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  • #46
    Re: Inflating the next bubble

    Originally posted by Lukester View Post
    Rajiv - I can vividly understand your difficulties as to some extent we share them down here in San Diego. My situation is not entirely the same because we are a 100% privately owned corporation funded entirely by our EU sales (and in better years our US ones too, for the fledgeling US subsidiary!). Therefore you have my full understanding. It is entirely possible that in your individual company's case there has been some notable bad faith at the financing end, which incidentally is where most of the potential for bad faith most often is manifest. Your point is well taken here.
    can't help thinking... aren't the congress critters blocking the solar legislation trying to squeeze more blood from the solar industry before letting the bill pass? more pain is more gain. the deal isn't done until oct/nov as an amendment to some other pending bill. by the the solar guys are bleeding out their ears and giving away the farm, but the deal will be done.

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    • #47
      Re: Inflating the next bubble

      This was in ventures past -- lessons learnt and experiences not repeated.

      However, the current funding environment is actually the worst I have seen in 20 years -- probably a bit worse than 2001-2003. Everybody is trying to find a safe haven and hence are not putting money into anything other than sure things.

      Also the personnel turnover in the FIRE economy is quite astounding.
      Last edited by Rajiv; 08-24-08, 10:47 PM.

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      • #48
        Re: Inflating the next bubble

        Originally posted by jk View Post
        i agree with santafe2 that fred's remark was condescending, and inappropriate for a moderator.

        i find santafe2's contributions here substantial and always worth reading.

        there is an occasional touchiness on the part of the leader/owner-ship of this site - an unwillingness to brook criticism or correction, and a grasping for credit for ideas - that is unbecoming and, even more important, detrimental to the site's mission and the general culture of the site. most of the time, the site embodies an openness to discussion and ideas that i very much appreciate. but occasionally fred gets snappish.

        on the substantive issue, if the investment credit for solar wasn't in the bill, that's an important fact to point out. if solar companies are hung out to dry because of uncertainty, that's an important fact to point out. if we can usefully distinguish between pay option and subprime and alt-a, between cdo's and cdo-squared, we should be capable of discussing a variety of solar-supporting legislative possibilities, whether the right or wrong ones are being passed, and whether the alternative energy industry will be stillborn in the u.s. and developed instead in asia and europe.
        As the individuals on this Forum show their "different sides", it makes me wonder to what degree certain personality quirks influence their economic analysis. I don't care whether people are acting according to my idea of what is "right", but I do care if their judgment is impaired, which could affect my investment success.
        Just one more thing to factor in when developing one's investment strategy . . . . :rolleyes:

        (Even thought I am replying to your post, jk, this is not directed at you.)
        raja
        Boycott Big Banks • Vote Out Incumbents

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        • #49
          Re: Inflating the next bubble

          Originally posted by raja View Post
          As the individuals on this Forum show their "different sides", it makes me wonder to what degree certain personality quirks influence their economic analysis. I don't care whether people are acting according to my idea of what is "right", but I do care if their judgment is impaired, which could affect my investment success.
          Just one more thing to factor in when developing one's investment strategy . . . . :rolleyes:

          (Even thought I am replying to your post, jk, this is not directed at you.)
          EJ writes in:
          The favorite guru of one of our members in the UK doesn't have a forum. Ever wonder why?

          How about the guy in Connecticut with the great extended track record for gold? No forum there, either.

          The reason is that there is that management at those sites thinks: I am the guru and you are audience receiving the guru's great wisdom. Who wants to hear from the peanut gallery?

          That is how they think.

          I think that everyone has wisdom, but not my wisdom.

          Then there are finance and economic blogs designed to sell a fund: the guru lectures, the readers "comment," and the caravan moves on.

          Then there are the brand name financial outlets, like FT and the WSJ. Again, it's the guru vs the unwashed masses again, except with a major brand behind it. What's their track record? you be the judge.

          iTulip is unique because not only is its management top notch but it's members are taken seriously.

          With that comes far higher standard of discourse than elsewhere.

          Some readers might think, EJ can't be all that important. After all, he talks the me.

          That is not how I think. Perhaps I am idealistic. We shall see.

