees of warming is safe.” And there’s a reason for that — science alone can’t determine what’s an unacceptable level of danger.

The best analogy for this, he said, is speed limits on roads. “You could quantify the risk of dying at certain speeds, but even if you could quantify that perfectly, it would still not tell us what speed limit is appropriate — that’s a judgment call,” he said. Set a universal speed limit of 30 mph, and the roads are safer. But now it takes a long time to get places. On the other hand, if the speed limit is set very high, people can get to their destinations faster — but the roads become more dangerous. Science alone can’t determine the right middle ground between these two extremes.

The 2-degree limit is similarly a compromise between costs, benefits and risks. Set the warming limit too high, and it may not inspire the appropriate urgency. Set it too low, and it may be so strict that countries don’t sign on to the agreement because they’re afraid their economies will become too stunted if they have to stop using fuels that produce emissions. Given the social, political, and economic factors at play, science can’t provide a one-size-fits-all solution. Climate change affects regions and countries differently, and it’s difficult to precisely predict at which temperatures and greenhouse gas emission levels climate change will become unbearable. Residents of the Persian Gulf region may cry uncle sooner than those living in northern climates, and island states will feel the change before landlocked countries.

Determining where to draw the line requires judgment calls as well as science. It’s a question of priorities. For instance, Knutti said, the world could ask itself, “Do you care or not if the polar bear goes extinct?” There are reasons polar bears might matter: They’re icons of the fight against global warming, and their extinction might be a harbinger of a cascade of habitat changes that could ripple down the food chain. But on the other hand, setting a temperature limit to save the polar bear may not allow for a developing country to hit its GDP target. Which matters more to the world at large?

There’s not always agreement about what the priorities should be, obviously. Developed nations made their wealth with fossil fuels, and they aren’t going to give them up if that would require relinquishing the lifestyles they’ve become accustomed to. Even staunch environmentalists tend to go green only as long as it’s convenient.

Meanwhile, poor countries would like to develop their economies and lift their standards of living. But doing so without the fossil fuels that got the rest of the world there is an expensive challenge, especially as they face more extreme weather events because of climate change.

Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Where is Santa Claus(e) this year? Will the 'bots be good elves and make put options disappear into expiration?

Monday, December 07, 2015

Monday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. If we're to have a Santa Rally this year, we need a buy signal in a key broad market instrument soon.

Sunday, December 06, 2015

Last Week's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. #WeekendAnalysis to follow shortly. Seasonal uptrend in equities persists.

Saturday, December 05, 2015

Fighting Socialism: Monopoly Utilities Want To Kill Solar

Conservative Republicans have gotten the message: Monopoly utilities want to extinguish the independent rooftop solar market in America to protect their socialist control of how we get our electricity.

They have engaged in class warfare and tried to sabotage net metering, a billing method that gives individual homeowners fair credit for power produced on their own rooftops. They would like to deny us Americans energy choice and maintain their monopoly status.

Chairman of Don't Kill Solar, Barry Goldwater, Jr writes:

As a son of Arizona, I know we have no greater resource than the sun. Republicans want the freedom to make the best choice and the competition to drive down rates.That choice may mean they save money, and with solar that is the case. Solar companies have a track record of aggressively reducing costs in America. We can't let solar energy — and all its advantages and benefits it provides us — be pushed aside by monopolies wanting to limit energy choice. That's not the conservative way and it's not the American way.

Friday, December 04, 2015

"We will lose half our coastal cities": Jim Hansen

The COP21 Climate Talks in Paris aim to limit global warming to 2°C this century, but James Hansen, who sounded the warming warning way back in 1988 says:

What I am hearing is that the heads of state are planning to clap each other on the back and say this is a very successful conference. If that is what happens, we are screwing the next generation, because we are doing the same as before.

[A rise of ] 2C is definitely dangerous. We are at the point now where temperatures are hitting the 1C mark and are are on a path above 1C. Even if we reduce emissions 6% a year we will still get 1C.

Instead we hear the same old thing as Kyoto [in 1997]. We are asking each country to cap emissions, or reduce emissions. In science when you do a well conducted experiment you expect to get the same result. So why are we talking about doing the same again? This is half-arsed and half-baked.

