The Cows are Drunk and My Beer Tastes like Cow Patty…it Must be Earth Day!

It has come to the attention of Your Genteel Moderator that some of his refined readers believe he has been unkind in consistently taking companies to task for greenwashing, i.e. spinning their actions or processes as environmentally friendly when there is at least some evidence to the contrary. Having reviewed past Blogposts, there has certainly been a good deal to say about corporate greenwashing, and little have I focused on those actions by companies that do indeed act in ways that represent real, meaningful and effective commitment to the environment. It is therefore with great pleasure that I stitch together this post which covers two of my favourite things: Vermont and Beer.

http://www.msnbc.msn.com/id/21134540/vp/24278118#24278118
http://www.cnbc.com/id/24262297/for/cnbc
http://www.businessweek.com/ap/financialnews/D9075PKO0.htm

Looks like those Down East Yankees at the Long Trail Brewing Company have got the green coming and going. The privately held Long Trail Brewery of Bridgewater VT doesn’t release detailed financials but with nearly 90,000 barrels of installed capacity, they stand solidly in the upper ranks of America’s independent craft brewers, have grown solidly and steadily since their 1989 debut, and were just this month ranked (by sales) 22 out of 1,406 small, independent craft breweries across the country. With 19 years of successive growth, expansion plans telegraphed by permits the company has obtained, and continuing rumors of some kind of Anheuser-Busch link-up afoot, we can safely say that this is a business-savvy and successful company, if perhaps another Ben & Jerry’s corporate sell-out in the making.

http://blog.oregonlive.com/thebeerhere/2008/04/brewers_association_releases_t.html
http://www.beerscribe.com/news.html

So when a company like Long Trail (the largest to yet do so) signs on to Central Vermont Public Services “Cow Power” program and begins utilizing electricity generated by the same cows that it flogs the hops and malt leftovers from beer production to as feed, we really are moving into an area of seemingly solid green economics and science. Because not only does electricity generation from the methane released from cow manure represent use of a “green” fuel, it also helps diminish a significant source of so-called greenhouse gas. According to an Earthsave report (ah, those wonderful environmental campaigners unhindered by inconveniences like the truth), animal agriculture is the single largest source of human activity related methane gas emissions. The EPA suggests that it is the third largest such source, following landfills and natural gas systems. In any event, according to multiple sources animal agriculture is a major source of methane, a leading “greenhouse gas”, so diminishing the emission of methane by using cow manure as fuel to generate electricity must be beneficial (even if it simply replaces methane with CO2). Finally, there is a substantial benefit simply from consuming the manure as fuel. You can only spread so much muck on your fields and maintenance of manure slurry is a major environmental issue, and cost, for dairy farmers, so much so that foreign dairy farmers are moving to the US to benefit from less severe environmental regulations, among other things.

http://earthsave.org/globalwarming.htm
http://www.epa.gov/methane/sources.html
http://www.cvps.com/cowpower/How%20It%20Works.html
http://www.google.com/search?q=cow+manure+slurry+management+environment&hl=en&start=0&sa=N
http://findarticles.com/p/articles/mi_qa4051/is_200712/ai_n21185482

Long Trail Principal Andy Pherson must presume that demonstrably and seriously going green will in fact attract more customers and sell more beer. Coming from a small, independent, Vermont craft brewery, this has the intuitive ring of truth to it. Long Trail’s portfolio of ales are not trading on a price proposition. Building increased energy expenditures into the premium charged for their beer, or at least mentally (let’s not toss around any GAP contravention allegations) writing some portion of those costs off to marketing expenditures makes good sense for a company that has long cultivated an independent, eco-friendly image. And there’s the rub for most larger companies. When the Long Trail Brewery of Bridgewater VT does something green like contract for premium electricity (it will allegedly raise the electricity costs by some $ 10,000 per annum), it sounds credible, whether the company has a track record of environmental commitment (and Long Trail does), or not. When Shell puts a number of earthy-crunchy scientists on its TV ads saying how much the company cares about the environment, well, I think they are contributing more methane gas to the environment.

http://www.ecobrew.net/ecobrew.html

The difference between greenwashing and actually generating positive investor or consumer reaction to meaningful green action seems directly related to the company’s “methane meter” reading. The credibility of the green activity has to be solid. Virgin Airways flying from Amsterdam to London on 20% babassu nut bio-fuel ( see March 5 blog entry) may well advance the development of aviation bio-fuels, but it doesn’t make Virgin “green” and it has the wafting scent of another palm oil environmental disaster in the making. When a company has a comprehensive program in place aimed at diminishing its environmental impact, and the doing so costs them money, it becomes credible and tangible.

