Dana Blankenhorn

The Real China vs. U.S. War in Solar is Technology, not Price

The U.S. complaint about Chinese “dumping” of polysilicon solar panels is a sideshow to the real battle, over which technology will dominate the next generation of solar panels.

GTM Research indicates polysilicon costs could drop this year to 70 cents per watt, although producers are doing all they can to dampen that speculation.

The action is in new technologies that will drop costs far below that level on CIGS and thin films of all kinds.

REC Group of Norway, an integrated maker of polysilicon-based panels, says their Peak Energy series can deliver a return on investment in just 12 months with the highest performance in the industry.

Meanwhile gallium-arsenide cell producer Semprius, based on North Carolina, says its print-transfer technology has produced a module with an efficiency of 33.9% – nearly three times what current cells produce. Scaling that up, raising yields and dropping production costs, could have a profound impact on the market. (Siemens has a 16% stake in Semprius.)

It's not just higher performance, but lower cost achieved through production efficiency that is driving these markets forward. This means leadership in the space remains highly fluid.

And to this has to be added improvements in inverter technology, which can cut costs by increasing the amount of DC power produced by a cell that goes onto the AC grid, to system manufacturing costs, to channel costs, and to reductions in the cost of getting installations approved by government at all levels.

As I have said before these are early days in the solar industry. This is going to become the cheap energy no matter how much we drill baby drill. The only real question is whether America can capitalize on its advantages in research and capital delivery, not whether China plays “fair.”

 

 

The U.S.-China Alliance

Think of this as Volume 16, Number 4 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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Steve Jobs did something generations of political leaders have been unable to do.

He cemented the alliance between China and the United States.

He did this by making money for both, through cooperative development of his iOS line.  As he told the President, you can't make this in the U.S. We don't have the human infrastructure and logistics to produce, say, 37 million iPhones and 15.4 million iPads in one 90-day period, box them and and ship them, the way China can.

On the other hand, China lacks the software and marketing imagination needed to move that merchandise in countries around the world. It lacks the branding. Even the Chinese people know the difference between a real Apple Store and a Chinese knock-off. They will pay a premium for the real thing. And Apple, today, sits on $96.7 billion in cash.

Thus we have a symbiotic relationship, one that other companies can exploit, one that benefits the people and governments on both sides of the trade. Historically it's an important moment.

A Stand Up Guy

Republicans are having a primary fight right now that should rewrite some history books.

The assumption is that Republicans follow orders, while Democrats all want to lead the parade. Republicans vote with their heads, Democrats with their hearts.

So, Mitt Romney. It's his turn. He finished second last time, McCain lost, so it's his turn. He's got the money, he's got the looks, he's got the money, he's got the endorsements. And if his personality has a Nixon problem -- he's uncomfortable around people -- well so did Nixon. And if those Kennedys hadn't stolen 1960 Nixon never would have lost (and may have never gone paranoid).

But if Mitt Romney is the GOP ego, Newt Gingrich is its id.

Newt is still in this race because of one man, a guy I once worked for. Sheldon Adelson. Adelson cares about one issue and one issue only -- fealty to Israel and whatever Israel wants. The big story no one is writing is that Newt Gingrich has pledged such fealty, and he has $10 million (so far) to show for it.

But leave that aside. Other than Shelly's money, what is Newt Gingrich? You've got a man who was a politician for a quarter-century but who has actually spent the last 14 years in entertainment. He writes books, he talks in front of crowds or TV cameras.

He's a stand-up. As in stand-up comic. He's been doing it most of his life -- it was what propelled him into the House Speaker's chair, the idea that he could vamp on camera, keep the attention of the nation focused on him, defy Presidents (starting with Bush the greater) and leave 'em laughing. Not all of 'em, but his people, his audience.

It's just what every stand-up comic does. The secret to a stand-up's success is finding his people and cultivating that audience. Jeff Foxworthy never appeared on Def Comedy Jam. Dave Chappelle was not part of the Blue Collar Comedy Tour.