Hansen, who was speaking at a climate summit for the first time, said the planet was out of energy balance. “There is more warming in the pipeline that will take us into real danger. We are on the edge of handing our children a climate system that is out of control, and that could mean losing half our coastal cities.”

Thursday, December 03, 2015

Thursday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. The big move in bonds was tipped here first.

Elon Musk Can Be Wrong

Rockstar entrepreneur Elon Musk is right most of the time. But, he can certainly be wrong. We've written before that he's wrong about Lithium-ion battery technology as he's betting the future of Tesla on that obsolete technology. We will be proven correct in the long run and Musk may very well snap to the facts. The inventor of Lithium-ion battery technology agrees with us, by the way.

Today, we find that Musk thinks that we can only solve the Climate Change problem with a Carbon Tax. Well, there's another thing Musk is wrong about. What will solve the problem is technology. Strangely enough, we agree with Bill Gates on this point. We read in Fortune that:

As world leaders and policymakers continue climate negotiations in Paris, serial entrepreneur Elon Musk appealed to a younger, seemingly less powerful group to help prevent global warming.

His message: only a carbon tax—not innovation, conservation, or renewable energy—will accelerate the transition from carbon-producing fossil fuels to sustainable energy.

“I think you have tremendous power—you have the power to make change,” Musk told students during a conference at the Sorbonne in Paris, just a 30-minute drive from the 2015 U.N. Climate Change Conference, where negotiations are underway to pass an international treaty that would cut emissions enough to prevent the world’s temperature from rising 2 degrees Celsius.

Musk, who has pushed for a carbon tax before, said the tax should be revenue neutral and phased in over a period of years. A revenue neutral tax means governments would still receive the same amount of money despite a change in the tax code. Under Musk’s scenario, taxes would be weighted heavily on carbon, and reduced in other areas. This approach already occurs, Musk said, citing how taxes are higher on cigarettes and alcohol than fruits and vegetables.

Musk encouraged students to press politicians to take action on climate change because “governments respond to popular pressure.”

Eventually, the world will run out of carbon to mine and burn, and will have to move to sustainable energy, Musk predicted at the conference. A hidden subsidy that benefits all carbon-producing activity—about $5.3 trillion annually, according to the IMF—is delaying that transition, he said.

The net result of this “untaxed negative externality” is 35 gigatonnes of carbon per year being emitted into the atmosphere—additional carbon that Musk described as the “turd in the punch bowl.”

Musk, who is chief executive of all-electric automaker Tesla Motors and aerospace manufacturer SpaceX, said governments, which set how companies are rewarded financially, must send a clear message.

“The fundamental problem is the rules today incent people to create carbon; this is madness,” Musk said. “So what can you do? Whenever you have the opportunity, talk to your politicians, ask them to enact a carbon tax.” Musk also encouraged the audience to talk to their friends about it and to “fight the propaganda from the carbon industry,” which he compared to the tobacco industry’s often spurious strategies to convince consumers smoking is safe.

This idea that government has to coerce the public into doing the right thing is where conservatives lose patience with environmentalists. We say let the market decide which is the best course of action. Let the technology force the outcome. And, we think the market is going to tell the fossil fuel industry to keep their polluting fuel in the ground. That's because we have an unlimited supply of clean green fuel for our energy coming from 93 million miles in the sky. We can take this free energy and store it in advanced batteries and have it available at any time in the future. We can create electric transportation and store that solar energy to put to use in transporting goods from place to place on the surface of this planet—and in the air as well. It's called solar+storage and it's now cheaper than burning polluting fossil fuel in many parts of the planet. Let the market decide, not government. Tell politicians to keep their greedy hands off the economy. You know that if the politicians pass a tax, they'll find a way to funnel some of those funds into the hands of their sponsors in industry. The public will pay higher taxes and receive no benefits from the tax while some gets funneled into corporate coffers that finds its way back into politicians' pockets.

Wednesday, December 02, 2015

Wednesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Today was a significant change-in-trend day. We're adding significant indicators to our daily chart rotation.

