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  • #16
    Re: Inflating the next bubble

    In regards to future energy policy I recommend a recent event by CSIS.
    Tax credits and government loan guarantees will help promote capital investments.

    http://www.csis.org/component/option...,view/id,1750/



    July 31, 2008

    9:00 am - 12:00 pm

    CSIS B1 Conference Center
    1800 K Street, NW
    Washington, DC 20006
    Associated Programs:

    Energy and National Security

    Related Research Focus:

    Energy

    Description:

    This session is part of an ongoing series of conferences that examine the role of nuclear energy as an option to meet urgent climate and energy needs. In this program, several panels of experts offered analyses of the economics of nuclear power as well as discussed issues with financing a fleet of new reactors. A final panel commented on the potential to scale some of the inputs necessary to support an expansion of nuclear power: human capital and the nuclear supply chain.
    Agenda, Audio, and Presentations




    AUDIO (mp3, 01:05:44)

    9:00 am – 9:05 am: Welcome and Introduction
    • Frank Verrastro, CSIS
    9:05 am – 10:05 am: Assessing the Economics of Nuclear Power
    • Moderator: William Magwood, IV,Secure Energy North America Corporation
    • Richard Myers, Nuclear Energy Institute-Presentation (pdf)
    • Justin Falk, Congressional Budget Office-Presentation (pdf)
    • Dr. Joe Turnage, Constellation Generation Group-Presentation (pdf)
    AUDIO (mp3, 00:37:04) 10:05 am –10:55 am: Financing Issues with a New Nuclear Fleet
    • Moderator: Robert Ebel, CSIS
    • John Gilbertson, Goldman Sachs-Presentation (pdf)
    • John Matthews, Morgan, Lewis & Bockius LLP-Presentation (pdf)
    AUDIO (mp3, 01:11:59)
    10:55 am –11:55 pm: Scaling-up Human Capital and the Supply Chain
    • Moderator: Carol Berrigan, Nuclear Energy Institute
    • Craig Hansen, Babcock and Wilcox
    • Yoshitaka Sato, Japan Steel-Presentation (pdf)
    • Dr. Sekazi Mtingwa, MIT-Presentation (pdf)

    Comment


    • #17
      Re: Inflating the next bubble

      Originally posted by phirang View Post
      If McCain wins, let's just say there'll be a buying opportunity for solar equities.:eek:
      I don't think this issue is about the election. Either candidate will likely support a renewable energy tax credit going forward. McCain will extract more for the oil and gas industry in trade than will Obama. If the renewable energy tax credit extensions are not passed in September they will not likely be passed until Q2 2009. The US Solar industry will have been eviscerated by that time.

      Comment


      • #18
        Re: Inflating the next bubble

        Originally posted by santafe2 View Post
        I don't think this issue is about the election. Either candidate will likely support a renewable energy tax credit going forward. McCain will extract more for the oil and gas industry in trade than will Obama. If the renewable energy tax credit extensions are not passed in September they will not likely be passed until Q2 2009. The US Solar industry will have been eviscerated by that time.
        I have personally kept away from solar equities until this is settled: the agency MBS bailouts may (further) bankrupt the US till even the ITC is compromised for a few quarters.

        Comment


        • #19
          Re: Inflating the next bubble

          Originally posted by FRED View Post
          Regret that the amendment that effects you personally was not included among the hundred or so that support EJ's point: next bubble tax amendments were a major feature of this last bubble bill, and contrary to your assertion, it did pass.
          Fred - When you reach for the patronizing broad brush it doesn't suit you or the site well.

          I understand you have a lot to cover here but I did not say the Housing and Economic Recovery Act legislation didn't pass. I said it didn't pass with the renewable/alternative energy component as EJ contended in his article. I didn't critique EJs article, only that piece of research. With regard to the article, I agree with it.

          But, in his article, EJ sited a specific portion of legislation; Title X: "Clean Energy Tax Stimulus Act of 2008'', and then went on to comment that "the bill", referring to the Housing and Economic Recovery Act of 2008", contained an alternative energy component when that part of the bill did not pass. That was my only point.

          Comment


          • #20
            Re: Inflating the next bubble

            Originally posted by FRED View Post

            "Next Bubble'' development proceeds according to the inexorable logic of the US political economy. Two examples make the point.

            The seeds of US government sponsorship of an alternative energy boom were planted in legislation intended to rescue the US economy from the damage done by the collapsing housing bubble. Emergency legislation titled "Housing and Economic Recovery Act of 2008'' passed recently. It provides loans to new home buyers, and has controversial provisions that allow the US Treasury to directly purchase the bonds and stock of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac a policy not allowed under the US Constitution.
            Doesn't the question of the Next Bubble and how it will unfold have to be considered in light of other threats to the global economy . . . ?

