1992-2002: the socialist decade?
Since when did the tax rates of the late 1990s (for the wealthiest 1% of taxpayers) become equivalent to socialism?
This
interview is surreal.
So cutting middle class taxes by 2-5%, while raising taxes on the wealthiest 1%, back to the level of the late 1990s (such austerity!) is somehow Marxist? Huh?
Sigh! I suppose there is a reason the blog-o-sphere calls the extreme right "wingnuts".
Nobody likes paying taxes--I know I don't...
Who (Cindy McCain excepted) really thinks that McCain's plan to cut capital gains taxes and give corporations a $300 billion tax cut is what we need to do right now to fix our economy? (who even has capital gains these days? short-sellers maybe?)
Irrational Dread? or Consternation?
Everything to do with global markets looks awful right now.
We are stuck in a negative feedback loop, everything that happens leads to more selling (or so it seems). Housing declines lead to bank loses which lead to bank layoffs which leads to recession fears which leads to tighter credit which leads to corporate lay-offs which leads to deeper recession fears which leads to commodity market sell-offs which leads to continuing mayhem apparently.
Substantial companies (many in the DJIA) are selling for mid-single digit trailing P/Es. Yet someone (lots of 'em) keeps selling!
Fundamentals no longer matter...fear seems to rule, which means people have to basically close their eyes and step in, or remain on the sidelines.
A part of the problem appears to be the "flaw" in the ideology of the free market capitalists. Facing such flaws doesn't inspire confidence...
At some point the upside in stocks will outweigh the downside. But is that point 10% lower? 20% lower? or where?
Sadly my crystal ball turned dark a few weeks back.
Bush's legacy of multi-lateralism
Sorry, I was just listening to
George Soros on "The Journal" and it reminded me of a
post of mine from mid-March 2008 entitled "Wall Street's Katrina Moment".
You know what? I was right on the money...and six+ months ahead of the administration. Who would have guessed that the Bush administration's Katrina response was really quite swift?
Why does it take the biggest financial cock-up in 75 years for Bush to finally become
a full bore multilateralist?
"It doesn't matter if you're a rich country or a poor country, a developed country or a developing country — we're all in this together," Bush said. "We take this seriously, and we want to work with you."
So back in the day when we were the Superpower "you are either with us or against us". And a mere 6-7 years later with credit so F***ed up, that banks won't even lend to each other, we (of the free-est markets ideology) are nationalizing entire industries!, and the SHIT won't stop hitting the fan, now "we're all in this together" and "we want to work with you".
OMG F***ing brilliant.
The rising tide lifts all yachts, but the bunged-up sewer system overflows into everyones house!
Latest panel data
I had a chance to test out my 1/2 size demonstration panel today--it now has a cover and sides.
On a 25C ambient sunny October afternoon, I measured a temperature of 70C inside my panel versus 50C on the standard panel.
The good news is that my panel generated 26.3W versus 20.5W on the standard panel. 28.3% more power...And my panel had an extra 3/8 inch polycarb sheet over the cells absorbing sun that the standard panel did not.
The power breakdown: my panel 5.46A, 4.82V; standard 4.11A, 4.99V.
When I first put my panel in the sun I measured 5.13V, but as my panel heated up the voltage dropped a little over 6% to 4.82V.
After the deluge...what?
I'm growing very concerned about the damage this "silly" credit crisis may be doing to our real economy, especially the renewable sector. Global markets are in sustained free fall.
There is no person/company/country or combination (of appropriate stature/independence/distance from the financial mess) that is coming forward and saying that this selling panic is insane.
Is every company on this planet really worth 20-30% less than it was 130 hours ago?
(Which makes me wonder if I really should be panicking.)
There is a growing wishlist of solutions, but each solution once implemented has resolved nothing...with pundits almost universally declaring that it is too little, or is too late, or is not addressing the real problem.
Each day that the markets fall 4-8% means that any rebound (assuming it does eventually come) will only fix the damage from that day or two's fall.
Meanwhile, if noone will lend, noone can borrow, and eventually business grinds to a halt. GM drops 30% in one day and nobody says "boo". Actually I assume the market already knows that all the US car companies (and the airlines) are in major trouble, but nobody unrelated to GM--in fact I'm not even sure GM stepped up to say "this is nuts".
Without lending do we even have an economy? How long until lending resumes? Who will be able to borrow?
