Weaker than expected earnings and economic data prompted the markets to reverse course, after opening the day higher on optimism over a Greek deal. The S&P/Case Shiller’s 20-city composite index showed a 1.3 percent drop in home prices last November, a bigger decline than economists expected.
Nearly two years after the worst accidental offshore oil spill in the history of the energy industry, some of the biggest companies in the world are busy pointing their legal fingers at one another in court over who has to pay what in claims, damages and fines over the deadly Deepwater Horizon oil spill. A federal judge this week ruled that BP is still obligated to a clause in its contract with Transocean that would protect the rig owner from damages related to the spill. That means BP still has to shell out money to settle claims filed by those along the southern U.S. coast impacted by the spill. BP, meanwhile, is suing Halliburton, something Halliburton said was ridiculous. If the legal mess over Chevron’s case involving Ecuador is any indication, former BP boss Tony Hayward will be pushing 80 before this gets settled.
Oil gushed from the Macondo well thousands of feet below the surface for most of the summer of 2010 before crews were finally able to control the spill. Fishing lanes were closed and the coastal tourism sector, still recovering from Hurricane Katrina, suffered dearly. Eleven rig workers were killed.
A federal report determined a faulty cement barrier was at least one of the underlying causes of the accident. In October, the government outlined seven different violations for operator BP, four for rig-owner Transocean and four for Halliburton, which worked on the cement barrier. BP sued Halliburton, which said it was looking forward to court.
Ecuadorian and U.S. courts were involved in a case that more or less started in the 1970s, depending on which part you examine, when Chevron was accused of dumping billions of gallons of untreated wastewater into the rainforest. They even made a movie out of it! Both sides are locked in a legal mess that is still in some lower court somewhere hung up on who knows what. While that’s the first time an indigenous group managed to sue a giant corporation like Chevron, some legal aspects of the case that began some 40 years ago are still locked in court somewhere and there’s no end in sight.
During federal investigations into the 2010 oil spill, all three companies collectively blamed each other for the disaster that prompted Hayward to complain he wanted his life back. BP is unlikely to abandon trying to spread the financial liability anytime soon. If 30,000 Ecuadorians backed by the slick and oh-so persistent Amazon Watch can keep Chevron tied up in court for this long, one can only imagine how long the Deepwater Horizon mess will linger in the courts.
And where’s BP now? Why it’s busy planning to drill in the Gulf of Mexico, that’s where.
Source: http://oilprice.com/Energy/
By. Daniel J. Graeber of Oilprice.com
Pep Boys (NYSE:PBY) announced that it has enetered into a definitive merger agreement which it will be acquired by one of the nation’s leafing investment firms, The Gores Group. Total enterprise value of the transaction is an estimated $1 billion.Under the terms of the merger agreement, The Gores Group will acquire all the outstanding common shares of Pep Boys for $15.00 per share in cash. This represents a premium of 24% percent over Pep Boys’ closing price of $12.08 on January 27, 2012 and a premium of 36% percent over Pep Boys’ volume weighted average closing price over the last 30 trading days. The transaction is currently expected to close in the second fiscal quarter of 2012.Following completion of the transaction, Pep Boys will become a privately held company and its stock will no longer trade on the New York Stock Exchange. Pep Boys noted that, in light of the proposed transaction, it will not host a conference call to discuss financial results for the 2011 fiscal year, but intends to file its year-end results with the SEC.PEP Boys is currently above its 50-day moving average (MA) of $11.09 and above its 200-day of $11.22.
As the saying goes, there are many possible reasons for an insider to sell as tock, but only one reason to buy — they expect to make money. So let’s look at two noteworthy recent insider buys.
Limited Brands Incorporated (LTD) announced its quarterly dividend of 25 cents per share, an increase of about 25% over its prior dividend in November of 20 cents.. The regular quarterly dividend will be payable on March 9, 2012, to shareholders of record at the close of business on Feb.
The December unemployment rate for the 17-member countries comprising the Eurozone rose to the highest level since the Euro was introduced in 1999. For the month of December, the rate for the entire region rose to 10.4 percent after the November result was similarly revised upwards one tenth of a percent from the originally-reported 10.3 percent.
A total of 16.5 million people across the Eurozone are now out of work. This is an increase of three quarters of a million in the past year alone. But the pain is not being felt equally amongst all Eurozone nations.
Greece and Spain recorded the greatest increase in unemployment over the past year. At 22.9 percent, Spain had the highest unemployment rate for the entire area with Greece not far behind at just over 19 percent. Portugal watched helplessly as its unemployment rate continued to climb reaching 13.6 in December.
Comparing the results of these southern countries with the northern jurisdictions reveals the gap between the north and the south. In Germany, for instance, December’s unemployment rate actually fell more than expected to 6.7 percent – the lowest since German was reunited. Meanwhile, Austria and the Netherlands continued to record the lowest Eurozone unemployment at just 4.1 and 4.9 percent respectively.
Unemployment to Increase in Some Eurozone Countries
Looking ahead to the coming year and beyond, there is every likelihood that the situation will actually worsen. As even the most casual observer knows, the Greek government is presently under intense pressure to implement the infamous “austerity” measures to address the country’s widening deficit.
The massive spending cuts targeted to meet the goal of ultimately eliminating the deficit will require Greek authorities to eradicate a significant number of government jobs. Other countries including Spain, Portugal, and even Italy will be forced – to some degree at least – to follow the same agenda in order to get a handle on overall spending.
Widespread job losses will not be restricted to just the government, however; the private sector too will be forced to reduce costs as companies struggle with falling sales. In the face of the continued uncertainty and growing fears of recession, companies will postpone or even cancel all but the most essential new projects, delaying new hiring accordingly.
Again, it will be the southern countries that will feel the effects of this most keenly.
Article by forexblog.oanda.com
Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock,presumably the only reason they would use their hard-earned dollars to make a purchase, is that they expect to make money. Today we look at two noteworthy recent insider buys.
In trading on Tuesday, water utilities shares were relative leaders, up on the day by about 1.3%. Leading the group were shares of Pure Cycle (PCYO), up about 9.2% and shares of American States Water (AWR) up about 1.9% on the day.
Jan. 31 (Bloomberg) — Mei Gao, a portfolio manager at Fore Advisors, talks about the outlook for European and Japanese debt markets and investment strategy. She speaks with Stephanie Ruhle on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)
Solar energy detractors point to the fact that it can’t compete without “huge” government subsidies. And up until now, I couldn’t argue to the contrary.
But very soon, those detractors will likely be eating their words. I’ve said it many times in the past: Technology marches on, and the cost of manufacturing will come down.
Well the cost of manufacturing solar isn’t just coming down; it’s dropping through the floor. By the end of this year, solar will be so cheap it will compete with just about any other form of generation. It already does in some places, and at commercial scale levels. The best part? It will do it without subsidies.
You see, solar panel prices are about to cross a tipping point. It’s all due to the drop in price of a solar module’s most crucial ingredient: polysilicon.
The Polysilicon House of Cards
Polysilicon prices have collapsed 90% in the last five years. That translates directly into lower module costs, lower panel prices and ultimately into a lower installed cost per watt.
How did this happen? Way back in 2006, there was a run on polysilicon. It turns out it’s the same material used to make integrated circuits. But all of a sudden, the solar industry was booming, and competing for what was then a limited supply.
Its use for solar was rising rapidly, and 2006 was the first year that 50% of all polysilicon went into the manufacture of modules for solar panels. And panel manufacturers were clamoring for even more.
Polysilicon makers were laughing all the way to the bank, and then some. They essentially were an oligopoly, and were earning upwards of 40% margins on their product, according to a recent research report published by GTM Research.
Prices just kept rising along with demand, and by 2008 the shortage was so severe, polysilicon was selling for over $400 per kilogram on the spot market. Margins had risen to 70%.
Naturally, this lured new players into the market, and led existing makers to expand manufacturing capacity. But they overestimated how much was really going to be needed.
By 2011, much of this additional capacity began to come online, and polysilicon prices started falling. By March of 2011, the spot price had dropped to $80 per kilogram, and by this past December, it was all the way down to $30 per kilo.
This incredibly low spot price was all the leverage customers with long-term contracts needed to renegotiate lower prices.
GTM Research predicts that in 2012, these declining silicon prices will lead to even lower module prices. At the beginning of 2011, module prices were $1.80 per watt. By the end of 2011, they were halved to $0.90 per watt.
Closing in on Grid Parity
This year, GTM expects module prices to breach the $0.70-per-watt barrier and continue to head south. Of course, with other manufacturing costs and installation being relatively fixed, lower raw material means lower panel prices. And $0.70 per watt is below the magic $1.00-per-watt level that’s widely viewed as “grid parity” for solar.
That’s the point where it makes just as much sense to use solar as any other form of generation.
The system I installed at my farm is 10.08 kilowatts (KW). Over its 25-year lifetime, it’s expected to produce an average of 12,000 to 18,000 kilowatt-hours (kWh) per year.
I’m leasing my system for five years, and will then purchase it. My total all-in cost is about $27,000. (Since I’m leasing the system, I don’t receive any government subsidies or tax breaks.)
Let’s assume that the system produces the minimum amount per year, 12,000 kWh.
Multiplying by 25 and then dividing by the cost of the system, we come up with $0.08 per kWh. My current electricity from the grid operator costs $0.14 per kWh.
That’s almost a 50% savings. If I produce even more, my savings will be even higher.
And this system has panels that were manufactured in 2011. Panels made this year will be even cheaper, and so will the all-in cost.
Misinformation and Black Eyes
So what’s keeping solar from being widely adopted? Lack of information, for one…
The industry got quite a black eye over the Solyndra deal.
GTM Research Senior Analyst, Brett Prior, believes the industry will continue to grow at 10% to 20% per year for the foreseeable future. He had this to say about the polysilicon market today:
“After a half-decade of silicon demand outstripping supply, the aggressive expansion plans finally overshot.
“This supply/demand imbalance will push producers to lower contract prices closer to the level of manufacturing costs at $20 per kilogram, and will force higher-cost manufacturers to exit the industry.
“The end result is that the current roster of over 170 polysilicon manufacturers and startups will likely be winnowed down to a dozen survivors by the end of decade.”
I believe that as prices continue to drop, solar will continue to gain in popularity.
Big panel manufacturers like U.S.-based SunPower Corporation (Nasdaq: SPWR) will be around when the dust settles. They currently make the most efficient (19%) commercially available panels in the world. The stock is way off its highs of a year ago, but is up a healthy 22% since the beginning of the year.
So is it solar boom time? I don’t have a crystal ball, but with module prices continuing to drop, it becomes more attractive every day. That’s good news for panel manufacturers, as they’ll continue to improve as volumes ramp up. Investors certainly won’t find them any cheaper than they are right now.
Good Investing,
David Fessler
Article by Investment U