          All seriously developed, relevant criticisms are not only welcomed here but encouraged. Is the theory of the tech bubble wrong? Stuck to our guns in 1999 but the criticism was valuable. Our theory of gold and reflation from 2001? Still holding, in spite of five bouts of doubt per year since then from readers. Our theory of the housing bubble from 2002? Many critics, but again events worked out in our favor.

          How about today? Is the Dollar Ratchet theory wrong? Is Ka-Poom Theory kaput? We all learn from tests of these theses. But they have to be serious.





          Last edited by FRED; 08-24-08, 11:53 PM.
          Ed.

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          • #50
            Re: Inflating the next bubble

            Originally posted by FRED View Post
            EJ writes in:
            The favorite guru of one of our members in the UK doesn't have a forum. Ever wonder why?

            How about the guy in Connecticut with the great extended track record for gold? No forum there, either.

            The reason is that there is that management at those sites thinks: I am the guru and you are audience receiving the guru's great wisdom. Who wants to hear from the peanut gallery?

            That is how they think.

            I think that everyone has wisdom, but not my wisdom.

            Then there are finance and economic blogs designed to sell a fund: the guru lectures, the readers "comment," and the caravan moves on.

            Then there are the brand name financial outlets, like FT and the WSJ. Again, it's the guru vs the unwashed masses again, except with a major brand behind it. What's their track record? you be the judge.

            iTulip is unique because not only is its management top notch but it's members are taken seriously.

            With that comes far higher standard of discourse than elsewhere.

            Some readers might think, EJ can't be all that important. After all, he talks the me.

            That is not how I think. Perhaps I am idealistic. We shall see.

            All seriously developed, relevant criticisms are not only welcomed here but encouraged. Is the theory of the tech bubble wrong? Stuck to our guns in 1999 but the criticism was valuable. Our theory of gold and reflation from 2001? Still holding, in spite of five bouts of doubt per year since then from readers. Our theory of the housing bubble from 2002? Many critics, but again events worked out in our favor.

            How about today? Is the Dollar Ratchet theory wrong? Is Ka-Poom Theory kaput? We all learn from tests of these theses. But they have to be serious.


            From what I can perceive at the moment Ka-Poom may be closer to reality than at any time since I found iTulip back in Q1/06.
            Jim 69 y/o

            "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

            Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

            Good judgement comes from experience; experience comes from bad judgement. Unknown.

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            • #51
              Re: Inflating the next bubble

              LOL, can I borrow that term?

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              • #52
                Re: Inflating the next bubble

                Originally posted by Rantly McTirade View Post
                Occupational hazard of Hessianing.
                What are Hessians?

                During the American Revolutionary War, Landgrave Frederick II of Hesse-Kassel (a principality in northern Hesse) and other German leaders hired out thousands of conscripted subjects as auxiliaries to Great Britain to fight against the American revolutionaries. About 30,000 of these soldiers were sold into service, and they came to be called Hessians, because 16,992 of the total 30,067 men came from Hesse-Kassel. Some were direct subjects of King George III; he ruled them as the Elector of Hanover. Other soldiers were sent by Count William of Hesse-Hanau; Duke Charles I of Brunswick-Lüneburg; Prince Frederick of Waldeck; Margrave Karl Alexander of Ansbach-Bayreuth; and Prince Frederick Augustus of Anhalt-Zerbst.

                The troops were not mercenaries in the modern sense of professionals who hire out their own services for money. As in most armies of the eighteenth century, the men were mainly conscripts, debtors, or the victims of impressment; some were also petty criminals. Pay was low; some soldiers apparently received nothing but their daily food. The officer corps usually consisted of career officers who had served in earlier European wars. The revenues realized from their service went back to the German royalty. Nevertheless, some Hessian units were respected for their discipline and excellent military skills.

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                • #53
                  Re: Inflating the next bubble

                  Here in the UK we call it bickering, as when the weather is bad and we cannot get out into fresh air to blow off the dust, so to speak. The whole idea of debate is to draw the very best out of the OTHER party. Once you start to bicker, it is best to move on to another debate at another time. Me, having just helped a good friend win, (as his crew), a minor gliding championship, I will wait for the next major post to circumvent the cloud of your dusty and may I say, temporary, misassociations. ;)

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                  • #54
                    Re: Inflating the next bubble

                    Originally posted by LargoWinch View Post
                    Jeff; are "stimulus package" not a form of electronic bread line?
                    electronic bread line, Brilliant! I couldn't have said it better.

