Earth, The Blue Marble, courtesy NASA
COP 21 is, perhaps, the most important international effort in history. It concluded with an agreement by 196 nations to limit CO2 emissions to hold global temperature rise to 1.5 degrees Centigrade or 3.3 degrees Fahrenheit (NPR).
The only way to do this is to phase out fossil fuels, quickly, and replace them with efficient use of sustainable energy systems, i.e., solar, wind, geothermal, hydro, and insulation.
When stocks on the Shanghai Securities Exchange, the SSE, “corrected” on August 24, 2015, stocks in US and other markets followed. But nothing has fundamentally changed. None of the “Fundamentals” on any publicly traded U.S. or European companies have significantly changed (other than the Market Capitalization and Price Earnings ratios, which are, of course, functions of the stock price). Earnings per Share, EPS, the existence or lack thereof of what Warren Buffett calls a “moat,” debt to asset ratios, return on income, other financial ratios, were and remain unaffected by day to day fluctuations of stock price.
Charging Bull, by Arturo Di Monica
Stocks that were fundamentally bad investments on Friday, August 21, 2015 were likely to have been bad investments on Tuesday. August 25, 2015. Stocks that were good investments on Friday, August 21, 2015, were fundamentally somewhat better investments on Tuesday. August 25, 2015.
Dancing on the Charging Bull
The SSE Composite is not the S&P 500, or even the Dow. While there are frequent scandals involving insider trading and other financial improprieties, they are the exception and there are regulations designed to keep them that way. China, on the other hand …
The Shanghai Stock Exchange Composite index, the SSE Composite, looks kind of like the S&P 500. However, there are key differences between the indices.
On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 Million in the Sustainable Energy space and $8.0 Million in the fossil fuel space. Excluding the value of dividends and transaction costs, but including the bankruptcy or crash of three companies in the sustainable energy space,
The conclusion, that investors are moving away from Fossil Fuels and into Sustainable Energy, seems logical, if not obvious.
On August 17, 2015, I attended the Board of Public Utilities, BPU, hearings regarding New Jersey’s Energy Master Plan, EMP.
The beach and cyclone at Seaside Heights, NJ, before and after Hurricane Sandy, Oct. 2014
A lot of people, myself included, spoke about Sandy. (Photos, click here).
Many spoke of the need for the BPU to act independently of the Governor and think long term.
No one spoke about a need or want for more fossil fuels or more nuclear.
The lobbyist from the NJ GCA, The Gasoline, C-Store, Automotive Association told the commissioners how happy he was that he installed a solar energy system on his home and said that gas stations need robust electricity. They can’t simply install emergency generators that burn diesel or gasoline.
Lillgrund, Sweden, courtesy Siemens
I called for: 140% clean, renewable, sustainable electricity by 2030:
Including:
These, I explained, would make the grid more resilient.
I also added that Wall Street appears to be abandoning fossil fuels. This observation is based on the data collected from Dec. 12, 2012, and published on Popular Logistics, here, that show that for the period from Dec. 21, 2012 to July 21, 2015,
The full text of my prepared remarks is below:
On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 in the Sustainable Energy space and $8.0 in the fossil fuel space. Excluding the value of dividends and transaction costs, but including the bankruptcy or crash of three companies in the sustainable energy space.
Elgin Marbles in the British Museum
The National Debt of Greece, according to National Debt Clocks . Org, here, as of Thursday, July 10, 2015, 10:45 PM EST, was $380 Billion USD and 345 Billion Euros.
A lot of money, but only $32k EU per person, only slightly higher than the typical American college student’s debt. (US News reported, here, “69 percent [of 2013 graduates] left school with an average of $28,400 in student loan debt.”)
But back to Greece …
On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 in the Sustainable Energy space and $8.0 in the fossil fuel space. Excluding the value of dividends and transaction costs, but including the bankruptcy or crash of three companies in the sustainable energy space,
On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 in the Sustainable Energy space and $8.0 in the fossil fuel space. Excluding the value of dividends and transaction costs, but including the bankruptcy or crash of three companies in the sustainable energy space,
The conclusion appears to be that sustainable energy is as good for the portfolio as it is for the planet.
On Dec. 21, 2012, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; $8.0 in the Sustainable Energy space and $8.0 in the fossil fuel space. Excluding the value of dividends and transaction costs,
On Dec. 21, 2012, drying off from Hurricane Sandy, I put $16 Million imaginary dollars in equal imaginary investments in 16 real energy companies; Eight in the Sustainable Energy space and eight in the fossil fuel space.
