Posts Tagged ‘cost reduction’

Balance sheet wars – US solar companies vs. the Chinese government. Who’s going to win?

Warm solar-powered welcome to Financial Hippie, the long and the short of it…

Balance sheet wars – US solar companies vs. the Chinese government. Who’s going to win?

solar powerCourtesy of Financial Hippie

We all know the foot race that is going on in the solar industry – companies are trying to achieve the lowest per megawatt cost for an installed system. Until the next leapfrogging technology comes along, the most important factor to drive down cost is scale*. Here is where the US solar companies will have serious problems competing against the Chinese solar companies because the US solar companies lack cheap, indiscriminate access to capital like their Chinese cohorts.

Let’s take First Solar (FSLR) for example. FSLR is funded by private money. Even though the US government is offering tax incentives for installing solar projects, they are not however involved in the funding of the company in any way. Why would they? FSLR has one plant in the US, the rest of the plants are mostly in "low cost locations" – ie. Malaysia. Have you ever heard of the "United Solar Workers"? I would guess a few hundred out of the 3,500 FSLR employees are Americans. My point is… if they closed shop tomorrow, there will be plenty of companies to fill the supply void. I wonder if the Malaysian government has the capacity or the desire to step up and lend.

The Chinese solar manufacturers are a different story. Remember, the number one goal of the Chinese government is to maintain social stability. Suntech Power (STP) employs close to 10k employees by itself, and these are "high quality" jobs that are looked upon favorably by the Chinese Government. If I include all of STP’s peers in China, their upstream suppliers such as LDK Solar (LDK) and the downstream system installers, I would guess the Chinese solar industry employs probably a few hundred thousand people throughout the value chain.

Now let’s look at the banking relationships. Many of these loans are unsecured and covenant lite and represent roughly on average 25% of total capital. Top 3 Chinese solar related company by market capitalization and their respective government backers are:

  • Suntech Power (STP) : China Construction Bank,  Bank of Communication.
  • Yingli Green Energy (YGE) : Export-Import Bank of China, China Development Bank
  • LDK Solar (LDK) : China Construction Bank, China Development Bank, Bank of China, Agricultural Bank of


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Phil's Favorites

Global Investing: Here's the Message of Consumer "Overconfidence"

 

Global Investing: Here's the Message of Consumer "Overconfidence"
Bear markets tend to follow this particular sentiment Courtesy of Elliott Wave International

In many global regions, economies are flourishing.

For example, here are two headlines about the U.S.:

What America's Startup Boom Could Mean For The Economy (npr.com, June 29)
Inflation Rose in June as Economic Recovery Continues (WSJ, July 13)

The goings-on in the United Kingdom provide another example. Employers in the UK are hiring people at the highest rate in more than six years. Plus, business and consumer spending are climbing swiftly -- at the fastest clip in a quarter of a century.

So, it wasn't surprising to see this June 18 CNBC headline:

Morgan Stanley picks the global stocks set to ride Europe's expected...



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Zero Hedge

Scaled-Back Olympics Opening Ceremony Marred By Protests As Sponsors Flee

Courtesy of ZeroHedge View original post here.

The 2020(1) Summer Games officially commenced Friday in Tokyo where a scaled back opening ceremony went off without a hitch: it began with the Japanese flag being carried out by a group of children, before dancers representing traditional carpenters re-enacted the construction of traditional wooden dwellings common in Japan.

A wooden set of Olympic rings featured in the ceremony was reportedly constructed from the wood of trees planted in the summer of 1964, the last time Tokyo hosted the Games. Japan's emperor was on hand to officially open the Games a...



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Biotech/COVID-19

US is split between the vaccinated and unvaccinated - and deaths and hospitalizations reflect this divide

 

US is split between the vaccinated and unvaccinated – and deaths and hospitalizations reflect this divide

As coronavirus cases surge, unvaccinated people are accounting for nearly all hospitalizations and deaths. Fat Camera/E+ via Getty Images

Courtesy of Rodney E. Rohde, Texas State University and Ryan McNamara, University of North Carolina at Chapel Hill ...



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Chart School

Investing with Channels - Review

Courtesy of Read the Ticker

The US has a lot of debt, to sell more units of the debt to non US buyers the FED and Treasury must get the unit price of the debt down.

This video assumes a 'risk on' bullish bias into the Nov 2022 US mid terms. The bias assumes a US dollar trending down from it current high price of $93 on the DXY.






Chart 1 - US Dollar Channels


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Chart 2 - Ethereum/USD


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Digital Currencies

Coal-Based Bitcoin Mining Jumps In Kazakhstan Amid China's Ban

Courtesy of Charles Kennedy, OilPrice.com

Bitcoin mining continues to rely predominantly on electricity generated from fossil fuels despite the heightened attention to the climate toll of crypto mining.

Kazakhstan, where fossil fuels make up nearly all the energy mix, has seen its global share of Bitcoin mining surge in recent months, just ahead of a Chinese crackdown on the mining of the world’s most popular cryptocurrency.

The Chinese authorities’ crackdown on crypto mining saw more than 90 percent of China’s Bitcoin mining capacity ...



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Politics

New York defines illegal firearms use as a 'public nuisance' in bid to pierce gun industry's powerful liability shield

 

New York defines illegal firearms use as a ‘public nuisance’ in bid to pierce gun industry’s powerful liability shield

Illegal gun use is now a public nuisance in New York. AP Photo/Bebeto Matthews

Courtesy of Timothy D. Lytton, Georgia State University

Could calling the illegal use of firearms a “public nuisance” bring an end to the gun industry’s immunity from civil lawsuits? ...



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Promotions

Free Webinar Wednesday: July 7, 1:00 pm EST

 

Don't miss Phil's Webinar on July 7 at 1:00 pm EST. It's FREE and open to all who wish to join.

Click here: 

https://attendee.gotowebinar.com/register/6552545459443187211

Join us to learn Phil's trading tactics and strategies in real-time!

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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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