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                    • #55
                      Re: Inflating the next bubble. Re. FIG's

                      http://www.bloomberg.com/apps/news?p...Rhk&refer=home

                      9/3/08

                      Five Places to Look for Next Investment Bubble: Matthew Lynn

                      Commentary by Matthew Lynn


                      Sept. 3 (Bloomberg) -- Dot-coms? Done that. Property? Oil? Corn? Been there, got the T-shirt and nursed the losses, as well.

                      One thing we know for sure about today's global economy is that there is always an investment bubble somewhere. If you get in early enough, you can make a fortune riding the boom.

                      So with property prices collapsing faster than a tent on a stormy day and with the oil-and-commodity bandwagon gone, where should investors be looking for the next big thing? There are five areas worth thinking about: Old Europe, automobiles, stockbroking, the dollar, and private islands.

                      Anyone looking at the financial markets over the last 20 years would have noticed one common thread: Something is always the flavor of the month. Investors spot a trend, and everyone piles in until valuations become overextended and the whole thing collapses in a heap of bankruptcies and lawsuits.

                      At the turn of the decade, we saw the bubble in dot-com shares. More recently, we have witnessed the same in real estate -- fueled by the availability of subprime mortgages -- as well as in oil, food and commodities.

                      We have seen buying frenzies in the much-hyped BRIC economies -- Brazil, Russia, India and China. And there have been bubbles in financial instruments, such as collateralized debt obligations, that helped trigger the subprime meltdown. Along the way, we have some minor bubbles in the things purchased by the people who made money out of the other bubbles. Look at how the price of art or English Premier League soccer teams has soared.

                      Basic Truth

                      Of course, bubbles are never entirely ludicrous. The boom always has some basis in reality. The Internet was an important new technology, and a few companies would make a lot of money from it over time. The dot-com boom took that basic truth, and blew it out of proportion.

                      Likewise, adding China and India to the developed world is going to mean commodities get more expensive. And yet the natural-resources boom took that upward-sloping graph and assumed it carried straight on into the sky.

                      So where are the next bubbles? You need to find something where there are solid reasons for expecting good growth, but which can also be puffed up into a mega-trend once some smart investment bankers get to work on it.

                      Here are some places to start looking, bearing in mind that bubbles come in five basic types: places, industries, financing, currencies and luxuries.

                      FIGs Beat BRICs

                      First, the place: Old Europe. Forget about the BRICs. The next decade will belong to the FIGs -- France, Italy and Germany. We have written them off for so long that we're in danger of forgetting that all three have been among the richest societies in the world for more than 1,000 years.
                      As the Chinese and Indian middle classes expand, they will spend money on the kind of upmarket, design-led, history-rich products the FIGs are so good at making. After the credit crunch, their mix of stable, export-led, self-financing growth will look more attractive than the debt-fueled U.K. and U.S. models.

                      Next, the industry: automobiles. It has been almost a century since we last witnessed a gold rush in cars, suggesting it's high time for a replay. After oil prices reached records, some of the world's smartest people began looking more seriously at creating cheap and non-polluting electric cars. If they crack it, a few hundred million vehicles will be replaced within a few years. Think about the fortune the music industry made when we replaced our vinyl records with compact discs and then multiply it by 10,000 or more. It sure sounds like a boom.

                      Stockbroker Boom

                      How about the financial bubble? That will be stockbroking. It's so long since it was in fashion, there aren't even many left in business. Most are just divisions of investment banks. And yet, there are now thousands of companies with shattered balance sheets from the credit crunch. They need advisers who have strong relationships with investors and can raise money for their clients by selling shares.

                      That's what stockbrokers used to do. If you are smart, quietly shut down that hedge fund, and become a stockbroker. In a few years, UBS AG will pay a fortune to buy you out.

                      The currency bubble will involve the dollar. The markets have kicked it around for a long time, and yet by next year it may well be the U.S. that has the world's strongest economy. The weak dollar will spark an export boom. Pretty soon we'll be describing the U.S. as the new Germany -- an export-led, manufacturing economy, held back only by the reluctance of its consumers to spend money.