http://www.cspinet.org/new/200506021.html

The Bloated Plutocrat was not interested. “Beer? I don’t drink beer and unless Vermont miraculously develops a credible wine industry anytime soon, I’m not very interested in the state either. There was that charming Bing Crosby movie of course, but the skiing is much better in the Rockies in any event. As for CVPS creating electricity from cow manure, well Bully for them!” The Bleeding Heart on the other hand hasn’t been so pleased since the civil union legislation went through in Vermont. “ This is exactly what we mean when we talk about “the green economy”! This is the type of change that Senator Obama is talking about – changing the way we do business, changing the way we live, and changing our purchasing behavior. I do hope that I can find Long Trail beers in Fairfield County.”

Your Genteel Moderator must admit to bias in this matter. Having spent a good deal of time in Vermont, where our family has had roots since the middle of the 19th century, and being somewhat fond of Long Trail’s IPA, rather than question the real impact of manure driven electrical generation, I will focus on further study of the company’s portfolio and remind my respected readers to be careful of the carousing beer fed cows (let us hope that Central Vermont Kobe beef is not next on the menu) in the greater Bridgewater area…

Guns Before Butter

That was the title of a discordant, angry song by the Gang of Four, a band that I quite liked in my misspent youth. They were loosely paraphrasing Otto von Bismarck, the effective founder of modern Germany, and suggesting a militaristic preference for the one over the other. On the other hand, ‘butter’ is a part of the well known phrase referring to basic food goods, ‘bread and butter’, and one’s source of income. Well, this week Wal-Mart, the largest seller of firearms in the US, appeared to put voluntary restrictions on the sale of guns ahead of the bread and butter of sales. Given the Presidential campaign, recent jibes about gun-owning, and the landmark case (Heller v. District of Columbia) regarding the District’s restrictions on gun ownership pending in the Supreme Court, Wal-Mart’s decision made a lot of noise. What was the buzz about?

http://www.lyricsmode.com/lyrics/g/gang_of_four/guns_before_butter.html
http://www.msnbc.msn.com/id/24114145/
http://www.southbendtribune.com/apps/pbcs.dll/article?AID=/20080415/Biz/759288949

Wall Street appears to have approved because Wal-Mart gained $1.12 as one of the DJIA leaders on the first day of trading following the announcement. “Mayor’s Against Illegal Guns”, led by New York City Mayor Bloomberg and Mayor Thomas Menino of Boston, approved, with Wal-Mart announcing its decision in association with the Bloomberg funded coalition of Mayors in favor of gun control. The Brady Campaign to Prevent Gun Violence approved, as did other organizations in favor of gun control. Both groups applauded Wal-Mart’s adoption of a 10 point plan to strengthen background checks on buyers and its employees who sell guns with measures that include, among other things:

· Creating a record and alert system to record when a gun sold at Wal-Mart is later used in a crime. If the purchaser of that gun later tries to buy another gun at Wal-Mart, the system would alert the sales clerk of the prior buy and could refuse to make the sale.

· Retaining the recorded images of gun sales in case law enforcement wants to view them later as part of an investigation.

· Expanding background checks of employees who handle guns and expanding inventory controls.

http://finance.yahoo.com/q?s=WMT&d=t

The National Rifle Association did not approve. “I view it as a public relations stunt that stigmatizes law-abiding firearms purchasers exercising their freedom under the Constitution,” said NRA CEO Wayne LaPierre. He further said that if politicians were serious about reducing gun crime they would worry less about legal sellers and buyers and get tougher criminal sentences for illegal gun dealers. “I honestly think it’s a corporation trying to curry favor with politicians as opposed to doing anything meaningful about stopping crime,” said LaPierre.

