Wednesday, January 14, 2009

SAR #9014

We are the last of the affluent, innocent no more.

Defined: Reorganization, verb., the act of selling off profitable parts of a company in order to focus on keeping access to government handouts. See also "Citibank".

Cliff Notes: Bernanke gave a long, important speech at the London School of Economics in which her reviewed the steps he had taken to date, their effect and the possible steps to be taken in the future. Summary: Nothing is working so we're going to try some other stuff.

Without a Net: Top ten housebuilder Beazer Homes reports a net 53% decline in last quarter's house sales and a 56% decrease in orders for new houses.

Rush To Judgment Disbursement: The second-half TARP release seems to be needed in a Very Big Hurry. After all Bush is out and Obama in just a week from now. What could happen, other than the collapse of Citi, between now and then that would require that much money? Oh. Right.

Morning After Pill: Ben's in the backseat, whispering in the economy's ear, "Don't worry, I know how to stop inflation if it gets started."

One Forward, Two Back: Obama's plan may find some $20 billion in 'shovel-ready' projects, but that doesn't replace the over $60 billion decline in non-residential construction, much less all the folks who aren't building houses anymore. How about slum-prevention by hiring ex-financial advisors to take sledgehammers to empty malls and such?

Now and Then: With easy money to be made just by storing oil for a couple of months, why aren't the oil producers storing the oil right where it is, in the ground? Best answer is that they are all desperate for cash, some cash, any cash. Think about that, then imagine a world where the major oil producing countries collapse.

Dropouts Wanted: Some of those who transferred balances to Chase for a low rate on the transfers are being hit with a $10 a month fee just for having a the card. The minimum payment has also been doubled. Apparently Chase does not want cardholders who can actually read or do simple math.

Porn O'Graphs: Paul Kedrosky's current collection, "Strong slowdown in _____ "

Deja Vu All Over Again: Sleazy sub-prime lenders are taking advantage of the government-backed home loan market to ply their predatory trade once more, and the government is unable to prevent this. Talk about recycling.

Nuked: New nuclear plants will carry a cost of 25 to 30 cents per kilowatt-hour - three times the current rate and higher than either solar or wind generated power. The industry will seek governmental support for this vital companion to ethanol.

Tell Me True: Of all the reasons not to release the second $350 billion the best is that they don't know what they did with the first $350,000,000,000.00 of my money.

The Good Old Daze: Bernanke now says the discarded original purpose of TARP - to buy bad assets from the banks at inflated prices - is a Good Idea that should be followed through on even though Paulson gave away disbursed $350 billion following some other theory that hasn't worked. Banks still suspect each other of lying because they know they are.

Debatable: The question is, "Does Capitalism Need Adjustment?" You have 30 seconds to come up for a defense of the negative, starting now. Time's up.

Porn O'Graph: US Non-Farm payrolls - a drought.


Anonymous said...

they don't know what they did with the first $350,000,000.00 of my money.

Three zeros short, but who's counting.

Anonymous said...

> Investors have some 50 million barrels of oil sitting around in supertankers, waiting for March to show up so they can deliver it at a significant profit.
> That assumes the price of oil in March will be over $46 a barrel

Why do you assume that they aren't locking in delivery prices through futures? Isn't that the whole point of the article - that they can do that because of the shape of the curve?

Charles Kingsley Michaelson, III said...

a#1 - right. even 350 million is big money at my house, but I've made the corredtion

a#2 - right - but now that the 2x4 applied to my skull has woken me up, I've removed the item and people will now wonder about you instead of me. (I misunderstood the oil market, imagine.)

Anonymous said...

The report on costs of nuclear power looks somewhat exaggerated: the author calculates a capital cost of 22c / kWh based on construction cost of $10k / kW and cost of capital at 15% per annum over the 40-year lifetime of a nuclear power station. With current Japanese designs (built from scratch in 4-5 years), the capital cost is more like $2k /kW. For a government-backed infrastructure project, cost of capital would be more like 6% per annum. So this looks like a tenfold overestimate.

Charles Kingsley Michaelson, III said...

isentrope - Why should we assume the government is going to pay to build the nuke plants - why shouldn't the investors pay the going rate? Because it is not competitive without subsidies? I think that was the point...
I also think the nukes should be required - up-front - to provide (private, commercial) funding, in the form of a permanent escrow under government control, to pay for the disposition of their waste (for eternity) and for eventual decommissioning and safe burial of the plant, which is not included in the data.


Anonymous said...

All that the government has to do is to guarantee that price signals will be strong enough to prevent CO2 emission from power stations. This level playing field would make investment in new nuclear capacity practically risk-free, as neither clean coal nor renewables have much chance of competing with nuclear as a source of CO2-free electricity on a a terawatt scale.

Anonymous said...

You wouldn't say we shouldn't invest in cars because people die when they go through the windshield--being beheaded by windshield glass hasn't been an issue for several decades. I'm saying don't write off nuclear power based on an outdated understanding of the technology. New reactors are using very different kinds of fuel, such that you have far, far less radioactive waste, and that are cooled through passive means, so that you don't have the potential for huge explosions.

Anonymous said...

What's with anyone, least of all Bernanke, thinking that the economy needs to grow? When the lumberjack has yelled "Timberrrrr!" and the mighty oak is toppling over at 9.8 m/sec/sec, there may in fact be growth going on, but it don't mean jack. THe problem isn't to grow, the problem is to keep from vanishing!

Charles Kingsley Michaelson, III said...

Windshields have nothing to do with why we shouldn't be investing in cars. I'm not afraid of the damned nukes exploding, I just want them to pay (or provide funds now to pay later) all of their associated costs over the next 25,000 years or so.
- - -
I'm gonna lift that last sentence from immediately above and promote it to tomorrow's intro. Hat tip to anonymous.