Old Picture of President Obama & Speaker Boehner
The NY Times Editorial Board describes the shutdown, here, as “John Boehner’s Leadership Failure.” USA Today wrote, here,
“This shutdown, the first in 17 years, isn’t the result of two parties acting equally irresponsibly. It is the product of an increasingly radicalized Republican Party, controlled by a disaffected base that demands legislative hostage-taking in an effort to get what it has not been able to attain by the usual means: winning elections.”
On Saturday Night Live, Saturday, 10/5/13, Miley Cyrus and the cast mock-umented the GOP celebration over the shutdown with “We Can Stop (The Government).”
But Art and Politics aside, what are the effects of the Shutdown on the Economy?
The Government Shutdown increased Unemployment by 1.8 million, the Unemployment Rate increased 16.2%, from 7.31% on August 31, 2013 to 8.48% on October 2, 2013. At the same time, GDP growth dropped 20%, from 2.5% to 2.0%.
5$ and $20
“FEDERAL RESERVE NOTE”
“THIS NOTE IS LEGAL TENDER FOR ALL DEBTS PUBLIC AND PRIVATE”
Two intertwined events took place between the end of World War II and the dawn of the 21St Century.
Paul Krugman, PhD, Nobel Laureate
The House Republicans, led (or maybe followed) by John Boehner, R, Ohio, are ready to shut down the government in order to force President Obama to delay implementation of various components of the Affordable Care Act, aka “Obamacare.”
They are not shutting down the entire government. The government will halt so-called “non-essential services.” The EPA, FDA, IRS help desk will be furloughed. This is precisely what Grover Norquist, Charles and David Koch and other big Republican donors want. It’s what they mean by “Starve the Beast.” Oddly enough the shutdown does not include Congress, which will remain in session, so our Representatives in the House and the Senate can continue to work, or at least draw paychecks. Continue reading
In December, 2012 I created two portfolios, a “Sustainable Energy” portfolio comprised of 8 stocks in the solar, LED lighting, wind and biofuel sectors, and a “Fossil Fuel” portfolio, comprised of 8 stocks in the coal, oil, and fracking sectors. The results, after seven months, as illustrated above:
The Sustainable Energy portfolio more than doubled: it is up 101.77%
The Reference Fossil Fuel portfolio is up 5.4%
The Dow Jones Industrial Average is up 18.75%
The S&P 500 is up 18.6%.
The Sustainable Energy portfolio has significantly outperformed the Dow Jones Industrials and the S&P 500 and the Fossil Fuel portfolio.
These data are summarized in table 1 and below. Continue reading
Social Security will be solvent until 2038. (Social Security Adminstration, Summary of 2012 Annual Reports). Social Security is completely funded by the Social Security Tax and the payouts add nothing to the deficit. Reducing Social Security benefits will not reduce the Federal deficit one cent. Social Security benefits are fully funded until 2038. However, there are five changes to the structure of the Social Security tax that could, and I think should, be made.
First, eliminate the ceiling. Currently the Social Security tax is 6.2% of the first $110,000 of income. Everyone who makes $110,000 or less pays 6.2% of his or her income into the Social Security fund. People who make $50,000 pay $3,100. People who make $100,000 pay $6,200. People who make $110,000 pay $6,820. But people who make $1,000,000 also pay $6,820, as do people who make $100 million, or $1 billion. This makes Social Security a regressive tax. Eliminating the ceiling would make it flat tax.
Second, impose a floor, perhaps $25,000 per year. This would transform the tax from a regressive tax into a slightly progressive tax for the lower 80%.
Third, transform the structure of the tax to a fully progressive tax, as illustrated below.
| Progressive Structure for Social Security | |
| Income | Tax Rate |
| Under $25,000 | 0.00% |
| $25,001 to $50,000 | 2.50% |
| $50,001 to $100,000 | 3.50% |
| $100,001 to $250,000 | 4.50% |
| $250,001 to $500,000 | 5.50% |
| $500,001 to $1.0 Million | 6.50% |
| over $1.0 Million | 7.50% |
| Table 1 | |
Fourth, REQUIRE, elected and appointed representatives in all branches and at all levels of Federal government to participate in the program. That would include the President, Representatives in the House and Senate, the Honorable Justices of the Supreme Court, lower courts, as well as elected representatives in the governments of the states of the Union and territories.
And Fifth, consider Capital Gains, distributions from Trust Funds, and other distributions that are not “W2 Income” as defined by the Internal Revenue Service to be treated like “W2 Income” for the purposes of funding Social Security.
Other posts on tax policy:
