Tesla haters just lost another quiver in their dwindling arsenal. The upstart electric automaker has paid off the entirety of its Department of Energy loan — a whopping $451.8M — and did it nine years ahead of schedule.
“I would like to thank the Department of Energy and the members of Congress and their staffs that worked hard to create the [Advanced Technology Vehicle Manufacturing] program, and particularly the American taxpayer from whom these funds originate,” Tesla CEO and co-founder Elon Musk said in a statement. “I hope we did you proud.”
The repayment of the DoE loans comes just weeks after Tesla reported its first profit after 10 years in the car-making business. And thanks to a stock offering last week that raised $1 billion, it was able to repay the balance of its federal loans.
Tesla is also crowing about the fact that it’s the first American automaker that has fully paid back the feds through the Advanced Technology Vehicle Manufacturing (ATVM) program. But then again, Tesla didn’t take much compared to Ford ($5.9 billion) and Japanese automaker Nissan ($1.4 billion).
Please don’t try to convince me that the Republicans or the Koch Brothers don’t believe in Climate Change. Anywhere there is a new transportation route, there is profit. Anywhere they can drill for precious resources is definitely on their radar. The know Climate Change is real. Why they wish the True Believers to think otherwise is a matter of speculation.
(CNN) — The decision to grant permanent observer status to China and five other nations by the Arctic Council meeting in Sweden Wednesday reflects the heightened interest by some of the world’s most powerful economies in an area rich in oil, gas, minerals, fish and new transport possibilities.
For new observer nations China, Japan and South Korea, shorter shipping routes to Europe through Arctic waters could open up prospects of new energy supply options later this decade, such as liquefied natural gas (LNG) from Russia’s Yamal Peninsula in northwest Siberia.
It could also lessen China’s dependence on oil and gas shipped from the Middle East, which must pass through the Southeast Asian chokepoint of the Strait of Malacca. Allied to China’s interest of getting oil and gas delivered from new pipelines across Myanmar and Central Asia, the potential of the Arctic trade routes loom large in China’s strategic thinking.
Five years ago, the U.S. Geological Survey (USGS) described the vast Arctic continental shelf as potentially the “largest unexplored prospective area for petroleum remaining on Earth.” A new U.S. Arctic policy unveiled by the Obama administration last week cites that 2008 study, which estimated that about 13% of the world’s undiscovered oil and 30% of its undiscovered gas lies north of the Arctic Circle.
In a 2012 update, the USGS put the mean undiscovered estimate of recoverable oil in Russia’s Arctic provinces alone at 28 billion barrels, plus about 27 trillion cubic meters of gas.
Yet, in the fine print, the agency also effectively empowered a handful of select banks to continue controlling the $700 trillion derivatives market.
Big Banks Get Break in Rules to Limit Risks (May 15, 2013)
Just five banks hold more than 90 percent of all derivatives contracts, which allow companies to either speculate in the markets or protect against risk. This tight grip came under fire amid concerns that those banks overcharge some companies for derivatives and pose a systemic risk to the economy. Derivatives, for example, pushed the insurer American International Group to the brink of collapse before it was rescued by the government.
In the wake of the crisis, the commission initially planned to require hedge funds, asset managers and other corporations to contact at least five banks when seeking a price for a derivatives contract. The proposed requirement was intended to bolster competition among the banks.
Under pressure from the banks — and some firms that buy derivatives — the agency agreed to lower the requirement to two banks. In about 15 months, the standard will automatically rise to three banks, but the agency agreed to produce a study that could undermine that broader standard.
Under pressure from Wall Street lobbyists, federal regulators have agreed to soften a rule intended to rein in the banking industry’s domination of a risky market.
The changes to the rule, which will be announced on Thursday, could effectively empower a few big banks to continue controlling the derivatives market, a main culprit in the financial crisis.
The $700 trillion market for derivatives — contracts that derive their value from an underlying asset like a bond or an interest rate — allow companies to either speculate in the markets or protect against risk.
