A Video You Must See August 15, 2008March 11, 2017 But first . . . ARE WE NEAR A BOTTOM? LEFRAK ON REAL ESTATE A friend listened to one of New York’s top real estate moguls, Richard Lefrak, a couple of months ago, and took notes: Lefrak said that the current crisis is likely to take about another THREE years (give or take one or two) for a few very simple reasons: First – We have the highest inventory of unsold homes/condos/apartments nationwide in 20 years. Second – We know that home inventories will RISE for at least another year, due to a huge coming wave of foreclosures. Third – Banks and mortgage companies do not have cash or credit available to lend to potential buyers. This won’t turn around until the real estate market itself turns around – so we have a catch-22. Fourth – The high price of oil and food (which is largely being caused by growth in emerging markets: China, Russia, India, Middle East, South America) is putting even more pressure on over-indebted consumers in the US. Even if oil demand falls in the US, demand from overseas will suck it up. A 30% decline in oil (to $100 a barrel) will not solve the problem. It will still be too high to offer any significant help to the consumer. Fifth – The US government will need to keep US interest rates low to try to help the consumer and real estate markets. Low interest rates will keep the US Dollar under pressure. Even if the dollar doesn’t fall much further, it certainly won’t be rising much anytime soon – and this will cause even higher consumer prices since we import almost all our consumer goods. As for why NYC hasn’t yet been affected, but eventually will be (in a very big way): For 30 years, the NYC real estate market has been largely driven by Wall Street profits. Until the beginning of this year, most Wall Street firms were actually MAKING money on the real estate and credit crisis, but that ended early this year. Mortgage and credit trading was the major source of income for Wall Street for the last 10 years – and that has now dried up. This doesn’t spell the end of Wall Street. Eventually, something will come along to replace real estate – but that won’t happen overnight. Nobody knows how low prices will fall in any given market, but the crisis on Wall Street is the worst in 20 years – so it’s hard to imagine that this will only have a minor or temporary impact on NY real estate. NY metro saw the biggest price rise in a generation over the past 5 years. A 10-15% decline does not correct a 300% price rise. Never has, never will. The US real estate bubble took 10 years to build. Something that takes 10 years to build cannot be wiped clean in 6 months or a year. After the Gold bubble burst in 1980, it took 4 years for gold to hit bottom. After the S&L crisis of 1988, it took 5 years for banking to hit bottom. After the NASDAQ bubble burst in 2000, it took 3 years for the NASDAQ to hit bottom. People are generally optimistic when it comes to economic issues because MOST of the time the economy is growing. But when a crisis does occur, it lasts a lot longer and goes a lot deeper than most people expect. During the good times, we tend to forget how bad things occasionally get. And financial advisors (and real estate brokers) are paid to give people good news, not bad news. Eventually, everything will work out fine. Real estate prices will rise again and Wall Street and the stock market will boom, but that’s years away. ☞ It should be noted that Congress in 1994 gave the Fed the authority to regulate the ‘non-bank’ mortgage originators, but – in classic no-regulation-is-ever-good Republican fashion – Chairman Greenspan chose not to use it. What possible harm could come from a real estate bubble fueled by the granting of massive credit to unqualified borrowers? (Greenspan is the author of the book that Senator McCain has promised to read to bone up on economics.) Using the Fed’s regulatory authority would have required cracking down on, among other things, ‘liars’ loans‘ – where borrowers were not required to document their creditworthiness – and this would have significantly moderated the real estate bubble. While it may be several years too late (horses, barn doors), Chairman Bernanke is planning to use this authority. It should also be noted that, within the bounds of what’s possible, Congress and Treasury Secretary Paulson did a good job with the recently enacted