            For example, I have read that the $480 trillion derivatives market is a "ticking timebomb" that could destabilize the global economy should there be a meltdown. And what if the FTD issue blows up, paralyzing markets? :eek:
            raja
            Boycott Big Banks • Vote Out Incumbents

            Comment


            • #21
              Re: Inflating the next bubble

              Originally posted by ej
              remove government subsidies of FIRE industries
              there are a lot of high priced lobbyists and - even more important - big money political donors on the other side of this issue. i think that any realistic [meaning actually likely to happen] solution will not only NOT remove fire industry subsidies, it will include a cut for the financial types, perhaps in the form of ppp's with bonds to float and revenue streams to securitize.

              Comment


              • #22
                Re: Inflating the next bubble

                Originally posted by FRED View Post
                Keep an eye out for new securities from Wall St firms and watch for sovereign wealth funds as the primary foreign buyers.
                Is there an easy way of keeping track of this? What news sources are interesting besides iTulip?

                Comment


                • #23
                  Re: Inflating the next bubble

                  Originally posted by santafe2 View Post
                  Fred - When you reach for the patronizing broad brush it doesn't suit you or the site well.

                  I understand you have a lot to cover here but I did not say the Housing and Economic Recovery Act legislation didn't pass. I said it didn't pass with the renewable/alternative energy component as EJ contended in his article. I didn't critique EJs article, only that piece of research. With regard to the article, I agree with it.

                  But, in his article, EJ sited a specific portion of legislation; Title X: "Clean Energy Tax Stimulus Act of 2008'', and then went on to comment that "the bill", referring to the Housing and Economic Recovery Act of 2008", contained an alternative energy component when that part of the bill did not pass. That was my only point.
                  i counted a few grammar errors, maybe one or two factual errors, out of 93 facts, several dozen unique insights, and a revelation or two. all in all, a decent article.

                  nit·pick Audio Help /ˈnɪtˌpɪk/ Pronunciation Key - Show Spelled Pronunciation[nit-pik] Pronunciation Key - Show IPA Pronunciation –verb (used without object)
                  1.to be excessively concerned with or critical of inconsequential details.
                  –verb (used with object)
                  2.to criticize by focusing on inconsequential details.
                  –noun
                  3.a carping, petty criticism.
                  –adjective
                  4.of, pertaining to, or characteristic of a nitpicker or nitpicking.

                  Comment


                  • #24
                    Re: Inflating the next bubble

                    "Evidence of economic contraction in the US is obscured by rising inflation. Real GDP growth reversed in the fourth quarter of 2007 as nominal GDP growth declined 0.2% and consumer price inflation (CPI) increased to 3.6%, not including energy and food prices. The source of the inflation is the outsized impact of rising energy import prices of food and other goods and services that are sensitive to rising energy input costs.Can wage rate inflation be far behind? The Federal Reserve does not believe so and behaves as if it believes that, even while holding short-term rates below the inflation rate, maintaining negative real interest rates, rising unemployment will take care of the inflation problem by lowering demand."

                    Don't rising energy input prices squeeze margins for practically all industry? Don't recessionary forces generally suppress wages? I'm trying to understand the reference to the wage rate inflation that appears contradictory to all the points mentioned in this paragraph? Am I not looking far enough down the chessboard or what?

                    Comment


                    • #25
                      Re: Inflating the next bubble

                      Originally posted by skidder View Post
                      "Evidence of economic contraction in the US is obscured by rising inflation. Real GDP growth reversed in the fourth quarter of 2007 as nominal GDP growth declined 0.2% and consumer price inflation (CPI) increased to 3.6%, not including energy and food prices. The source of the inflation is the outsized impact of rising energy import prices of food and other goods and services that are sensitive to rising energy input costs.Can wage rate inflation be far behind? The Federal Reserve does not believe so and behaves as if it believes that, even while holding short-term rates below the inflation rate, maintaining negative real interest rates, rising unemployment will take care of the inflation problem by lowering demand."

                      Don't rising energy input prices squeeze margins for practically all industry? Don't recessionary forces generally suppress wages? I'm trying to understand the reference to the wage rate inflation that appears contradictory to all the points mentioned in this paragraph? Am I not looking far enough down the chessboard or what?
                      My econ friend at MIT says bernanke looks at high oil as a production-shock, not inherently inflationary.

                      Comment


                      • #26
                        Re: Inflating the next bubble

                        Originally posted by skidder View Post
                        "Evidence of economic contraction in the US is obscured by rising inflation. Real GDP growth reversed in the fourth quarter of 2007 as nominal GDP growth declined 0.2% and consumer price inflation (CPI) increased to 3.6%, not including energy and food prices. The source of the inflation is the outsized impact of rising energy import prices of food and other goods and services that are sensitive to rising energy input costs.Can wage rate inflation be far behind? The Federal Reserve does not believe so and behaves as if it believes that, even while holding short-term rates below the inflation rate, maintaining negative real interest rates, rising unemployment will take care of the inflation problem by lowering demand."

                        Don't rising energy input prices squeeze margins for practically all industry? Don't recessionary forces generally suppress wages? I'm trying to understand the reference to the wage rate inflation that appears contradictory to all the points mentioned in this paragraph? Am I not looking far enough down the chessboard or what?
                        Your question is answered here on the Ask EJ forum.
                        Ed.

                        Comment


                        • #27
                          Re: Inflating the next bubble

                          Fred, Thanks for pointing me to EJ's response! Regards.

