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They just announced third quarer results, which were stellar, but guided downwards for the rest of the year and 2009. But the policy they are following as a result is to invest only their free cashflow into new capacity, and that seems to us to all but guarantee their survival. The current stock price doesn’t make any sense to us. [Read more →]

The new alternative energy initiatives in France are absolutely massive. Bravo to France, and considering this is actually the one market where alternative energy makes less sense, due to the large installed base of nuclear energy (80% of electricity generation!) it’s even more phenomenal. So if France can commit to alternative energy, so can others. Europe is showing the way. We think the long decline in solar stocks might be coming to an end, especially if Obama and other European countries deliver, which seems a pretty good bet. Now is the time to take radical measures… [Read more →]

Guess who wrote this: “I don’t see why conservatives ought to defend a system that permits securitizing mortgages (or car loans) in a way that seems to make the lenders almost unaccountable for the risk while spreading it, toxically, everywhere else. I don’t see why a commitment to free markets requires permitting banks or bank-like institutions to leverage their assets at 30 to 1. There’s nothing conservative about letting free markets degenerate into something close to Karl Marx’s vision of an atomizing, irresponsible and self-devouring capitalism.” [Read more →]

We’re not in favour, we think that a Chapter 11 reorganization would be much better, but we recognize that no solution is perfect. Big retrenchment is unavoidable anyway [Read more →]

We wrote about the Pickens plan before, it’s a bridging plan to wean the US off (foreign) oil by using wind energy for electricity production and natural gas for driving vehicles. Just as Boone’s investments, it has hit some snags, but that’s not stopping the 80 year old billionaire..

Oil billionaire revises plan to reduce foreign oil imports
Oil tycoon puts hold on wind farm, touts natural-gas vehicles
by Ryan Randazzo - Nov. 12, 2008 12:00 AM
The Arizona Republic

• Billionaire T. Boone Pickens said that his Texas wind farm is on hold because natural-gas prices have dropped but that his plan for wind power and natural-gas vehicles is still viable to reduce foreign oil imports.
• The Texas oil tycoon spoke Tuesday to about 650 utility and investment officials gathered in Phoenix for the Edison Electric Institute Financial Conference.
• Pickens launched an advertising campaign last summer to promote wind farms to generate electricity and to use natural gas to power vehicles.
• “I’m the only person in the United States that has a plan,” he said. “Senator Obama and his people have been in touch with mine. They see the merits of what we are doing.”
• Pickens said the U.S. needs to exploit all its resources, from solar power in Arizona to coal and nuclear energy, but that few things could cut foreign oil imports quickly.
• He said neither Obama’s plans for 1 million plug-in hybrid vehicles nor John McCain’s plans for 45 more nuclear plants would make a dent in oil imports, but semitrucks fueled by natural gas could reduce oil demand for the next 20 years before better transportation technology is available.
• “It’s a bridge to the next generation, which will probably be the battery, the fuel cell,” he said. “It won’t be the hydrocarbon.”
• But the current drop in oil and natural-gas prices is slowing things down.
• Until natural-gas prices rise, Pickens said his wind farm and most others in the country will not go forward because electricity from gas plants will be more economical. Still, he was confident prices would rise.
• He said Americans haven’t understood the nation’s energy challenges because prices have been low, until last summer when oil hit a record $147 a barrel.
• You haven’t had the leadership in Washington to tell us what the problem was,” he said. “The American people did not realize where we were. When oil went to $100, I had a story to tell.”
• Steven Dreyer, managing director at Standard and Poor’s, credited Pickens for raising awareness.
• “Arguably, for the first time, ordinary people were able to connect the dots between carbon reduction and energy,” Dreyer said.
• Ron Insana, managing director of SAC Capital Advisors and former CNBC commentator, questioned Pickens about how he will benefit financially by such a plan through his wind farm and large stake in Clean Energy Fuels Corp., a natural-gas, vehicle-fueling company.
• Pickens described his potential to profit from wind and natural gas but said his motivations are patriotic. “I’d rather be playing golf at the Del Mar Country Club this afternoon,” Pickens said. “But I truly believe this is good for the country.”
• Pickens believes that global oil production has already “peaked” and that it will continue to become scarcer and more expensive, despite the current lull in gas prices. He is founder and chairman of energy-investment company BP Capital and founded Mesa Petroleum, a natural-gas and oil producer. He is a geologist by training.
• “When I launched my plan July 8, gas prices were $4.11 a gallon, and now they’re half that. I think I’ve done a pretty good job,” he said to chuckles from the audience.
• He predicted oil, which closed Tuesday at $59, to be $100 a barrel within a year, and could be $300 a barrel by 2018. Pickens supports domestic drilling but said that can’t come close to meeting daily U.S. oil demand.
• He is scheduled to return Dec. 11 for a presentation to the Greater Phoenix Chamber of Commerce, and tickets are available to the public. Details are available at www.phoenixchamber.com.

When you’re name is attached to an idea, it’s hard to change track. In fact, the incentives are such (especially if you have no other interesting idea anymore) to get as much milage out of it as possible. This is what Arthur Laffer does, yes, the one from that curve on a napkin that was supposed to show that if you lower taxes, especially those on top incomes, tax revenues go up. It is nonsense, of course. [Read more →]

Sometimes Wall Street really doesn’t get it. Numerous economist (us included) have argued numerous times from the sidelines that the original Paulson plan was bad. We have aslo argued that Gordon Brown’s plan was much better. Finally, Paulson gives in, but the market sees this as a sign to sell.. [Read more →]

Here it is, highlights are from us. [Read more →]

Just as we wrote that ultimately, the limits of monetary policy in a deflationary environment can be overcome with the help of a great public spending boost (guaranteeing that the newly created money will actually be spend and result in the purchase, and hence production of goods and services), out comes China, although not monetary financed, as this is not (yet?) necessary in China, which still has a sound budget and public debt position, at least until now. It’s a big plan as well, almost a fourth of GDP! [Read more →]

It’s not without risk, but these risks are further away, and they can be dealt with. [Read more →]