Getting Rid of Fossil Fuel Before It's Too Late

The Breakthrough Energy Coalition aims to spur the transition away from fossil fuels to sustainable (and non-polluting energy) via private-public partnerships. See Introducing the Breakthrough Energy Coalition:

THE WORLD NEEDS WIDELY AVAILABLE ENERGY that is reliable, affordable and does not produce carbon. The only way to accomplish that goal is by developing new tools to power the world. That innovation will result from a dramatically scaled up public research pipeline linked to truly patient, flexible investments committed to developing the technologies that will create a new energy mix. The Breakthrough Energy Coalition is working together with a growing group of visionary countries who are significantly increasing their public research pipeline through the Mission Innovation initiative to make that future a reality.

The real problem is in commercializing the sustainable energy breakthroughs we already have. Consequently, this part of the initiative will end up being far more important:

Government research, however, is not enough. We must also add the skills and resources of leading investors with experience in driving innovation from the lab to the marketplace. The private sector knows how to build companies, evaluate the potential for success, and take the risks that lead to taking innovative ideas and bringing them to the world. But in the current business environment, the risk-reward balance for early-stage investing in potentially transformative energy systems is unlikely to meet the market tests of traditional angel or VC investors – not until the underlying economics of the energy sector shift further towards clean energy. Experience indicates that even the most promising ideas face daunting commercialization challenges and a nearly impassable Valley of Death between promising concept and viable product, which neither government funding nor conventional private investment can bridge. This collective failure can be addressed, in part, by a dramatically scaled-up public research pipeline, linked to a different kind of private investor with a long term commitment to new technologies who is willing to put truly patient flexible risk capital to work. These investors will certainly be motivated partly by the possibility of making big returns over the long-term, but also by the criticality of an energy transition. Success will provide the economic proof points necessary for the mainstream market-driven clean energy economy required for our planetary future.

We are committed to doing our part and filling this capital need by coming together in a new coalition. We will form a network of private capital committed to building a structure that will allow informed decisions to help accelerate the change to the advanced energy future our planet needs. Success requires a partnership of increased government research, with a transparent and workable structure to objectively evaluate those projects, and committed private-sector investors willing to support the innovative ideas that come out of the public research pipeline.

  • Invest Early

    The most transformative ideas are emerging out of research institutions and the great capital gap is in getting these ideas out of the lab and on the path to commercialization. We’ll take a flexible approach to early stage, providing seed, angel and Series A investments, with the expectation that once these investments are de-risked, traditional commercial capital will invest in the later stages.

  • Invest Broadly

    We don’t know where the best ideas will come from to transition the world to a near zero-emissions energy future, so we will invest across a number of sectors:

    • a. Electricity generation and storage;

    • b. Transportation;

    • c. Industrial use;

    • d. Agriculture; and

    • e. Energy system efficiency

  • Invest Boldly

    We are looking for outliers both in developing novel technologies AND in innovations which enable current technologies to be dramatically more efficient, scalable, or cheaper. Whether core or enabling technology, the key differentiating factor must be a credible pathway to rapid scaling – providing affordable energy to the greatest number of people without overburdening essential resources including land use.

  • Invest Wisely

    One of the challenges to effective financing in this area is a lack of depth in terms of technical review and analysis of underlying science and technology to guide investment decisions. To tackle this, we will work with a coalition of the world’s best minds, in partnership with leading public and private institutions, to guide investment decision-making.

  • Invest Together

    Because the foundation of these innovations will likely come through government research pipelines, we will focus our investments on those countries that have committed to increase the size of those pipelines by participating in the international initiative known as Mission Innovation. Those countries are making a serious commitment to using smart government spending to increase the rate of innovation in their domestic innovation sector while helping the world find solutions to the serious problems created by climate change, high costs of power, and energy price volatility.

Over the next year, we will work together to develop effective and creative mechanisms to analyze potential investments coming out of the research pipeline, create investment vehicles to facilitate those investments, and expand the community of investors who join us in this endeavor.

Gates speaks to the problems we face:

Tuesday, December 01, 2015

Tuesday's Results In The Wall Street Bucket Shops

#SubscriberNotes have been updated on the website. Bonds rallied and stocks followed to the upside. Is a Change-in-Trend at hand in either market?