There’s certainly something to be said for LaPierre’s point of view. It is highly likely that currying favor with politicians was somewhere on Wal-Mart’s decision tree, along with litigation risk prevention. On balance, for the company and its shareholders, this would appear to be a smart move. Outside Alaska, the company only retails rifles and shotguns (in Alaska it does sell handguns). As handguns are statistically more likely to be used in crimes Wal-Mart has already managed its litigation risk to some extent. Furthermore, citing falling revenues from gun sales in many outlets, two years ago this very week the company ceased rifle and shotgun sales in about 25% - 30% of all its mainland US outlets. Given these facts, it seems unlikely that sales revenues will be significantly affected by the new voluntary restrictions (a fact that Wall Street seems to agree with) while at the same time, the company has improved management of its litigation risks and, yes, curried favor with politicians in major urban centers where it wants to open new outlets and where such moves have previously met with substantial opposition. Wal-Mart has undoubtedly got this one right.

http://www.nytimes.com/2006/04/15/business/15walmart.html?ex=1302753600&en=cbf12029eb32b929&ei=5090&partner=rssuserland&emc=rss

But what of the NRA’s criticism? Doesn’t LaPierre have a point in saying that these types of restrictions will stigmatize law-abiding firearms purchasers? Yes and no. Given the Malthusian proliferation of state and municipal gun laws that have emerged over the last two decades, those with a broad view of the Second Amendment, like the NRA, have a valid argument that more and more restrictions may indeed serve to “stigmatize” law-abiding purchasers of firearms by making exercise of their Second Amendment rights not dissimilar to the purchase of pornography, a shady and shameful thing. And most people could probably agree that a father taking his son to buy his first deer rifle should not have to undergo a shady or shameful experience.

http://www.csmonitor.com/2008/0319/p25s07-usju.html
http://www.mcclatchydc.com/homepage/story/30795.html
http://www.nationalcenter.org/2008/03/on-eve-of-dc-gun-ban-supreme-court-case.html
http://www.foxnews.com/story/0,2933,338282,00.html

But the Supreme Court seems poised to make a decision affirming a lower court’s ruling that the District of Columbia’s near total ban on handgun ownership is illegal and contravenes the Second Amendment rights of those like the six DC residents who originally brought suit against the DC law. So LaPierre and others with a broad view of Second Amendment rights need to rethink their strategies. If the DC ban is indeed overturned by Supreme Court decision, there will be substantial jurisprudence in favor of an individual’s right to keep and bear arms and it will open many other state and municipal gun laws to challenge. This will be a dangerous time for gun owners, and gun-owner advocacy groups. Gloating may see them snatching defeat from the jaws of victory.

“Hell hath no fury like a Liberal scorned”, writes the Bleeding Heart. “If the Court overturns the DC law banning handgun ownership in the District, we will mobilize en masse to oppose further erosion of the rights of state and municipal governments to create reasonable and appropriate laws aimed at diminishing gun violence and gun crime in our cities. This will not stand as an open invitation to every crazy gun-owner to stock up on Glocks and Magnums so that our children can be put at further risk”.

The Bloated Plutocrat was more subdued in his reaction to the subject. “I can’t imagine why anyone would be buying shotguns from Wal-Mart in any event. I had a lovely set of Purdeys made for me several years ago and that’s what you want. Nothing beats a bespoke gun. As for the Second Amendment, I never viewed it as the ‘Deer Hunting Amendment’. I always understood it as protecting a law-abiding individual’s right to keep and bear arms in order to protect himself and his community from both foreign invaders and domestic tyranny. In fact, less hunting is what we should be after. When I go grouse shooting, I don’t want to have to share the woods with a bunch of yahoos in camouflage waving around Wal-Mart shotguns. Hunting is a gentlemen’s sport and should be reserved for gentlemen.”

LaPierre and others who favor a broad view of the Second Amendment should take note of the Bleeding Heart’s words. If the Supreme Court affirms overturn of the DC handgun ban, gun control advocates will go ballistic. Compromise is best made from a position of strength and, while the NRA has battled on behalf of gun-owners for decades, it will be interesting to see whether it can make reasonable compromises on behalf of gun-owners as well. LaPierre may want to take a lesson from Wal-Mart about doing the right thing at the right time.

Love is in the Air........somewhere.

Ah, the wafting scent of tear gas in the air, police klaxons blaring, the sounds of rocks hitting plexiglass shields, riot police with arms linked marching through the streets. It must be Paris in the Spring.

I know. It’s not particularly sporting. Anyone can have a pretty good go at the French. This, however, is a return to a subject covered some weeks ago when unrest in Tibet first broke out and we explored both issues that corporate sponsors of the games may face and some strategies for dealing with these challenges ( See March 17 blog entry). Today’s efforts by thousands of protestors in Paris to extinguish (or steal?) the Olympic torch on its way to Beijing not only marks the French equivalent of Opening Day of the baseball season (protesting, sanctions violating, and slander being the national sports), it also suggests that there will be a real and sizeable community seeking to politicize the games and draw attention to China’s human rights record. Since the chances of China responding to French protests or any other type of criticism are slim, the ante has just gone up for Olympic sponsors.

