I was just sifting through some posts at Naked Capitalism when I spotted this post by Randy Wray — and this set-up paragraph from Yves Smith:
Readers may note that Wray cites the cost of the US bailout of the financial crisis as $29 trillion. I’ve never seen a figure like that (the highest estimate I’ve seen was from SIGTARP, which set the “theoretical maximum” at $23 trillion, and that figure was widely criticized. Barry Ritholtz has kept tab over time, and his tally has been in the $10-$11 trillion range). But this estimate is not core to his argument.
ACK! $29 trillion?!?! Here's Barry Ritholtz in 2009, sharing a graphic that shows how the bailouts, adding up to about $15 trillion, stacked up against other major historical expenditures. And above, I've embedded a PBS broadcast on a Bloomberg report about the total cost being almost $13 trillion. And CNN built a "Bailout Tracker" that shows $11 trillion in commitments (but only $3 trillion invested).
I nearly spit my coffee out when I saw this brief CNBC segment on whether the government should be acting like a venture capitalist when it comes to startup energy companies — like bankrupt, scandalized Solyndra. Eamon Javers strikes me as a good reporter, but he zipped through the question and gave me the impression that CNBC hasn't fully figured out what the Department of Energy is trying to do in the renewable energy industry
The DOE just approved two new solar-related loan guarantees, of the sort that Solyndra received (Solyndra got $535 million and drew on $527 of it before declaring bankruptcy). Mesquite Solar got $337 million and Tonopah received $737 — both as the DOE's program was officially winding down.
Both are also doing some fairly out-there stuff. The Tonopah project, according to the DOE, is a "110 megawatt concentrating solar power tower generating facility with molten salt as the primary heat transfer and storage medium. It will be the first of its kind in the United States and the tallest molten salt tower in the world." Here's a picture of what it might look like and a rundown of how it will work.
This chart is from a lengthy analysis of government energy subsidies by Nancy Pfund and Ben Healey, published by DBL Investors. You don't have to a be math genius to unpack its message (which is backed up by numerous other charts and graphs in the report): renewable energy has been subsidized to a far lesser degree than oil and gas, nuclear, and even biofuels.
Over the period of time it's been subsidized, the renewables sector has cost about $395 million per year. Nukes, subsided for a much longer period, averaged $3.57 billion. And oil and gas averaged $4.91 billion.
Before you get all shocked at the unfairness of it all, remember that oil and gas have always been so important to the economy that subsidizing both at such high historic levels made sense. The cheap energy provided built an economy measured in the multi-trillions.
Calpers, the giant California state pension fund currently valued at $219 billion, is in a difficult position. This is from a Bloomberg story about the fund struggling to hit its 7.75 percent expected yearly return for 2010:
“That’s going to be tough this year and maybe for the next few years,” Calpers Chief Investment Officer Joe Dear said in a Bloomberg Television interview today. “This low-return environment is structurally driven, and there’s not a lot of policy to move it.”
In fact, it could be tougher than Dear is letting on. Calpers is only 70 percent funded, according to Bloomberg. That doesn't mean the fund can't pay out benefits. But it does mean that there's a mismatch between how much it has and how many employees are and will be relying on it. Calpers was fully funded in 2007, but the financial crisis has been hard on it.
Early jobless-claim numbers for September surprise forecasters. But it could all be a cruel ruse by the economy: "'Apart from what might be an anomaly, the underlying trend in the labor force is still disappointing,” said Sean Incremona, a senior economist at 4Cast Inc. in New York. “There is a lot of economic uncertainty weighing on the broader economy.'" (BizWeek)
Could one person out of every 10 — the starry-eyed optimist — be right? Talk about fighting the current: "According to a Field Poll released Tuesday, 91% of California voters say the Golden State's economy is experiencing 'bad times.' It’s the third year in a row that more than 90% of voters have depicted the state's economy in a negative light." (LAT)
Business Insider's Henry Blodget does a little startup standup as the Great Aggregation Debate heats up. Just a whiff of paranoia entering the picture, however. (BI)