                          Comment


                          • #28
                            Re: Inflating the next bubble

                            Do we have to keep having these mega-bubbles??? I think your analysis is very sharp Eric, but I think it almost comes off as advocating bubbles. The very essence of a bubble is that an anomalously large portion of the activity is pure economic waste. We shouldn't be neglectful of this fact.

                            To illustrate by analog, the late 90s were of course great for the launching of the internet as a major vehicle of commerce and much more -- but most regular folks still got wiped out on connected investments. I wouldn't wish a repeat upon the public, alternative energy or otherwise.

                            I would also dispute the assumtion that governments *have* to be extremely prone to intervention. It didn't used to be this way. My personal opinion is that we should seek to dismantle FIRE chiefly by returning to sound money. This takes the government and money center banking out of the nexus of the large scale wealth flows of the country. But they aren't needed (indeed, their net benefit is negative); let the market itself channel investment to areas that need it, without coercing it from the populace as some sort of tithe.

                            These problems with infrastructure and energy dependence have natural solutions that can be provided by the market, in response to price signals. Same as always.

                            However as long as we stick to fundamentally unsound money, I agree, everyone will of necessity look to the government to determine where the mass benefit/largesse should flow. I think that is a shame.

                            I realize the foregoing prescription is not a popular opinion these days, generally dismissed out of hand, but I can't see why we keep coming back to this severely dysfunctional FIRE/fiat system for any reason other than a collective psychosis. The conventional wisdom is to speak of "growth", but as we've seen, much of that is fictitious, due to either to bubble froth, or inflation.

                            I'm also a more than a little skeptical on whether a sizeable bubble can even be mustered. The last two bubbles were nurtured inside a gargantuan dollar bubble that will only continue to deflate from here on out. So any alt. energy/infrastructure activities will have to go on at a much smaller scale. But by definition, then, they cannot "restore" our economy to recent prior levels.

                            Of course, you may be more cognizant of that than legislators ;)

                            Comment


                            • #29
                              Re: Inflating the next bubble

                              Originally posted by akrowne View Post
                              I think your analysis is very sharp Eric, but I think it almost comes off as advocating bubbles.
                              If you read the whole article you will see that I do not advocate bubbles, and the proposals I offer in my book will strike many readers as radically pro-market, such as reducing income taxes for entrepreneurs to zero. Peaking away the facade of neo-liberalism reveals some painful truths about our country that few want to look at. Speak to VCs who are trying to fund the development of new energy and transportation technologies to take us forward and make the US competitive, and they tell of unimaginable layers of regulation and bureaucracy designed to protect vested interests. Makes Italy and France appear dynamic by comparison.

                              Comment


                              • #30
                                Re: Inflating the next bubble

                                Originally posted by EJ View Post
                                Speak to VCs who are trying to fund the development of new energy and transportation technologies to take us forward and make the US competitive, and they tell of unimaginable layers of regulation and bureaucracy designed to protect vested interests. Makes Italy and France appear dynamic by comparison.
                                government makes a move to confront the energy crisis.
                                http://www.yomiuri.co.jp/dy/business...24TDY02309.htm
                                (Aug. 24, 2008)
                                Eco-tech wealth fund planned

                                The Yomiuri Shimbun
                                The government is planning to establish a sovereign wealth fund in fiscal 2009 that would place priority on innovative technologies using new energy sources and natural resources, government sources said Saturday.
                                Amid surging prices of crude oil and other resources, the fund--tentatively named Innovation Sozo Kiko--will invest mainly in solar power generation, wind power generation, fuel cells, and other new energy technologies and natural resources.
                                The government is aiming to prevent excessive outflows of national wealth to countries rich in natural resources, and to build a mid- and long-term base for future economic growth.
                                The government hopes these new policies will transform the economy into one that functions on drastically reduced resource consumption.
                                Initially, the government saw the fund as an entity to buy up dormant patents owned by companies and universities, aiming to use them to produce high-value-added goods across a wide range of industries.
                                But the government shifted to a policy that concentrates on certain specific purposes due to a recent surge in prices of various natural resources.
                                Among its practical investment targets, the government is considering a project to collect and pool technologies from major manufacturers, emerging companies, universities and other research institutes that can lead to the production of innovative fuel cell technologies.
                                In the solar power-generation field, the fund would help companies select and concentrate on promising business projects.
                                In the wind power-generation field, the fund would help develop a battery system that would continue suppling electricity when winds are weak.
                                The fund also would sell this system to other countries.
                                In addition, the fund would help secure supplies of industrial materials even when natural resources are very expensive by developing rare metal alternatives.
                                To ensure such investments form part of a national strategy, the majority of stocks comprising the fund would be government held.
                                The government would have the authority to appoint or dismiss members of the fund's management committee.
                                The committee would make decisions on issues such as selecting investment targets.
                                The fund would hold about 200 billion yen in total investment.
                                Of that amount, the government would contribute 50 billion yen.
                                The remaining funds would be collected from sovereign wealth funds in the Middle East and other countries, and from the private sector.

                                Comment

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