http://nbcsports.msnbc.com/id/23978408/

Despite the government mobilizing some 3000 police, protestors so disrupted the running of the torch across Paris that the torch was indeed extinguished several times as it was ferried from area to area on a bus, and eventually the run was abandoned altogether. In a remarkable break with tradition, the French even stood up to a foreign force in their country. According to AP, “Outside, a few French activists supporting Tibet had a fist-fight with pro-Chinese demonstrators. The French activists spat on them and shouted, ‘Fascists!” What, instead of welcoming them with open arms, champagne, and dates with their sisters? How bizarre. “Le Monde” reported at least twenty arrests.

http://news.yahoo.com/s/ap/20080407/ap_on_re_eu/olympic_torch;_ylt=AjtVxxFYkXwC3Q3uK3HhKuvNaMYA

So, what now for the companies that have sunk millions into sponsorship of the games and built entire marketing campaigns and product launches around the games? Withdraw support and face an angry board-room and being shut out of the world’s largest potential consumer market? Stick it out with tired lines like Omega’s “We don’t get involved in politics”? With French protesters actually showing some spine, the likes of VW, a Beijing games sponsor, have to be getting increasingly nervous. At the Eiffel Tower, Green Party activist and politician Sylvain Garel commenced today’s fracas by lunging at the torch shouting “Freedom for the Chinese”. Later, some 35 legislators shouted “Free Tibet” outside Parliament as the torch passed. The Green Party is a serious force in VW’s home market, a reasonably strong movement across northern Europe, and influential with a lot of 70mpg diesel VW Polo buyers. When mainstream politicians are saying things like, “It is inadmissible that the games are taking place in the world's biggest prison”, things are getting tricky indeed. Socialist Party spokesperson Julien Dray said that the games were” turning into a sinister farce before they had even begun” and attributed the disturbances in Paris today “entirely to the Chinese government which has not seized the opportunity it was offered to show its desire for democracy and recognition of civil liberties”. He also called on the International Olympic Committee to announce that a boycott of the games is possible unless the Chinese government makes concessions on human rights.

http://www.bostonherald.com/track/star_tracks/view.bg?articleid=1079650

http://www.lefigaro.fr/actualites/2008/04/07/01001-20080407ARTFIG00439-la-flamme-olympiqueest-partie-de-la-tour-eiffel.php

http://www.lemonde.fr/sports/article/2008/04/07/la-flamme-olympique-est-dans-les-rues-de-paris_1031689_3242.html#ens_id=1020806

And what of the IOC? Spokeswoman Giselle Davies said, “We respect that right for people to demonstrate peacefully, but equally there is a right for the torch to pass peacefully and the runners to enjoy taking part in the relay,” she said. IOC President, Jacques Rogge, a Belgian, shook off today’s reaction by the French saying "there was no momentum for a boycott of the games". This despite French Foreign Minister Kouchner reiterating President Sarkozy’s earlier statement that he would reserve the right to do so "depending on conditions". In Beijing at an IOC meeting, and well aware of China’s increasingly furious response to criticism over its handling of unrest in Tibet (the government announced that the first group of people charged with “inciting unrest” will go on trial this week,) Rogge called for the “rapid, peaceful resolution of unrest in Tibet”, the first time he has done so and a sign that the pressure is mounting on the IOC.

http://www.ndtv.com/convergence/ndtv/story.aspx?id=NEWEN20080046119

http://www.rttnews.com/sp/todaystop.asp?date=04/07/2008&item=34

The Beijing meeting was doubly tough with Rogge under pressure to issues guidelines on athlete conduct with regard to their views on China and the games. Patrick Hickey, President of the 49 member group of European Olympic Committees and a substantial IOC power-broker said, "We just want him (Rogge) to tell us straight out where athletes cannot give their opinion or make demonstrations. There will be absolutely no gagging whatsoever of our athletes. We just want to be absolutely clear, and the only one to hear it from is the IOC president." Rogge will allegedly reveal those rules during a Thursday meeting. Expect more fireworks.

http://www.heraldextra.com/component/option,com_contentwire/task,view/id,35738/Itemid,53/

