February 4, 2010
Featured Trades: (AUSIE/EURO CROSS),
(ELECTRIC CAR MATERIALS DEMAND),
2) I found this interesting table from the QVM group that listed the impact that electric cars, which will soon be produced at one million units a year, will have on the supply and demand for raw materials. Here are my comments:
Aluminum: Lighter cars need more aluminum for bodies
Coal: Greater electricity needs increase demand from this cheapest of sources.
Copper: Big increase in demand for copper wire from electric motors and the grid.
Corn: Kiss the pork barrel ethanol program goodbye. Demand falls.
Natural Gas: Some 50% of new power generation facilities are gas fueled.
Lead: Older technology batteries still use lots of lead.
Lithium: You can't lose. If electric car demand doesn't kick in, then fertalizer demand will.
Nickel: The same batteries use nickel
Oil: Some analysts think gasoline demand could drop by 50% by 2020 because of electric cars, mileage improvements in conventional cars, and flat growth of the total car market.
Platinum: Demand falls from fewer catalytic converters, but this will be offset by growing monetary demand for the white metal.
Uranium: More power demand means more nukes everywhere.
Zinc: Battery demand again
3) I couldn't for the life of me figure out why New York's former governor and federal prosecutor, Elliot Spitzer, wanted to invite me to dinner. He wasn't flogging a book or promoting a movie, and he certainly wasn't running for office again. But I went anyway, thinking perhaps the notorious 'Client No.9' might let me peek at his famous black book. Elliot, who showed up wearing a classic New York blue pin stripped suit that seems oddly out of place in San Francisco, is currently teaching at the City College of New York, writing, and running his family's commercial real estate business. The advantages that the US enjoyed over the rest of the world in 1945, such as a monopoly in skilled labor, are now long gone. The driver of the world economy has switched from America to Asia in the nineties. As a result, income distribution here has morphed from a bell shaped curve to a barbell, with both the wealthy and the poor increasing in numbers, squeezing the middle class. The financial crisis compressed 30 years of change into two, taking us from libertarian Ayn Rand to pay czar Ken Feinberg in one giant leap. Having cut his teeth prosecuting the Gambino crime family in the eighties, Elliot had some views on the need for more regulation. We only need to enforce the laws on the books, not pass new ones. The 'white collarization' of organized crime has been a secular trend since the sixties. He said the ethical lapses in the run up to the crash were best characterized by a quote from Merrill Lynch's Jack Robins; 'What used to be a conflict of interest is now a synergy.'AIG getting 100 cents on the dollar was the greatest scam in history. The US did not extract a high enough price from highly paid executives and shareholders of financial institutions for failure, and should have let more firms go under. As for his own scandal last year, Elliot admitted that he failed, that his flaws were made publicly apparent, and that other politicians should be smarter than he was. Although Elliot had some good ideas, I was still puzzled over what this was all about as I ploughed through my creme brulee. Perhaps the governor has a pathological need to be in front of the spotlight, even at the risk of flaming out. And no luck with the black book.
QUOTE OF THE DAY
'Screaming from the top of the ramparts is great cardio, but doesn't give any answers,' said former governor Elliot Spitzer, about the current political debate.