Your audience can be very narrow, or it can be very broad, like that of Russell Peters. Its devotion could be an inch thick or a mile deep. You can fly across the sky like a meteor, a la Bill Hicks (left, above), or you can hang in there and become a legend, like Bill Cosby.

Of course there's a less charitable way to put this.

Oil From Tires, Gold From Straw

I don't care much for penny stocks. But I have a problem, and if someone can solve it I won't begrudge where they come from.

These guys, who call themselves Green Envirotech Holdings, claim they can solve a big problem in my neighborhood.

Tires.

Every spring my neighbors and I go out hunting for old tires, and every year we find tons of them. Along the road, under viaducts, down in creek bottoms. Tires thrown around by guys who are selling tires to poor people and don't care for the expense of recycling them because they're poor themselves.

If you could turn tires into money, if the tires had value, then people wouldn't be going around stealing copper, they'd be grabbing these tires and making a semi-honest living.

Investors Candy: Dana on NRG and BBG

The Ugly Truth About Apple, China and Jobs

Those are really crummy jobs.

Politicians are all a-dither about the recent New York Times story concerning Apple's production in China, and how Steve Jobs told the Administration those jobs weren't coming back. And about how great Chinese logistics are.

But the jobs we are talking about are really crummy jobs.

Mass production, making stuff over-and-over by hand, is sucky work. Maybe it was good for your great-grandfather, who contrasted it with slaving on a farm trying to bring in a crop. And it was. But compared with any modern job, any job you'd do or want to have your kids doing, it's a crummy, crummy jobs.

Fact is, America's future does not lie with mass production, but with mass customization. It lies with makers who can produce single parts on computers and have them created on 3D printers. It lies in design, in prototyping, in the creation of high-value rather than low-value products.

Do you want  your kids doing grunt work in a factory? Want them living in dorms, on-call 24-7, working 12-hour shifts 7 days a week for a few dollars per day? You want them doing rote work that is so soul-destroying that suicide looks like a great solution?

I didn't think so.

What you want is for your kids to create the robotic factories that eliminate the need for all that hand-work. What you want is for your kids to be designing the software that leads to creation of a Moon base. What you want is for your kids to be in jobs where they can think different, not in jobs where they don't think.

And you know what. Every worker at Foxconn wants that for their kids, too.

Political Tectonics

Think of this as Volume 16, Number 3 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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Want to know the historical importance of the SOPA-PIPA fight? To learn that you must travel deep underground, to the world of political tectonics and what drives us.

Economically, what happened in the early years of the Nixon Era was that two key economic interests divided.

Manufacturing, mainly based in the Midwest, took political power throughout the Kennedy and Johnson years. Technology, companies like Intel and Hewlett-Packard, both based in California, gravitated toward the Republicans. And it was this divide within the business community that ultimately proved crucial, as the New Deal moat was destroyed in the 1972 Nixon landslide, validating the creation of “fiat currency” to solve tech's natural tendency toward deflation.

This sort of thing had happened before. Each one of our political crises began when one industry seized power and, in time, other industries objected. It was the final triumph of the new economic order, the validation of a new set of myths and values in succeeding elections, that eventually resulted in each New Thesis, each new Age of American politics.

From the Age of Jackson to that of Lincoln. From the Age of Lincoln to that of Teddy Roosevelt. From the Progressive Era to the New Deal. From the New Deal to the Nixon Era.

From the Nixon Era to the Obama Era. It's not the leaders who create their times. They just ride the waves and take the credit. It's economic change that drives the train, under the surface.

Internet Made Me a Video Star

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A few weeks ago I was contacted by Curtis Hollister of Investor Candy (the fellow on the left above.)

Curtis had seen my work at Seeking Alpha and was launching a video service for investors. Would I be interested in helping out?

Before I knew it, I'd turned the back bedroom into a rudimentary studio, complete with a green screen I hung over a bed and a fancy video camera Curtis sent me. He asked me to look into First Solar, which I did, then scheduled a GotoMeeting call.

