New report on Potential for Renewable Energy use in the US

You can read the report online for free, the summary of the findings:

1. Renewable could account for 10% of US energy needs by 2020
2. To increase the usage of renewable energy greater than 10%, significant investment, technological progress, policy changes and incentives need to exist
3. technological developments and consistent policy will need to be coordinated with manufacturing capacity and access to capital in order to accelerate deployment of renewable electricity

The Crisis and The Response - An interesting panel debate

Here is a very interesting debate by Bill Bradley, Niall Ferguson, Paul Krugman, Nouriel Roubini, George Soros, Robin Wells et al.

My Summary:

1. The US banks have to be nationalized

2. We need better regulations around derivatives and bank capital norms

3. The US needs to grow through normal sustainable means like investing in technology and innovation and increasing productivity

4. The US consumer would have to scale back on their consumption and increase savings, at the same time the rest of the world needs to increase their consumption and decrease their savings

5. All the stimulus in place would have to be reversed at the first sign of reversal as it has huge implications to the US balance sheet and its credit worthiness

A story on a personal credit crisis...

I thought the post by Greg Mankiw was very interesting and an eye opener to all those who are outside of the US to learn what can typically go wrong. Given that I live in Iceland, the above story is closer to home and a number of households without much of the issues described in the article have fallen into a big debt trap due to the Icelandic currency.

The worst is yet to come...

I have been following this link, which is basically all the press citation of Nicholas Nassim Taleb, based on which I have created another link which basically has the following search term:

Nicholas Taleb OR Dr.Nouriel Roubini OR Jim Rogers

Ok, these are the only three guys who are saying that things are going to get worse before they get better but we still need to do certain things before we see a recovery. I think and the authors above agree that the Stock Market is celebrating prematurely and we are going to see another downturn before things start to recover, maybe by 2010 or 2011. The biggest problem is the dollar and the pending assets in the Real Estate market that is going to hit main street in the next couple of quarters.

here is a figure comparing Commercial Mortgage Backed Securities Credit Spreads and Deliquencies, Spreads are high, deliquencies are low...
good indicator that the worst is yet to come. It has not come because of the bail out the banks who hold these instruments have basically locked the box and thrown the key, however they cannot keep at that level for a prolonged period of time as the Economy goes through a slow down. For crying out loud the unemployment rate in the US is 8.9% and the earning season is not giving any cheer as no one knows how bad it is going to get.

USA might loose its AAA rating???

Ok, this looks like a self fulfilling prophesy coming true... I just wrote that the US dollar might be under pressure and now the Chairman of S&P stating that the soverign rating of the USA is at risk? Listen to the interview at CNBC here
This sounds like an in-probable event but what the heck is going to happen if this becomes true? It looks like a global collapse of the magnitude that we did not know about... a Black Swan event!!! (now you should play the JAWS theme song!) I don´t know if that is going to happen or not, USA is still the most innovative country in the world with Apple, Google, Facebook and Microsoft... but what the heck do I know, maybe if GM and Ford fail all other industries might fall like dominos.

Ladies & Gentlemen fasten your seat belts its going to be a bumpy ride for the next couple of years.

America: More like Sweden?

Tim Worstall writes that America is more like Sweden. It is interesting how he deciphers the numbers and talks about the general perception and what the Economic Policy Institute does not want you to understand. Greg Mankiw writes about the graph and summarizes that

• Income inequality in the United States is greater than it is in western Europe. Average income is also higher in the United States.
• The poor in the United States have about the same real income as the poor in western Europe. The rich in the United States, however, are much richer.

However the author of the original article says that US should have more of

• have a social safety net, and that we have a duty to provide for those incapable or unlucky enough to be unable to do so for themselves, we need to set some level at which such help is offered.
• The standard of living of the poor in a redistributionist paradise like Finland (or Sweden) seems a fair enough number to use and the USA provides exactly that. Good, the problem's solved. We've provided -- both through the structure of the economy and the various forms of taxation and benefits precisely what we should be -- an acceptable baseline income for the poor. No further redistribution is necessary and we can carry on with the current tax rates and policies which seem, as this report shows, to be increasing US incomes faster than those in other countries and boosting productivity faster as well.

Repeat After Me by Greg Mankiw WSJ

Repeat After Me by Greg Mankiw I wish the politicians and Lou Dobbs would read this and bang their heads against the wall when they argue against it!

It is so simple and drives home the point, government should try to maintain Peace, levy easy taxes and establish a tolerable administration of justice... when your government stops doing this try to remind the people around you to read "Repeat After Me"

How to Stay Free...

Democracies have only recently been considered desirable. Historically, it was feared that democracies always self destruct when citizens, forgetting that you cannot remove want and misery through legislation, insist on government actions that physically and morally bankrupt their nation. Friedman explains why the United States has so far avoided this outcome and how we can continue to do so. This program includes an interview of Dr. Friedman by Lawrence E. Spivak.

So much of what Dr.Friedman talks about in the 1980 is so relevant even now and he says why it will be relevant forever. It is a great reminder that everyone is incharge of their own economic destiny no social program or government can solve it for them.

Wal-mart - prodigious job-creator?

Greg Mankiw says George Will and Jason Furman are right about Wal-Mart being the most prodigious job creator in the US. Wal-Mart saved $200 million to consumers much greater than any government funded program in the world. It employs 1.3 million people and receives job applications 77 times more than its demand... of course the world perceives them as this Evil Corporation!!!

It is incredible what a free enterprise and the market forces can help a company & economy to acheive...