The Market Ticker
Commentary on The Capital Markets

Lockheed-Martin apparently believes they are on the cusp of a breakthrough when it comes to nuclear fusion.  Color me skeptical, but very interested.

Fusion is what powers the sun, of course.  It also brings the promise of (relatively) clean nuclear energy, since the reaction products are not dangerous.  There remains radiation (and lots of it!) emitted during operation, and activation of materials in the reactor still occurs, but the production of radioactive isotopes as a consequence of the consumption of the fuel does not occur.  For this reason it is a dramatically superior nuclear process, but for one problem: it's damn hard to make happen, and thus obtaining more energy out, in commercially-viable amounts, than you put in has not been achieved.

It has always been "10 years" away from viability.  It was 50 years ago, 40, 30, 20 and now.  The reason for this is that creating the conditions under which fusion takes place requires an environment of extreme heat and pressure, and that takes energy to achieve.  You need to somehow not lose that energy put in to the environment or the reaction you get provides insufficient payback on your energy investment for your fusion reactor to make economic (and operational) sense.

I note that despite the alleged crowing if you read carefully you will find that Lockheed-Martin is not claiming that they have achieved an energy surplus, say much less a large one.  But they think they are on the path to do so.

If true, this would be revolutionary -- both in terms of the economic and geopolitical impacts.  Specifically, it marks the end of the "dig it out of the ground" oil economy as the only means of obtaining liquid hydrocarbons (you can make them from any carbon source, given available energy) and it further means that fresh water deficits can be cured, since there is no shortage (anywhere), nor will there ever be, of sea water.




View this entry with comments (registration required to post)


There are times that all I can do is laugh.  This "revelation" by Matt Stoller is one of them.

In other words, Greenberg’s case is revealing that the bailouts were done selectively, and there was an attempt to cover up what happened. The Federal Reserve and the Treasury ended up treating Goldman/JP Morgan/Citigroup shareholders and employees exceptionally well, AIG shareholders less well, and the public like irrelevant peasants. 

Well, sort of.

What's really at issue here is that The Fed and Treasury (along with the Insurance Commissions involved) acted illegally, both in the first instance (either there was a duty to regulate if there was systemic risk and these were regulated industries, in which case they failed to do so, or there was no systemic risk in which case let 'em fail was the only proper outcome) and in the second instance in that the actions The Fed took were not authorized at the time by law and then everyone scrambled for retroactive means to cover their ass.

This narrative is fundamentally dishonest. Opponents of the bailouts said a lot of things at the time about the motives of the people in charge. It turns out that bailout opponents were largely correct, and the bailout apologists were lying and/or wrong. Increasingly, the public, judges, and politicians will recognize that the way the corrupt manner in which bailouts were done turned property rights into an explicit reflection of arbitrarily exercised political power.

This is not news.

Nor is it news that Bernanke lied regarding to the commercial paper market; he claimed TARP was necessary to protect it, TARP was passed, Paulson knew before it was passed that he had modified its intent to not rescue commercial paper but did not tell Congress this and then Bernanke set up his own facility at The Fed to perform that rescue -- without TARP, thereby proving it was unnecessary for that purpose (in other words, proving up his own lie.)  Neither Bernannke or the Fed ever answered for that lie or the myriad others he told during that period of time, despite myself and others calling him on the carpet for same.

One of the most-outrageous examples of these "fibs" was Bernanke's testimony shortly after the collapse occurred that he had been "adding liquidity" into the maw of the collapse itself.  As I pointed out at the time from data published by the NY Fed itself The Fed did no such thing -- it in fact drained system liquidity into the maw of the collapse.

GM was another example.  Those who held GM credit were unlawfully dispossessed of their right to recover in bankruptcy what was theirs because payouts were made to others who held inferior positions in the capital structure (primarily the UAW via their benefit programs.)  Those who were disadvantaged sued and lost.

Then there were those who bought various structured products that were designed so that in order to look at the documentation necessary to make a claim for fraud you needed a supermajority that included the super-senior tranche holders.  You could never get there, since those people were kept whole even if everyone else lost 100% of their money and, what's worse, since investigations and document production cost money to perform and that must come from the trust beneficiaries the super-senior holders not only had no incentive to cooperate they had an active incentive to obstruct any such attempt so long as their position was paid out. 

This little clever bit of design made it effectively impossible for any holder of these "products" to sue for fraud on the premise that the underlying loan quality was intentionally misrepresented because they could not gain the documentation necessary to file a suit and actually win, as you can't sue on speculation, you must sue on facts.  That in turn has led to those suits being thrown out.


View this entry with comments (registration required to post)

Vindication comes to the patient...

HBO's streaming announcement didn't help, and neither did weak guidance and decelerating growth.

When you're priced at 134x earnings absolutely nothing can go wrong or you get destroyed.

In this case if you were long the stock you just saw 26% of your money evaporate within 30 minutes.


PS: Just wait until the other dominoes come down on this one...... Raise your glass to stupidity America, bidding up stocks to 134x earnings is, well, stupid -- and when you get reamed doing it just remember who's fault it is that you got so greedy as to not sell out before this point -- YOURS.

Oh, by the way, what's Amazon's P/E?

View this entry with comments (registration required to post)

Showing still out of stock, but orderable with a firm commit on price.

Done.  Now I see how long it takes to actually get it.

View this entry with comments (registration required to post)

From the Census (we make 'em up as we go along) Bureau:

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for September, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $442.7 billion, a decrease of 0.3 percent (±0.5%)* from the previous month, but 4.3 percent (±0.9%) above September 2013. Total sales for the July through September 2014 period were up 4.5 percent (±0.7%) from the same period a year ago. The July to August 2014 percent change was unrevised from 0.6% (±0.2%).

So that report is nasty, down everywhere an unadjusted basis.  The only metric that was "slighty" ok was electronic stores, which were only down a bit -- but they were still down.

As you know I trust the so-called seasonal adjustments as far as I can throw them -- so I use the unadjusted numbers.  There is simply no joy to be found there, with auto sales being (as reported) a large decrease -- in fact, a near-collapse move.

I'm sure someone will point to the decrease in gasoline as a good thing, since the price has fallen so much.  But I'd like to point something out to the mouth-breathers on CNBC and elsewhere in this regard: They always say that falling gas prices wind up being spent somewhere else -- that is, when gas prices (and thus sales) fall, there is an increase in other categories to make up for it, as it is effectively a tax decrease.

Ok, where is it?

I do have a prediction for next month: Drinking establishments will show an increase. smiley

View this entry with comments (registration required to post)

Main Navigation
Full-Text Search & Archives
Archive Access
Get Adobe Flash player
Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.


The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be reproduced or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media or for commercial use.

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.