The result is what you see above. He sat in his office and asked questions. I sat in my office and answered them. Same thing I've done for decades, only in reverse. He used a little technical magic to transform my bedroom into the Atlanta skyline and voila.

Let me know what y'all think. Has the Internet made me a video star or should I stick to my typing?

What Tebowism Really Tells Us

Think of this as Volume 16, Number 2 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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It's one of the ironies of our political cycles that a decisive turn is often followed by the other side's capture of the culture.

Think about it.

1. The South and the “Lost Cause” were culturally ascendant after the Civil War, even as the grave closed over the Confederacy.

2. Populist-fueled racism became a popular cultural expression after progressives captured the flag in the 1890s. See “The Birth of a Nation” for a fine example from that era.

3. The 1930s and 1940s saw a very conservative culture, which you can see in the movies of that era. I might point specifically to the Andy Hardy-Judy Garland movies for its truest expression.

4. The 1960s were all about the rise of Leftist culture. Funny how the sideburns suddenly start growing across the establishment after Nixon won in 1972.

Today I see another turn happening all around me. My kids are a lot more like those of the 1930s than they're like me. Even the “Occupy Wall Street” movement was well-behaved. It was the police over-reaction to peaceful protest that said otherwise. And did you notice the lack of reaction to that over-reaction? In a cultural sense, we're very respectful of authority these days.

So the best sign of the left's rising to a semi-permanent state of power in America is probably the rise of Tim Tebow.

Tebow is the ultimate expression of muscular Christianity. He is a man who lives his values, and they're values that even Rick Santorum would approve of. He defies our expectations in a throwback sort of way, a run-first quarterback throwing himself into the line. Sort of like a Republican Muhammad Ali, and I'm very afraid he may wind up the same way, a victim of repeated head trauma, old before his time.

I'm seeing similar expressions across the culture. What are the biggest movie hits of the last few years? Why, it's the “Twilight” franchise, in which a young girl swoons before a strong, masculine presence. Our most popular musicians, like Jay Z and Bruno Mars, are self-consciously consumer products, careerist, careful in how they live, careful with their money.

What I find most fascinating about the Tea Party is not how reactionary it's been, but how ineffective. The Congress and governors elected by that movement in 2010 are now almost universally mocked, much as hippies were derided 40 years ago. We don't need Spiro Agnew, they write their own lines. Here's one – will someone get this guy a joint and a paisley flag, please?

It makes sense. Culture tends to act best in opposition. If we don't have anything to be angry about, we really do stagnate.

When Will Small Investors Know They Are Wanted?

Ever since the dot-coms, and then the Towers, came down, over a decade ago, corporations have given small investors the back of their hand.

(As always when I use The Monopoly Man as an illustration, I point you to the fine game produced by Hasbro.)

Hedge funds have arisen that squeeze out small profits on fast action, play with leverage, and take control of trends like social networking. Small players are not invited. This is how the 1% of the 1%, and the 1% of that group, kept their lead growing over the rest.

The result is that the best returns aren't available to you or me. Popular stocks cost hundreds of dollars (in the case of Berkshire Hathaway BRK.A many thousands of dollars) per share. Entire booms (like social networking) start to bust before small investors can even get a taste. Instead we get the investment equivalent of mush, ETFs and mutual funds with limited risk but very limited return.

I think this is about to change.

One reason is the social networking crash, which has mostly happened out of sight and burned some very big checking accounts. With smart money getting suspicious, investment bankers are going to look for investment where they can get it.

Another reason is political. The atmospherics of giving all the best opportunities to a handful of people are bad. Spreading things out, even out toward the 5% of Americans with “mad money” to invest, is almost populist.

A third reason is technological. The Internet makes it very, very easy for small investors to move money around. Lots of people with small accounts still means a lot of money. Sites like Seeking Alpha give small investors the courage to play.