housing bill. The overarching idea was to make it harder for people to get mortgages who can’t afford to pay them back – but easier for people to get them who can. One especially noteworthy provision: a $7,500 no-interest 15-year loan (in the form of a refundable tax credit) that Congressman Barney Frank insisted be included to help first-time home buyers get a foothold on homeownership. Another: a substantial increase in the ceiling on mortgages the FHA will insure, to over $600,000. For more about these and other homeowner benefits of the bill, click here. For the macro view, here. (And what of the charge it’s all a bail out for the shareholders of Fannie Mae and Freddie Mac? When a former Treasury Secretary ribbed one of the principle authors of the bill with that charge, the author shot back: ‘Are you buying shares?’ To which the answer, perhaps instructive to us peons as well, was, ‘Umm, well, no.’) MARY MATALIN PUBLISHES GARBAGE I was on her radio show for an hour once and enjoyed it. But she long since began to grate – and now her imprint at Simon & Schuster has published this. It debuts the day after tomorrow at the top of the New York Times best-seller list: . . . In its timing, authorship and style of reporting, the book is strikingly reminiscent of the one [the same author] wrote with John O’Neill about Mr. Kerry, ‘Unfit for Command,’ which included various accusations that were ultimately undermined by news reports pointing out the contradictions. (Some critics of Mr. Kerry quoted in the book had earlier praised his bravery in incidents they were now asserting he had fabricated; one had earned a medal for bravery in a gun battle he accused Mr. Kerry of concocting.) . . . ☞ So having done it to Vice President Gore and Senator Kerry, they now rev up the character assassination of Barack Obama. (Two websites to bookmark: fightthesmears.com and lowroadexpress.com.) Speaking of which . . . A VIDEO YOU MUST SEE How Fox misleads its viewers about Obama – take 4 minutes to watch. 14 14 14 14 14 14 14 14 14
Hiding in His Office to Avoid a Vote August 14, 2008March 11, 2017 COSTA RICA So we have this little guest book, and here‘s Tuesday’s entry: Hands-down this is our best vacation ever! We had ten incredible days at Villa Exotica. We got to snorkel, zip line, horseback ride and go white water rafting. The best part of it was that every night we could relax in 5-star luxury in this beautiful villa. We have traveled all over the world as a family and hands-down this is our best vacation ever! The website made the place look nice but the reality is even better. It is like staying in the Four Seasons or the Ritz. I’ll miss waking up and drinking my coffee and seeing the beautiful landscape, watching the sunset over the ocean or relaxing in the hot tub. We’ll be back! / Finkel and Crew (Bethesda, MD USA) OVOID MONOLITHICITY Ken Doran: ‘That’s it! The name for my new punk-techno-rock band that I have been searching for. We will thank you at the Grammies. But I have already trademarked it, so don’t use it again.’ ☞ The album cover. McCAIN DISAPPOINTS At least if the talk were really straight, the action really brave, I could admire the man while disagreeing with him and voting the other way. But give me a break. The Paris Hilton stuff is beneath him; the energy hypocrisy is far worse, as explained by Tom Friedman, here: . . . Both the wind and solar industries depend on [tax] credits – which expire in December – to scale their businesses and become competitive with coal, oil and natural gas. Unlike offshore drilling, these credits could have an immediate impact on America’s energy profile. Senator McCain did not show up for the crucial vote on July 30, and the renewable energy bill was defeated for the eighth time. In fact, John McCain has a perfect record on this renewable energy legislation. He has missed all eight votes over the last year – which effectively counts as a no vote each time. Once, he was even in the Senate and wouldn’t leave his office to vote. ‘McCain did not show up on any votes,’ said Scott Sklar, president of The Stella Group, which tracks clean-technology legislation. Despite that, McCain’s campaign commercial running during the Olympics shows a bunch of spinning wind turbines – the very wind turbines that he would not cast a vote to subsidize, even though he supports big subsidies for nuclear power. . . .
