Bob Morris @ Oct 2nd 2008 23:23 - Category: Credit crisis ;
Put ‘em all together in a room and let their “various cannibalistic and generally sociopathic” tendencies work to our advantage by letting them destroy each other, says Paul Kedrosky.
Like they say in Texas, they needed killing.
Bob Morris @ Oct 2nd 2008 22:29 - Category: Election 2008 Tags: Biden, Palin;
As with the first presidential debate, the Democrats appear to have won among the swing voters.
And that’s really all that matters. The hard core on either side aren’t going to change and their votes aren’t in play. It’s the undecideds that both sides want.
BTW, McCain gave up on Michigan today, pulling resources out. That used to be a battleground state too.
Bob Morris @ Oct 2nd 2008 16:30 - Category: Credit crisis Tags: Ritholtz, Roubini;
Ok, maybe it’s not that bad. But Nouriel Roubini and Barry Ritholtz are not optimistic about what’s coming down the economic pike, as witness their comments on a conference call today.
Roubini is a perma-bear who used to be considered a crank about due to his predictions of a coming crisis. Now he’s considered more of a prophet.
His thoughts on the bailout:
- It’s a rush job. Legislation was written by the banks. It’s a scandal that no professional economists were consulted.
- The bailout as proposed won’t help much. The market knows this. That’s why it sold off today.
- The credit markets are currently seized up. No one is lending because no one trusts anyone or knows what the counterparty risk is. If this continues for another week or two, then there will be defaults in commercial markets and businesses won’t be able to borrow what they need. The Fed will be forced to extend lending to corporate entities in the near future.
- His solution: Drastic measures are needed. The government makes a blanket guarantee of all bank deposits of all size to prevent the “silent run on the banking system” that is happening now. They do triage. Recapitalize the banks that can survive and take the weak ones out back and shoot them in the head.
Barry Ritholtz blogs at The Big Picture, is a financial commentator, and author of the soon to be published “Bailout Nation. How Easy Money Corrupted Wall Street and Shook the World Economy”
His comments:
- Bailouts have unintended consequences, and can lead to the next bailout. When LTCM blew up, they got bailed out and “No one got stung” and the rules weren’t changed. Which inexorably led to the current crisis.
- On the current bailout: “What are the consequences of giving the most reckless players on Wall Street a pass?”
- The bailout won’t help because it solves a balance sheet problem not a capitalization problem.
The next cards to fall are commercial real estate, credit card debt, and car loan debt. What started in a seemingly isolated part of the financial markets, subprime, has spread its rot to the financial sector in general, and now to business at large. European banks are even worse than US banks, as they can be leveraged 60-to-1, rather than 30-to-1 like here.
So, things may well get even bumpier. Given the useless lame duck George Bush, it is probable that the presidential candidates will call for a blue ribbon panel of actual experts to determine what to do - which is what Congress should be doing now rather than rushing through a bad bill.
Bob Morris @ Oct 2nd 2008 11:15 - Category: Election 2008 Tags: McCain;
Bob Morris @ Oct 2nd 2008 11:03 - Category: Climate change, Energy conservation, Renewable energy ;
This was announced last night by Google CEO Eric Schmidt at a Commonwealth club meeting. Here are more details.
Our proposal - “Clean Energy 2030” - provides a potential path to weaning the U.S. off of coal and oil for electricity generation by 2030 (with some remaining use of natural gas as well as nuclear), and cutting oil use for cars by 38%.
The financial bottom line: Although the cost of the Clean Energy 2030 proposal is significant (about $4.4 trillion in undiscounted 2008 dollars), savings are even greater ($5.4 trillion), returning a net savings of $1.0 trillion over the 22-year life of the plan.
Going renewable will save money over time. That’s one of the crucial points, and something Schmidt emphasized at his talk. Yes, this will help stop global warming, but it also is a good financial investment. And that’s how it needs to be approached when trying to get businesses onboard with the plan.
From the Google Foundation blog
To get there we need immediate action on three fronts:
(1) Reduce demand by doing more with less
(2) Develop renewable energy that is cheaper than coal
(3) Electrify transportation and re-invent our electric grid
Bob Morris @ Oct 2nd 2008 05:30 - Category: Climate change, Energy conservation, Renewable energy Tags: Eric Schmidt;
Eric Schmidt, Google CEO, spoke at a Commonwealth Club meeting last night in S.F.
“We have seen a total and complete failure of leadership in the political parties of the United States. We’ve been working on a plan to help solve this problem,” he said.
Schmidt was inspirational, practical too. Based on what they’ve done at Google, he says renewable energy is not only the best way to combat global warming, it is also cost-effective. They installed solar in the parking lots at their headquarters for $5 million and it paid for itself in 2 1/2 years. They get 20% of their power from that solar now. Other large companies watched that happen and are doing the same. That’s real leadership.
Some points he made.
- Plugin hybrids are next. Once everyone cuts back on the amount of oil being used, guess what, the price of oil drops, resulting in even more savings.
- The US needs a massive stimulus package. He says, put most of that into rebuilding the national electric grid and renewable energy and huge numbers of new jobs, with resulting tax revenue, will be created. Many of them will be in rural areas where they really need jobs too.
- Solar and wind power is cheaper than nuclear. He ran the numbers and can prove it.
- Geothermal can be installed anywhere and the current research is to make it scale to huge commercial levels.
- Conservation is the best way to save energy.
- Solar thermal projects are being installed big time in California and the West now. They’ll be powering “a couple of San Franciscos ” in a few years, with lots more coming after that.
- The electric grid needs a huge upgrade. Make it “smart, big, and in the right places.”
- A 100 mile by 100 mile area with solar and wind power in the southwest could produce enough electricity to power the nation.
- Again, the grid needs to be smart. So does does the plugin hybrid. Then it can take more power in when consumption and rates are low. It could even feed into the grid if there’s a shortage. The technology to do this exists now.
- Smart grids can tell people about their usage. “Give information to people and they’ll make smart decisions.”
The current Congress and Administration have been perhaps the most inept in history. It’s good to see a company like Google playing a major role in getting the country to move to cleantech.
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