Time to review strategies, sponsors. “Masterful Inactivity” is looking less and less like a winning approach, although the Bloated Plutocrat seems to still favor it. While he has a good deal to say about the undervalued Yuan, he has been remarkably silent on this subject. Speaking to me this afternoon, he said, “It’s bad for business, all this fuss and noise, not what we need now. It’s not like the Chinese intervened when all those long-haired hippies and yippies were getting knocked on the head in Chicago in ’68, so people need to calm down and let the Chinese handle this. With recession afoot and the amount of US debt that China holds, some discretion is in order”. The Bleeding Heart could not be reached. Apparently he is in San Francisco, where today activists draped the Golden Gate Bridge in pro-Tibet banners. He did send Your Genteel Moderator an e-mail calling for everyone “to come together and love one another right now”, along with some star-struck saga about meeting Richard Gere. It sounds like he was revisiting some rather dubious Haight-Ashbury locales…

http://today.reuters.com/news/articlenews.aspx?type=newsOne&storyid=2008-04-07T085928Z_01_SP232964_RTRUKOC_0_US-CHINA-TIBET.xml&WTmodLoc=NewsArt-R1-MostViewed-3

A boycott of the games is not what sponsor companies need fear most. In fact, for those with good risk management and aggressive insurance policies, a large scale boycott could help extricate them from an increasingly difficult situation by providing them a relatively face-saving way out. The games going forward against the backdrop of an increasingly truculent China and a growing movement of consumer boycotts against sponsor companies is the scenario that should be causing sleepless nights. Especially in Europe, politically and socially motivated consumer boycotts over the last decade have been extremely well organized and largely effective in forcing changes in corporate behavior. Without getting out in front of such boycotts, companies face the increasing likelihood that down the road they will have to choose between angering China or angering their shareholders (and in some cases both!).

April Fools or Working Class Heroes: The Independent Truckers’ Strike

Your Genteel Moderator begs your indulgence in this departure from genre as he addresses the rumoured independent truckers’ protest against high diesel prices and low fuel surcharges, the means by which they recoup fuel costs. Independent truckers pay full price at the pump for diesel fuel and filling up a semi’s tanks can run to more than a $1000 at the more than $4.00/gallon diesel has been running at for some two months, up between 30% - 40% vs. last year. Despite recent declines in the price of gasoline towards the $3.00 gallon mark for regular, diesel has been headed north. The answer as to why diesel is so much more expensive than gasoline, when the reverse was true for decades, is complex.

http://blogs.usatoday.com/ondeadline/2008/04/calls-for-truck.html

A leading factor is the increased cost of producing ultra low sulphur, so-called “clean diesel”, fuel mandated by Federal law for 2009. Indeed according to the Energy Information Administration, diesel refining costs in February went up to 18% of the price of a gallon of diesel vs. 8% for gasoline. This exacerbates a tax differential of $0.06 more per gallon on diesel ($0.244) than gasoline ($0.184). This tax differential is both inexplicable and unacceptable in application to Ultra low sulphur diesel and the fact that, per gallon, there is more energy in diesel than in gasoline making it effectively more efficient. The price is further confounded by seasonal demand for heating oil (a refining and distribution competitor for pump diesel) which coincides with the steep divergence from gasoline prices since October 2007. Finally, according to some pundits, growing world demand for diesel is a factor. Your Genteel Moderator is stumped by this last explanation. As a distillate of crude oil, increasing global demand for diesel should have an impact on the overall price of crude oil, but it is counterintuitive that it should drive diesel prices up vs gasoline prices in the US, especially as diesel engines have yet to make significant inroads in the passenger vehicle market. Refined diesel is not being transported from Europe or Asia to the US, so US distributors are not directly competing with growing diesel demand on either continent. My learned colleagues and I would greatly appreciate information from our readers addressing the mystery demand increase in the US that is allegedly a driving factor in diesel prices.

http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp

http://tonto.eia.doe.gov/oog/info/wohdp/diesel.asp

But back to the truckers. Rumours abound, fueled by CB chatter and internet banter, that an independent trucker protest/shutdown is being organized for this week, with some reports suggesting it will start today. News outlets from TV and Radio to the internet have been touting April 1 as the date for an alleged “Truck-Out” with the modus operandi described as anything from a complete shutdown to trucks simply driving at the minimum posted speed (a fuel saving measure?). A quick check of Route 95 showed no obvious decrease in tractor-trailer traffic and a scan of Channel 19 on a CB turned up references to, but no evidence of, any widespread shutdown today. There is however a good deal of confusion about when this poorly organized, “grass roots” protest is to start, with dates from April 1 to April 23 being stated in various media. There is also a history of previous failed protests dating back to August 2005 when just the same buzz was in the air.

http://overtimetruckers.com/index.php

http://wbztv.com/local/truckers.strike.diesel.2.688598.html

http://www.kxii.com/home/headlines/17177421.html

The Bloated Plutocrat had a somewhat complicated view on the matter. “ Fuel prices are too high and are generating inflationary pressure without a doubt. Adventurist foreign policy and poor management of national resources are of course leading factors in driving up fuel prices but so is rising global energy demand. Little can be done about the latter that won’t come home to roost in our pseudo-recessionary economy. But as for those Bolshevik truckers, send out the Pinkertons’ and round them all up. We can’t have every Tom, Dick and Harry in a truck shutting down traffic and stirring up trouble. If Kerensky had had more spine we could have saved all that money wasted on the Cold War!”