7.5% August 13, 2008January 4, 2017 CPNO – A 7.5% YIELD George A.: ‘As hesitant as I am to correct you (and I could be mistaken), but it appears that CPNO is paying out more than it’s making. According to Yahoo Finance, it’s earning less than its dividend.’ ☞ Good point. But there’s ‘earnings’ and there’s ‘cash flow.’ Earnings are reduced by bookkeeping entries like depreciation and amortization that require no cash. So one thing to note, as per the company’s recent press release: ‘Second quarter 2008 distributable cash flow represents 160% coverage of the second quarter 2008 distribution of $0.56 per unit.’ (Here is the company’s description of its distribution policy.) You may rightly say, ‘Well, if it doesn’t set aside cash to cover depreciation, what will the company do when the pipeline needs to be replaced?’ I think the answer is that if you maintain a pipeline properly, it should last a long, long time. In fact, most pipeline stocks work this way (PAA earned $1.82 and pays out $3.55; TPP earned $1.86 and pays out $2.84) . . . as do most REITs (real estate investment trusts). I suggested BFS eight years ago at $16 when it was paying a 9.6% annual distribution ($1.56 a share) – which was more than its reported earnings. Today, at $46 or so, I don’t own it anymore, but I note that the distribution has risen to $1.88 (which works out, on a $46 share price, to a fairly modest 4% return), even as earnings were only $1.62. None of this guarantees success for CPNO, of course. But so long as you avoid ovoid monolithicity, I think it’s a reasonable investment. WINNING Joel Grow: ‘Stevenson, when told he’d given a speech that would ‘win him the vote of every thinking man in America,’ replied ‘not good enough.’ And he was right. Americans vote, even when it’s against their own best interest, for ‘regular guy’ types, or at least those who ACT like regular guys. That’s not the smallest of many reasons Biden would be a fine VP choice for Obama.’ John Kasley: ‘Obama allows reporters to recite whole GOP claims and then refutes them, which is overly gracious – and gives full voice to the false claim yet one more time to a million viewers. Obama should interrupt reporters with a raised hand – like a stop sign – and start talking before the reporter completes that little recitative to make his (Obama’s) own statement. (Up there on Obama’s high road, there’s no shortage of things to say.) In a courtroom one would object and then quickly think of some reason for the objection as you rise to your feet. The point is the interruption of the opponent’s rhythm and speech before the message makes its impact on the jury. The objection gets the attention of the jury and the original message is diluted even if the objection is overruled. If a persistent reporter wants to hammer home a point, it’s fair to say, ‘We really covered this pretty thoroughly last Tuesday, I believe. If not, contact my staff for clarification.’ . . . or . . . ‘What part of what I said last Tuesday seems unclear to you?’ It also lets a reporter know that this is not all about the reporter as media star.’ ☞ John goes on to suggest that Obama might mention a few hundred times that most corporations pay no income tax – (‘Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress . . .‘) – even as Senator McCain is proposing to lower it for them.
Fight Fiercely, Harvard! August 12, 2008March 11, 2017 DO OUR KIDS HAVE IT AS GOOD AS WE DID? Stephen Tumbas: ‘How does our daughter’s job offer of $33K per year compare to our first salary in 1972 of $10K?’ ☞ Poor kid. To match your 1972 $10,000, adjusted for inflation, she needs to be getting $52K. Use this handy tool to see for yourself. Then again, she gets 152 cable channels and has GPS and a camera built into her iPhone. It’s hard to measure true equivalence. AN INCOME STOCK I bought some CPNO at $30.45 yesterday. I like the 7.5% yield. WHY LIBERALS LOSE Here’s a theory for why Southern Democrats do better winning the presidency than the Stevensons, Mondales, and Dukakises (Dukaki?), Gores and Kerrys. (Hint: they fight back.) (Note: the writer has Vice President Gore having gone to Yale. Actually, it was Harvard.)