It is a lucrative business that, until now, has operated in the shadows of Wall Street rather than in the light of public exchanges. Just five banks hold more than 90 percent of all derivatives contracts.
Yet allowing such a large and important market to operate as a private club came under fire in 2008. Derivatives contracts pushed the insurance giant American International Group to the brink of collapse before it was rescued by the government.
More: Big Banks Get Break in Rules to Limit Risks
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You wouldn’t know it from the public debate in Washington, to put it mildly, but the federal deficit is actually falling and falling rapidly. According to new CBO projections out today, assuming no changes to current law, this year’s deficit will be $642 billion, the lowest since 2008. Chart after the jump …
That comes out to 4.0% of GDP compared to the high of 10.1% in 2009. CBO projects that it will fall to 2.1% by 2015.
North America Is Setting Off an Oil Supply Shock That Is Rippling Through the World - Business Insider
The boom in North American energy (primarily related to shale in the U.S. and oil sands in Canada) is one of the biggest stories in the global economy.
California is expected to see a budget surplus of about $4.5 billion thanks to a voter-approved tax increase, rising employment, increasing home prices, a surging stock market, and tens of billions in spending cuts.
Brown has indicated he plans to continue to cautiously restrain spending and pay down the state’s debt, though he also hopes to increase education funding for the underprivileged and expand the state’s Medicaid program.
GENEVA — Youth unemployment is likely to rise globally to 12.8 percent by 2018, wiping out gains made in the recent economic recovery, the U.N.’s labor office said Wednesday.
As of last year, some 12.4 percent of people aged 15 to 24 worldwide were unemployed, up from 12.3 percent in 2011, according to a report published by the International Labor Organization, which is based in Geneva.
In six of 10 developing countries surveyed, more than 60 percent of the young people were either unemployed or trapped in low-paying jobs, the report found.
“The waste of economic potential in developing countries is staggering,” said Sara Elder, a co-author of the report, who concluded that for many of them “a job does not necessarily equal a livelihood.”
Matthew Yglesias: slate.com
Japan’s broad stock market index is up more than 36 percent since Abe took office in late December. Household spending, housing starts, and industrial production all jumped the last time data were released. Japan is on the move again.
What’s the secret to its success? Mostly determination. Japan was marooned in a sea of macroeconomic despair. Short-term interest rates were at zero, the dread lower bound. But years of slow growth and failed fiscal stimulus programs had also saddled the country with the highest debt-to-GDP ratio on the planet. Conventional monetary policy was out of ammo, and running an even larger budget deficit with so much debt already on the books seemed insane. Abe decided, essentially, that when the macroeconomy gives you lemons, you make lemonade.
He brushed off the doubters and plunged ahead with new fiscal stimulus—reversing a big tax hike implemented by his predecessor—allaying doubts about debt sustainability by combining it with monetary stimulus. He fired the Bank of Japan’s president, and brought in an outsider. Haruhiko Kuroda promised to do “whatever we can do” to curb deflation and said he wanted to see the inflation rate rise. The stimulus program will be affordable because under Haruhiko the Bank of Japan is committed to printing as much money and buying as many bonds as are out there. At least until inflation rises from its longtime near-zero level up to 2 percent.
As a result, the yen has fallen about 12 percent so far this year making it easier for Japanese exporters to compete with rivals in South Korea, China, or elsewhere.
Even though that’s a lot, it would be wrong to see the Abenomics effect as simply currency depreciation. After all, the 36 percent increase in the value of Japanese stocks is much larger than the currency impact alone. And the data from household spending and home construction shows clearly that while a falling yen may be goosing Japanese exports, the stimulus program is having a broader effect on domestic demand as well. Everything, in other words, is going according to plan.
Fortunately austerity hasn’t been practiced with the same savagery in the US as it has in Europe with devastating consequences, and the Fed continues to wisely take stimulus measures which have helped keep the economy growing. There is little doubt, however, that the deep spending cuts forced by sequestration will slow the economy when millions of Americans are still out of work.