Meanwhile the Bleeding Heart also seemed trapped in contradictions. “The truckers certainly have a reasonable concern. Were it not for the administration’s total inability to handle the Middle East and its ‘Might Makes Right’ approach to diplomacy, fuel prices would never have risen so high. Having said that, high fuel prices are a blessing for the environment and to the extent that they help curb emissions and save polar bears, we should be thankful rather than considering protests!”

Your Genteel Moderator must admit to ownership of a diesel vehicle and sympathy with the truckers over the highly divergent prices of gasoline and diesel fuel. One would have thought that excise tax equalization between Ultra low sulphur diesel and gasoline (at $0.184/gallon) would be an immediately appropriate action, followed by diversion of some of the enormous ethanol funding to incentivize increased Ultra low sulphur diesel refining capacity, as well as increased funding to support biodiesel development would all be sensible things that Congress could act on immediately…

Toyota for the Birds?

The Audubon Society announced this week that a recent Toyota grant of USD 20 million, the largest that the 103 year old organization has ever received, will fund its “TogetherGreen” programme for five years. “TogetherGreen” is a nationwide Audubon program to fund conservation projects, train environmental leaders, and offer volunteer opportunities to significantly benefit the environment according to the Society. TogetherGreen is about giving people the knowledge, the support and the opportunities they need to truly make a difference," said Audubon President John Flicker. "We will engage people of all ages, from every community and all walks of life to help shape a healthier future."

http://web1.audubon.org/news/pressRelease.php?id=400

Toyota has garnered substantial kudos from environmental groups for its environmental commitment and, among other things, its Prius car, a high profile hybrid suspected of substantial greenwashing about both its performance data and its real environmental impact (see Tesla Motors article below). Toyota has said it will engage its 36,000 U.S. employees and invite its business partners to join with others through TogetherGreen as conservation volunteers to take the individual steps that will add up to significant conservation results. And the company’s commitment to environmental responsibility is pretty hard to shake a stick at either internationally or inside the US. Its environmental initiatives and auditing are rigorous by any standards.

http://www.toyota.com/about/our_commitment/environment/index.html

Teaming with Audubon should come as no surprise. The Society is not only one of the oldest conservation organizations in the country, it has historically been one of the most sensible and well run. Not only is the Society well organized on a national basis and at the local level with strong grass-roots organizations, it has a history of rational action behind an unassailable cause. From a corporate perspective, there is very little risk exposure in an association with Audubon and considerable benefit. Birders are much more likely to be interested in Toyota sedan and SUV hybrids than the sort of young environmental activists that are associated with the seemingly more militant environmental organizations. Your Genteel Moderator congratulates the Audubon Society for not only its preservation and conservation work but for its excellent positioning and communications which have made it an ideal beneficiary organization for corporate giving. And hats off to Toyota for putting its money where its mouth is; $20 million is real money in any vocabulary. Mind you, it isn’t all smooth sailing for the company. It has taken criticism from environmental groups over the poor fuel economy of its brand portfolio and its carefully crafted green image is not above suspicion.

http://www.toyota.com/about/news/community/2007/12/20-1-FoundationGrants.html

http://www.reuters.com/article/environmentNews/idUSN1140338120071012

http://seattletimes.nwsource.com/html/nationworld/2002579445_webtoyota23.html

http://hybridreview.blogspot.com/2007/10/truth-about-toyota.html

The Bleeding Heart could barely restrain himself. Forgetting or forgiving his perceived slander of the Prius in earlier posts, he waxed lyrical about Toyota’s social and environmental responsibility and went on in great detail about some type of swallow that he examines in apparently great detail on the grounds of his Connecticut country digs. The only comment that seemed noteworthy above all the gushing was “Of course, Toyota needs to carry its commitment to the environment through to increase fuel efficiency and emissions reductions across its car and SUV range”, a potentially telling remark. The Bloated Plutocrat was more circumspect. He writes, “ Well, I would have rather seen this money and some of the other fortunes that they are giving away issued in the form of dividends, but I suppose the tax deduction is in order. I don’t particularly mind birds, other than those d***ed pigeons, and I do like a good pheasant shoot, so on balance I take it that this is no bad thing.”