Why? August 11, 2008March 11, 2017 WHY THIS REPORTER WAS EJECTED Tallahassee Democrat senior writer Stephen Price on Friday was singled out and asked to leave a media area at the Panama City rally of presidential candidate Sen. John McCain. Price was among at least three other reporters, and the only black reporter, surrounding McCain’s campaign bus – Gov. Charlie Crist and his fiancee, Carole Rome, were already aboard – when a member of the Arizona senator’s security detail asked the reporter to identify himself. Price had shown his media credentials to enter the area. Price showed his employee identification as well as his credentials for the Friday event. “I explained I was with the state press, but the Secret Service man said that didn’t matter and that I would have to go,” Price said. When another reporter asked why Price was being removed, she too was led out of the area. Other state reporters remained. . . . ☞ The McCain campaign explained it was just a coincidence that the one reporter targeted for ejection was also the one reporter who was black. As it happens, this incident took place just hours after McCain campaign manager Rick Davis said on the Today Show, ‘John McCain has fought his entire life for equal rights for everyone’ (not including people like me and Charles, whose equal rights, as noted Friday, he fights to suppress). WHY EVEN A McCAIN BACKER THINKS McCAIN’S ALL WET ON TAXES Because – advocating a third term for Bush’s tax policy – he is all wet on taxes (wetter still in proposing to cut the gasoline tax); but it’s rare to find a McCain backer who will make the case publicly, as Ben Stein does for the New York Times here: . . . Mr. McCain wants to extend many of President Bush’s income tax cuts and to reduce taxes on corporations. But the facts of life are that we have a large budget deficit . . . [and] every category of federal spending is likely to grow. . . . The question is simply this: Do we want to step up to the plate like responsible people – I hate to say this, but the last responsible people who actually did this were named Bill and Bob (Clinton and Rubin) – and shoulder our responsibilities? Or do we just kick the can down the road a bit and leave the mess for our children and their children? And if we do raise taxes, should people who are barely getting by pay them or should people who are getting by very nicely pay them? I don’t like taxing rich people or anyone I like. But our government – run by the people we elected – needs the revenue. Do we pay it or do we make our children pay it? Dwight D. Eisenhower – and Bill Clinton – knew the answer: You behave responsibly and balance the budget except in rare circumstances. Somehow, Republicans (and I am a Republican) have forgotten this basic lesson of adulthood. . . . SO TELL ME AGAIN WHY YOU’RE A REPUBLICAN? I agree with a lot of what Ben Stein writes and admire the way he writes it. (And who didn’t love Ferris Bueller? Anyone? Anyone?) So, as I argue in the Harvard Business School Alumni Bulletin, people like Ben Stein may only think they’re Republicans. They are welcome on our side any time. (One place I disagree with Stein: you don’t need to balance the budget, you just need to have our National Debt grow slower, in most years, than the economy as a whole. The borrow-and-spend Republicans seem not to get this. When Reagan/Bush took over, the Debt was a manageable 30% of our GDP. When this Bush leaves office, it will be a scary 75% – and headed higher. They have taken us trillions into hock . . . not to make investments that cry out to be made (like repairing our bridges or encouraging alternative energy research) but, rather, to give the rich a massive tax cut and to invade Iraq. There was no crying need to give the rich a tax cut. There was no crying need to invade Iraq. But we borrowed trillions to do both anyway.) WHY ALL THE McCAIN BASHING? Jason T.: ‘Please stop the political onslaught. I’m losing enthusiasm for someone who beats me over the head constantly with their politics.’ ☞ I’m sick of it, too. But with only 13% of the country thinking we’re on the right track, it seems to me it’s worth our doing all we can to get back on the RIGHT track. After 5 billion years of evolution, this miracle we call humankind faces its make-or-break century. I think we owe it to the thousands of generations preceding us, who had it far less easy . . . and to the generations we hope will follow and thrive . . . to be informed and make good choices. Citizenship is hard work. I know this sounds corny or sanctimonious or melodramatic or preachy or just way too serious. But too much is at stake not to participate. Tomorrow: Why We Might Lose Anyway
The Dog Ate My Prestidigitation August 8, 2008January 4, 2017 SILT ACCUMULATES GLDD’s backlog is up 50% versus a year ago. You can dredge up all the mostly encouraging news here. (Don’t sell your GLDD.) McCAIN DISCRIMINATES McCain campaign manager Rick Davis said on the Today Show last Friday that ‘John McCain has fought his entire life for equal rights for everyone.’ Well, maybe not quite everyone. He . . . fights to prevent gays and lesbians from serving in the military fights to prevent existing hate crimes legislation from being extended to cover gays and lesbians fights to prevent employment and housing nondiscrimination laws from covering gays and lesbians fights to deny gay and lesbian couples equal Social Security benefits and estate tax treatment fights to write discrimination into the Arizona Constitution The late Barry Goldwater – a true Arizona conservative – long ago said of the military issue: “You don’t have to be straight to be in the military; you just have to be able to shoot straight.” WEALTH PRESTIDIGITATES I had planned to share the secret of wealth as today’s third item, but one thing led to another and now it’s time for Jon Stewart and the Fake News. Have a good weekend!