Tell me when its safe to panic
Dow dropped ~400 pts in the last hour of trading, down 7%+ on the day.
Asian markets opened down 8%-10%.
This is getting serious!
Everyone says this is not the time to panic, and I'm not the panic-ing type...but yeeooow!
This is really ugly.
Solar bargain
I just have to point out that MEMC Electronics(WFR) is trading at an absurdly low price. At ~$23/share it trades at a P/E of ~8. It also has $6/sh in cash and virtually zero debt. So the real P/E is closer to 6.
The knocks are well know...the economy is in the dumps which means earnings probably won't reach the $4.87/share that is estimated for next year. WFR makes high grade silicon for semiconductor chips and solar cells.
The company has benefited from a massive run-up in silicon prices as silicon was in short supply for 3-4 years. Silicon nearly tripled in price in that time frame, due to the hugh growth in solar panels in Germany and Spain. More supply is coming on line next year which should bring supply/demand back into balance. Most silicon is sold on a multi-year contract basis, so earnings may not grow as fast as recent years, but they are not going to fall off a cliff. But the stock is trading as if the solar industry is in terminal decline, as opposed to growing 40%ish per year.
New Solar Tax Credit changes the game
The newly enacted Federal Solar Tax Credit makes a real difference.
In a state like
California which has lots of sun, high electric rates, and provides its own solar incentives the elimination of the cap will really boost solar installations.
Assuming an $8/W installed price for solar panels, a 3.5kW installation of solar panels (enough to supply nearly 600 kwh/mth) would cost $28,000 total. But after state rebates (worth $1.90/W) and the solar tax credit (worth ~$1.83/W) the homeowner would pay just under $15,000 (~$4.27/W) for a system that generates $1,000/yr worth of electricity ($0.14/kwh rate).
The yield from this solar investment is 6.6% tax free. An equivalent taxable investment would have to yield ~9.5% (assuming a 30% tax rate).
Oh yeah, don't forget the solar investment is 1) risk free, & 2) understated because the year-by-year return (i.e. yield) will rise as energy prices go up in the future.
There are now eleven states that have residential electricity rates greater than or equal to $0.14/kwh; the US residential average is now about $0.115 kwh according to the
DOE. If you look at the bottom you can see that in Hawaii the residential price is $0.31 kwh (!!). I almost can't believe this.
Hawaii gets
as much sun as CA, let's assume 2,000 hrs/yr and state incentives (
dsire shows that the state offers a 35% tax credit up to $5K), a $10/W installed price fora 3.5kw solar system (price is assumed to be $2 higher than CA due to less competition) leads to a sticker price of $35,000. After the federal tax credit ($2.8/W), and the $5k max state rebate (~$0.7/W) leads to a homeowner cost of just under $23,000* ($6.5/W) for a system that generates $2,200 worth of electricity each year (the value is higher b/c electricity costs more).
A solar system in Hawaii yields ~9.6% tax free each year (a.k.a. 10.5 yr simple payback). The equivalent before tax yield would have to be 13.7% (again risk free).
SOLAR POWER IS FULLY ECONOMIC IN HAWAII.
I predict that homeowners, companies and utilities begin installing solar hand over fist on the islands come 2009!
*I assumed the state rebate must be subtracted before applying the federal tax credit. The effect of this assumption is to undercount the federal tax credit amount (i.e. the tax credit would be bigger) if one can apply the federal tax credit first.
With Solar Incentives On Top!
So the $700 billion Wall Street Bailout passed... A steaming pile of crap that will enrich to greedy bankers that got us into deep doo-doo.
At least we got some
solar goodies bundled into it:
1) 8 year extension to the 30% solar tax credit that was set to expire this year
2) I'm told the $2,000 cap goes away for homeowners (I couldn't find that part myself)
3) alternative minimum tax payer can now get the credit
4) utilities can now get the solar tax credit too
Any one of these points would have provided a solid boost to solar, all four will super-charge the solar industry in the US. We will be the number 2 market by MW installed next year (Germany will be number one with ~2.5GW).
Eight year extension means we will get a lot of foreign companies investing in our solar markets.
Nixing the cap is a BIG DEAL. It means the average home install will double or triple in size.
Assuming an $8/watt installed price, the STC reduces the homeowner's out of pocket cost to $5.6/W. This is worth $2.40/watt or ~1/2 the retail cost of the solar panels.