                      And how will the mega-rich, who make their money from those bubbles, put their new wealth on display? Forget about a Matisse to hang on the wall. That is too vulgar. As for soccer teams, that is just another bubble waiting to pop. The new FIG- automobile-stockbroker billionaires will value privacy and discretion above all else.

                      There is no better way of doing that than by buying part of a country. Grab yourself a windswept, Scottish island now, ignore the gales howling in from the North Sea, and you'll be able to sell it for a fortune in a few years' time. Just remember to get out before all the bubbles burst.
                      (Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.)
                      Jim 69 y/o

                      "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

                      Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

                      Good judgement comes from experience; experience comes from bad judgement. Unknown.

                      Comment


                      • #56
                        Re: Inflating the next bubble

                        Originally posted by FRED View Post
                        The bill, rushed through congress and signed by the president with alacrity not justified by the gradual pace of economic decline is really about reassuring foreign central banks that hold nearly $US1 trillion of US agency debt [that] the US government intends to guarantee the GSE's credit, and even stock if necessary, to avoid foreign official sales of agency securities that will cause a spike in mortgage rates at this precarious time for the US housing market.
                        I think the remarks of China's He Fan, an economist with the Chinese Academy of Social Sciences, might be of interest after the bailout of the Fannie and Freddie.


                        The U.S. Treasury's takeover of Fannie Mae and Freddie Mac is good news in the short term for China, the biggest holder of the giant mortgage lenders' debt, but Beijing's huge U.S. exposure still poses a serious risk, a prominent government researcher said on Monday. China owned $376 billion of debt issued by U.S. government agencies, principally Fannie and Freddie, as of mid-2007.

                        The seizure of the two firms, prompted by worries over their shrinking capital, was the latest in a series of emergency steps taken by U.S. authorities to quell a year-long credit crisis that has helped push many economies toward recession.

                        "China has bought a lot of asset-backed securities, and there might be short-term improvement in price," said He Fan, an economist with the Chinese Academy of Social Sciences.

                        But, taking a longer view, he said the bailout posed a problem: if the Treasury issues new debt to fund the rescue, should China be a buyer or not?

                        "For China, whether or not you buy the new treasuries, there will be losses: if you buy them, you're getting deeper in the hole; if you don't buy, your existing holdings will lose value," He said...


                        Although the takeover of the mortgage lenders was a reminder of the investment risks China is taking, He said the country had little room to diversify its $1.8 trillion in currency reserves.

                        Buying non-government dollar bonds would be even riskier, while the euro is expensive and yields in Japan are low.

                        "If we don't buy U.S. treasuries and ABS, what else we can buy?" He said. "China just has no way to avoid the risks. Whatever we do, we have to bear the losses."

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                        • #57
                          Re: Inflating the next bubble

                          Army and NRC Sign Interagency Agreement

                          Assistant Secretary of the Army (Civil Works) John P. Woodley, Jr., and Nuclear Regulatory Commission (NRC) Executive Director for Operations Bill Borchardt have signed a revised interagency agreement to improve the effectiveness and efficiency of the regulatory processes related to the development of new nuclear power plants and the expansion of existing plants. The two agencies agree to coordinate early in a project's life to ensure that the purpose and need, the suite of alternatives, and evaluation presented in the environmental documentation are suitable for carrying out their respective regulatory responsibilities.

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                          • #58
                            Re: Inflating the next bubble

                            Originally posted by babbittd View Post
                            Army and NRC Sign Interagency Agreement

                            Assistant Secretary of the Army (Civil Works) John P. Woodley, Jr., and Nuclear Regulatory Commission (NRC) Executive Director for Operations Bill Borchardt have signed a revised interagency agreement to improve the effectiveness and efficiency of the regulatory processes related to the development of new nuclear power plants and the expansion of existing plants. The two agencies agree to coordinate early in a project's life to ensure that the purpose and need, the suite of alternatives, and evaluation presented in the environmental documentation are suitable for carrying out their respective regulatory responsibilities.

                            It is interesting to see the differences between our two nations with regard to arguably the most important element, energy, within a long term successful national strategy; here in the UK we just sold out our overall policy, generating capacity, sites for new nuclear power stations and of course, the engineering to the French. Nothing against the French, but would the US ever contemplate such stupidity?

                            http://business.timesonline.co.uk/to...MC-Bltn=LQZDL9

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