Oy. August 7, 2008January 4, 2017 James Ooi: ‘I was actually considering voting for your man, Obama, because he had the guts to take the anti-populist stance of being against the gas tax holiday. Too bad he’s now caved in by supporting the release of oil from the Strategic Petroleum Reserve. Anyone who is truly committed to steering the country toward alternative energy must realize the best (maybe the only) way to get us there is through sustained high energy prices (Thomas Friedman made this point in an NYT column a while ago, and I agree).’ ☞ I don’t think we have to worry too much about a return of cheap gas. And on the Strategic Petroleum Reserve issue, I’m actually a bit of an agnostic. It wouldn’t kill me to see the government sell some oil futures at $145 a barrel and cover their short at $90. (That’s probably a smarter way to do it than literally pumping out the oil, but it’s harder to explain in a sound-byte.) Leaning against the speculators this way could cut by many tens of billions a year our impoverishment . . . we hemorrhage a little less massively at $90 than at $145 . . . and might even earn the Treasury a profit. That’s quite different, it seems to me, from McCain’s initiative simply to buy votes by cutting the gasoline tax – at the expense of our already gargantuan deficit. There is simply no legitimate economic rationale for doing that. Indeed, as James and I and Thomas Friedman argue, it would be counterproductive. Whatever one thinks about the possibility of leaning against the oil speculators as described above, my main point would be to thank James for raising this concern, while hoping that no one specific item like this will actually determine his – or anyone’s – vote in November. Each candidate is flawed (aren’t we all?), as he tries to find the best set of compromises to steer us through the years ahead. I would argue that McCain’s flaws dwarf Obama’s, and that Obama’s compromises will be significantly more thoughtful, better-advised, and better reasoned than McCain’s. Do you want a president whose first instinct is to turn to Phil Gramm for economic advice, or to Warren Buffett? I hear from folks angry that Hillary’s name will not be entered into nomination for a vote in Denver – even though it was Hillary who chose to suspend her campaign and throw her weight behind Obama. (‘I will work my heart out to make sure that Senator Obama is our next President and I hope and pray that all of you will join me in that effort,’ she said.) They are so mad they say they will vote for McCain. I feel their pain, because I think Hillary is sensational (as is Barack) and would have made a terrific president (as will Barack, if we win) – but to me, that’s no reason to give up on all the things Hillary and Barack both stand for by voting for McCain (or staying home). I hear from folks who say they will vote for McCain if the Democratic Convention starts with a prayer. They treasure the separation of church and state (as do I), and they’ve HAD it with the Democrats because of this. Never mind that the House and Senate begin their sessions every morning, day after day, year after year, with a prayer. Or that Presidential Inaugurations always start with a prayer. Or that, of course, the Republican Convention will also start with a prayer. All that, they’ve found a way to live with. But if we start with a prayer, forget war and peace, tax policy, lobbyist-written corporate regulation, gay rights, women’s rights, the minimum wage, health care, college loans – they’re voting for McCain. Of course, at the end of the day, I’m hoping they’re really not. They are totally entitled to their anger and frustration; but at the end of the day I hope they’ll vote our way . . . not least because the Supreme Court Justices Obama appoints are likely to place a higher priority on the separation of church and state than McCain appointees would. McCain has promised emphatically that he will appoint justices who are ‘clones’ – his word – of the Bush appointees. If ‘clone’ means what I think it does, perhaps the ‘McSame’ moniker has some validity? At least on economic policy (make the tax cuts for the rich permanent! cut taxes on corporations!) . . . and on social policy (repeal Roe v. Wade! don’t let gays in the military!) . . . and on the Judiciary (‘I’ve said a thousand times on this campaign trail that I want to find clones of Alito and Roberts’) . . . voting for McCain is voting for something very like a third Bush term. Why would any Hillary supporter want that? PTARMIGAN Jonathan Young: ‘Eggplant ptarmigan? Sounds delicious if a bit gamy. But what about (another of your ongoing theses) the transportation cost of the ptarmigan from Iceland?’ ☞ You guys just won’t let up. It was Spell Check that did this, I tell ya, fellas – Spell Check! [Blam! Blam! Blam! They shoot him anyway. Music comes up. Roll credits.]