Blinded with Science?

Am I the only adult in the Western world who doesn’t quite understand how so many leading financial institutions got themselves in so much trouble and why that trouble seems to be accelerating as of late? Reading the newspapers, it certainly seemed so, but it appears that I am not, at least in this case, suffering from a substantial intelligence deficit. Instead it appears that arcane, indeed near mystic, arts applied to the business models of many leading financial institutions may be the issue. Not that they will admit to it of course. The problem, according to the great Wall Street firms, all stems from foolish consumer borrowing. On the plus side, this has the ring of credibility since most people regard “others”, at least in the abstract, as entirely capable of vast degrees of foolishness. However, if the borrowing was so obviously foolish, why were the Wall Street titans buying the debt?

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/23/AR2008032301416.html

http://www.reuters.com/article/businessNews/idUSN0135773520070812

Apparently there is a case to be made that the Wall Street kingpins may not have entirely understood their exposure. This may also be a leading reason why there is little explanation from the likes of Citigroup and Bear Stearns about “how it all happened”. Rick Bookstaber’s seemingly prophetic 2007 “A Demon of Our Own Design”, did much to outline how the increasingly specialized and sophisticated financial constructs, akin at times to the spice dependent navigational techniques of the Spacing Guild in Frank Herbert’s “Dune” series, are creating substantial risk that few other than the “quants” that construct such devices can begin to understand.

http://www.consilientinvestor.com/articles/169.htm

http://www.wallstreetandtech.com/electronic-trading/showArticle.jhtml?articleID=204805477

http://www.financetech.com/showArticle.jhtml?articleID=184417510

In summary, it looks like the alchemistic formulae employed by Wall Street to develop ever more specialized financial instruments may have multiplied inherent and widely understood market risks, added debt loads beyond what investors would generally deem entirely prudent, and minimized the number of people who may understand the level of risk being developed. That’s nothing new. Those of us of a certain age remember similar critiques applied to Neolithic junk bond traders, and even more recently there was a collective head-shaking around the so-called “dot.com bubble”. But Wall Street's great trading houses are doing little to allay fears of further failures and, in failing to explain in terms that even network news anchors can understand what led to their over-exposure and how they intend to mitigate that risk, are encouraging increased fear and more talk of recession.

To help me better understand the cause of these current difficulties and what was likely to happen next, I turned to the Bloated Plutocrat, whose recent harumpfing on the subject suggests that he has not been negatively impacted by the credit crunch or the gargantuan debt write-offs on the Street. His take was not entirely candid however. “The problem with the golden youths who imagine that they move markets today is that their experience amounts to a drop of water in New York harbor. The simple fact is that there are simple ways to make money that virtually anyone can understand. “Buy low, sell high” is not just some t-shirt aphorism. If you don’t understand what you’re investing in, the chances are rather good that you will soon be shirtless. Investing in mechanisms that require a greater knowledge of higher math than use of common sense will yield results accordingly”. From this, I took it that the Bloated Plutocrat had gotten out of mortgage heavy mutual funds and other instruments some time before mid 2007 and was feeling particularly smug about doing so.

The Bleeding Heart was not much more helpful. “The teetering house of cards made up of our Wall Street financial institutions has brought this plague upon themselves and were it not for the many small investors who will pay the price for their arrogance, I could care less. This situation highlights the need for greater regulation and oversight by the government. What these quantitative analysts call “innovation” is no more than a somewhat ritualized form of gambling – with other people’s money! Now is the time that Congress should intervene and, following intensive investigations into the cause of these failures, develop a raft of new regulatory measures aimed at diminishing the negative impact of these highly speculative financial transactions on the common man." From this, all I could really gather was that the Bleeding Heart was unhappy about recent developments in the adjustable sub-prime mortgage that he had used to buy his Connecticut dream home with in 2006…

It seems that what the Street needs right now are fewer math geeks and more oily flaks. The Street can’t reverse the losses caused by its speculations in the mortgage markets, but if they would at least put some glad handing, smooth talking flaks out there to calm investor fears and mitigate the multiplying media frenzy, they might arrest the headlong run towards “recession” that the media and pundits seem hell-bent on getting.