That $490 Billion Budget Deficit August 6, 2008January 4, 2017 $490 BILLION? Last week it was announced that the Bush Administration would lave us with a $490 billion deficit for the fiscal year beginning two months from now, October 1. But this number doesn’t include the $200 billion we’ll be filching from the Social Security Trust Fund – so it’s $690 billion. And it probably overstates the tax revenue we’ll collect – and understates the cost of the safety net benefits and various bail-outs we’ll incur – as the economy worsens. So George W. Bush, who promised a balanced budget (as John McCain does now) will leave the next President with a government running three-quarters of a trillion dollars in the red. Maybe more. Not to harp (oh, go ahead: harp), but more than three years ago here I offered this: Note that our accumulated National Debt since 1776 will have reached $10 trillion or so by the time President Bush leaves office – up from under one trillion when Ronald Reagan took office. Of the $10 trillion, $8 trillion or so will have been racked up under just three presidents: Ronald Reagan, George Bush, and George Bush. (Of course, with inflation, it’s natural that 21st Century deficits would dwarf 19th Century deficits. What really matters is the size of the Debt in proportion to the size of the economy – and which way that ratio is headed. The debt was about 30% of GDP when Reagan took office, will be about 75% when Bush leaves – and is headed in the wrong direction.) Meanwhile, the ratios of consumer debt are higher also. Our homes ‘appreciate’ (even though they grow no bigger) and we borrow and spend that newfound ‘wealth.’ It may all work out fine. It generally does. But not always. [So? So? So, as expensive as they are, I’m not selling my TIPS or my oil stocks or my PCL, all of which might be good hedges against inflation.] ☞ And guess where the National Debt is now: $9.6 trillion, right on target to hit $10 trillion, give or take a few billion, on January 20th, 2009. Just the interest on that mostly-Republican debt is equivalent to 40% of all the personal income taxes we pay, leaving that much less room to pay for anything else. PICKENS So he would make money – I hope – generating electricity from wind. That part I like. Full speed ahead. He would enhance the value of his water holdings by using the rights-of-way under the needed wind-farm-to-cities transmission lines to bury water pipelines. That part I’m not sure is so bad – Dallas will certainly need water, and the cheaper it is to get it there, I should think, the better. But according to this in the LA Times, the third piece of his grand plan – to use natural gas instead of gasoline to power cars – works for him because he owns a natural gas fueling station company. And that company is the sole funder of a California proposition to pump billions of dollars into subsidizing the switch to natural-gas powered vehicles. Which, the article goes on to explain, may not be such a good idea. The last public persuasion effort Pickens funded – the Swiftboating of John Kerry – did not serve the country well, either. Up with the windmills, down with Prop 10?
A Peck of Pickens Peppers And Pickens' Dickens of a Plan? August 5, 2008March 11, 2017 Yesterday, the peppers got bumped by hugely good news for humans. (Seriously: a game-changer, in case you missed it.) And that was after bumping them Friday for this fundamentally important story: how the TV news folks are failing our democracy. (I urge you to take a look and share it widely.) Today, the peppers will not be bumped! PEPPERS I asked why red and yellow peppers cost so much more than green ones. Are they higher up in the pepper trees and thus harder to pick? Is it expensive to dye them? Anne Vivino-Hintze: ‘Pepper trees????? All peppers start out green. After they reach full size, some varieties turn red, some varieties turn yellow, some turn orange. As their color develops, so does their sweetness. In my home garden I grow a variety called a chocolate pepper that starts green but at maturity turns brown on the outside with red flesh on the inside. Very good, but doesn’t taste like chocolate. So the red and yellow and orange peppers have to make it to full green size unscathed and then remain on the low bush while their bright color and sweet flavor develops. All the while avoiding damage from slugs and farm equipment and large human feet.’ Jeff Groff: ‘They take longer to ripen. They’re not dyed. They actually turn red or yellow. They sit in the field or greenhouse longer than green peppers. That’s why they cost more.’ Mike Rutkaus: ‘I think the red and yellow peppers are more nutritious. They have more of the colorful anthrocyanins in them that preserve your eyesight, etc. Like blueberries and strawberries and red wine. So they are more valuable, people know this at some level, and suppliers can charge more for them.’ Peter K: ‘It costs more for ripe peppers, as it does for vine-ripened tomatoes or Spatlese wine, which is why I always skip the green peppers at the salad bar. From Wikipedia article Bell pepper: ‘Green peppers are unripe bell peppers, while the others are all ripe, with the color variation based on cultivar selection. Because they are unripe, green peppers are less sweet and slightly more bitter than yellow, orange, purple or red peppers.’ ‘ Michael Joy: ‘I imagine that green peppers are cheaper because the growers have a longer time to get them to market before they go bad. Also, since ANY bell pepper that is not ripe can be a green pepper, there are more sources of green peppers. Meanwhile once ripe (in either yellow or red), the growers have a shorter time to get them to the consumer. And only a yellow pepper will be yellow, so there aren’t as many of them.’ PTARMIGAN My brother: ‘You write, ‘Have you not heard of eggplant ptarmigan?’ No. And it’s probably more expensive than chicken.’ Ed: ‘‘Eggplant ptarmigan’??? As an avid birdwatcher, I urge you not to encourage people to eat ptarmigan.’ ☞ Oops. It seems I left out the second ‘i’ in parmigian, and Spell Check took a wild guess. PICKENS Peter Kaczowka: ‘There are some good ideas in Pickens’ plan, but using natural gas for transportation is not one of them. Internal combustion engines are badly inefficient, compared to electric engines and generating electricity, not to mention being dirty and noisy. Pickens seems to believe that it will take 30 years before electric cars are practical, but somehow we can switch our cars to natural gas quickly. The US would need a network of natural gas filling stations, while we already have electric ‘filling stations’ everywhere. A better use for natural gas would be to replace oil for use in home heating and electric power generation. Together heat and power generation account for nearly 20% of the oil we use. Stop using oil for that, get some SUVs off the road, and we can hit his 38% reduction in oil use. Many folks here in the Northeast would appreciate moving from oil heat to natural gas.’ James Ooi: ‘US GDP is $13 trillion, so importing $700 billion of oil represents less than 6% of our national income, so ‘going broke fast’ seems exaggerated, akin to saying I’m going broke fast because I earn $100K and spend $6K on heating and gasoline and will have spent $60K in 10 years. Our wealth as a nation depends far more on using the lowest cost source of energy (subject to environmental concerns, and here, wind power shines) than it does trying to source our energy from within the country. T. Boone Pickens surely knows this, so I wonder about his motives.’ ☞ Hmmm. There are 300 million of us in the U.S., so spending $700 billion a year comes to $2,333 a year for each of us; about $10,000 for a family of four (plus a dog). I have nothing against the Canadians, Venezuelans, or Middle Easterners from whom we get most of our oil. After all, they can use that $700 billion to buy our products (or, say, 100 million acres of prime American farmland each year . . . or all the stock of Apple and IBM and Yahoo! and Amazon and Boeing and the entire US airline and auto industry each year). But speaking selfishly, I guess I’d rather we sent that money to ourselves, to build clean, renewable energy sources. But James is not the only one who wonders about Pickens’s motives. David Bruce kindly sent me this link, suggesting that gaining a water monopoly, and a right of way to pipe his water to thirsty cities, may be a quiet part of his plan. Tomorrow: That $490 Billion Budget Deficit Is Actually $700 Billion or More
Hugely Good News for Humans August 4, 2008January 4, 2017 Peppers and ptarmigan, as promised. But first, some really, really, hugely good news. (I keep telling you, it’s just a matter of getting from ‘here’ to ‘there’ . . . and this may be one of the most direct paths.) ‘Major Discovery’ Primed To Unleash Solar Revolution: Scientists Mimic Essence Of Plants’ Energy Storage System ScienceDaily (Aug. 1, 2008) – In a revolutionary leap that could transform solar power from a marginal, boutique alternative into a mainstream energy source, MIT researchers have overcome a major barrier to large-scale solar power: storing energy for use when the sun doesn’t shine. Until now, solar power has been a daytime-only energy source, because storing extra solar energy for later use is prohibitively expensive and grossly inefficient. With today’s announcement, MIT researchers have hit upon a simple, inexpensive, highly efficient process for storing solar energy. Requiring nothing but abundant, non-toxic natural materials, this discovery could unlock the most potent, carbon-free energy source of all: the sun. “This is the nirvana of what we’ve been talking about for years,” said MIT’s Daniel Nocera, the Henry Dreyfus Professor of Energy at MIT and senior author of a paper describing the work in the July 31 issue of Science. “Solar power has always been a limited, far-off solution. Now we can seriously think about solar power as unlimited and soon.” Inspired by the photosynthesis performed by plants, Nocera and Matthew Kanan, a postdoctoral fellow in Nocera’s lab, have developed an unprecedented process that will allow the sun’s energy to be used to split water into hydrogen and oxygen gases. Later, the oxygen and hydrogen may be recombined inside a fuel cell, creating carbon-free electricity to power your house or your electric car, day or night. The key component in Nocera and Kanan’s new process is a new catalyst that produces oxygen gas from water; another catalyst produces valuable hydrogen gas. The new catalyst consists of cobalt metal, phosphate and an electrode, placed in water. When electricity – whether from a photovoltaic cell, a wind turbine or any other source – runs through the electrode, the cobalt and phosphate form a thin film on the electrode, and oxygen gas is produced. Combined with another catalyst, such as platinum, that can produce hydrogen gas from water, the system can duplicate the water splitting reaction that occurs during photosynthesis. The new catalyst works at room temperature, in neutral pH water, and it’s easy to set up, Nocera said. “That’s why I know this is going to work. It’s so easy to implement,” he said. Giant leap for clean energy Sunlight has the greatest potential of any power source to solve the world’s energy problems, said Nocera. In one hour, enough sunlight strikes the Earth to provide the entire planet’s energy needs for one year. James Barber, a leader in the study of photosynthesis who was not involved in this research, called the discovery by Nocera and Kanan a “giant leap” toward generating clean, carbon-free energy on a massive scale. “This is a major discovery with enormous implications for the future prosperity of humankind,” said Barber, the Ernst Chain Professor of Biochemistry at Imperial College London. “The importance of their discovery cannot be overstated since it opens up the door for developing new technologies for energy production thus reducing our dependence for fossil fuels and addressing the global climate change problem.” Just the beginning Currently available electrolyzers, which split water with electricity and are often used industrially, are not suited for artificial photosynthesis because they are very expensive and require a highly basic (non-benign) environment that has little to do with the conditions under which photosynthesis operates. More engineering work needs to be done to integrate the new scientific discovery into existing photovoltaic systems, but Nocera said he is confident that such systems will become a reality. “This is just the beginning,” said Nocera, principal investigator for the Solar Revolution Project funded by the Chesonis Family Foundation and co-Director of the Eni-MIT Solar Frontiers Center. “The scientific community is really going to run with this.” Nocera hopes that within 10 years, homeowners will be able to power their homes in daylight through photovoltaic cells, while using excess solar energy to produce hydrogen and oxygen to power their own household fuel cell. Electricity-by-wire from a central source could be a thing of the past. B This project was funded by the National Science Foundation and by the Chesonis Family Foundation, which gave MIT $10 million this spring to launch the Solar Revolution Project, with a goal to make the large scale deployment of solar energy within 10 years. Adapted from materials provided by Massachusetts Institute of Technology, via EurekAlert!, a service of AAAS ☞ Good news for these cobalt-producing countries, perhaps. (From this same page you can see which countries produce just about anything: pig iron, lithium, salt – you name it.) But hugely good news for humans. Imagine a world of abundant clean energy. As Ray Kurzweil has so importantly argued, the dazzling technological progress we’ve experienced these past 50 years is likely to be dwarfed by what’s to come in the next 50 – by a factor of 32 times. Oh, boy, oh, boy, oh, boy, oh, boy. Tuesday (which you can read today): A Peck of Pickens Peppers