Tesla Motors – More Greenwashing in the “Green Economy”

Are power plant emissions from burning fossil fuels substantially less harmful to the environment? I still don’t know. After trawling through cyberspace and having read through a number of scientific papers that purport to offer the answer to just that question, it seems that electricity generation may deliver less CO2 than the equivalent power generation by a gasoline powered car engine. However, when you add the emissions from the power plant used to generate the electricity that powers Tesla Motors sporty 125 mph top speed electric Roadster to the emissions generated in building the car and throw in the higher energy cost and carbon footprint impact of disposal of an electric vehicle drivetrain, over its lifetime a ¾ ton low sulphur diesel pick-up truck comes out ahead on environmental impact. The recent defeat of a Toyota Prius by a diesel BMW 520 in an mpg showdown underlines the real green-power of clean diesel. In fairness to Tesla Motors, they claim to have already identified a company that will recycle the lithium-ion battery packs after their intended 100,000 mile life-span and built the recycling cost into the vehicle’s MRSP of approximately $ 100,000.

http://www.teslamotors.com/
http://driving.timesonline.co.uk/tol/life_and_style/driving/used_car_reviews/article3552994.ece

The vehicle has received DOT approvals and passed all Federal Motor Vehicle Safety Standards, although Tesla have not released information on how it faired in these tests other than Vice President of Vehicle Integration, Malcolm Powell rather aptly noting, "I always find it interesting when people say, 'Isn't it dangerous carrying all those batteries around?' Well I don’t know about you, but I’d rather carry a load of relatively inert battery cells than 10 gallons of highly volatile, flammable liquid". Exactly 6,381 lithium-ion battery cells, of the same sort that you will find in your laptop or mobile phone, will power the car. The car will allegedly have a 200 mile range on an estimated 3.5 hour charge. Producing some 248 HP, peak torque from a standing start right up through 13,000 rpm, and a top speed of 125 mph, this two-seater loosely based on the Lotus Elise will make the Toyota Prius look like what it is, the car of dweebs.

http://www.dailytech.com/Teslas+Initial+Batch+of+100+Electric+Roadsters+Sold+Out/article3817.htm
http://www.dailytech.com/article.aspx?newsid=11123

But is it “green”? Tellingly, the company was the brain-child of Silicon Valley dotcom start-up uber-geeks, Martin Eberhard and Marc Tarpenning, who allied themselves with Elon Musk, of PayPal fame, back in 2003 to form the company. Neither Eberhard nor Tarpenning are still with the company but the dotcom bravado marketeering that has made successful IPOs out of so much hot air has served Telsa well. After substantial delays in production and a shake-up last year that saw CEO Eberhard replaced by Ze’ev Drori, the company has allegedly sold the first 100 vehicles that it will only begin making this month, despite the fact that they will be produced with “temporary” transmissions that substantially diminish performance. The Roadster has been successfully pitched to the media and public as “green” and, based on the claim of $ 10 million in sales prior to production starting, it may well make Musk, Drori and others plenty of green, regardless.

http://www.edmunds.com/advice/alternativefuels/articles/117264/article.html

The Bloated Plutocrat is enthusiastic. He writes, “Smart little car. 248 HP chucking 2700 lbs of sportscar around corners sounds like fun to me. Glad to see a group of entrepreneurs building a business that also makes environmental sense. That’s the way to save the environment. Let the markets lead the way. It’s democratic and rational. It’s not like these unwashed, ill-shaven hippies running around screaming about the Kyoto Treaty and all that nonsense. When people believe that new technologies and new products will deliver positive environmental change, they will adjust purchasing habits accordingly and the markets will deliver. It won’t exactly hurt the coal and oil stocks with fossil fuel still firing the power grid, but if it makes some people happy and other people money, there can’t be much harm in it.”

The Bleeding Heart has a different take on the issue, and almost refused to comment after my posting The Times article about a BMW 520d beating the pants off a Toyota Prius, but he is pleased about news of Tesla beginning production. “Given the government’s collusion with automakers, oil companies, and the tri-lateral commission, it’s amazing that Tesla ever got its Roadster off the drawing board, let alone into production. I can only imagine the merry dance they were led on trying to meet what were undoubtedly the moving goalposts of Federal Motor Vehicle Safety Standards as a last-ditch effort to stymie production of this revolutionary vehicle. With more of these vehicles in the pipeline, soon we can end our dependence on foreign oil, reduce greenhouse emissions, reverse global warming, and change the world!"

Cool ? Yes. Green? Well,.....maybe