Global
Briefing
Alert - Danger Signals in US Economy Could Spell Market Collapse - The linked forecast from a behavioral science trader gets additional support from the recent report of the St. Louis Fed, which shows S&P 500 stock prices way outperforming their earnings. Earnings are collapsing even as stock prices are bolstered by Federal Reserve intervention and banking system bailouts. The graph is quite terrifying. We need to focus on production: food, sustainable infrastructure and industry, craft. An economy based on real estate speculation and financial parasitism cannot survive. Take a break in your Victory Garden.
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Hat tip to top markets blog Zero Hedge
Mother Media Award - Best Green Business Magazine: Environmental Finance - Astonishingly good coverage of global policy and markets related to sustainability. Eye-opening details on the advanced ecological (carbon) accounting systems of Europe and Asia. Clear evidence that moving externalities such as pollution onto the balance sheet creates improvements for civilization. Get your free sample copy at the website.
NATO Stealth Takeover of UN - Global Research - An excellent report on the subversion of the international community. The UN General Assembly tends to send the right signal. The Security Council, an autocratic politburo, should be abolished.
New Bilderberg Book by Daniel Estulin a bestseller in 48 Languages - Estulin, Jim Tucker and Alex Jones provide the only coverage of this international elitist policy making outfit.
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Financial Permaculture, Slow Money and Investor's Circle Conferences Showcase Sustainable Investment - Woody Tasch and the Slow Money Alliance are coming to Santa Fe. Catherine Austin Fitts of Solari Circle Fame is leading the September Financial Permaculture event in Tennessee and the Investors Circle event is in Washington, DC.
Editorial:
Mother
Media Relaunches with Focus on Synergy Between Socially Responsible Investment
and Public Policy
by Leland
Lehrman
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It's been a long time since the last issue, and there's a lot to tell you about. Back in March, Mother's Arms (the direct action, lobbying and elections branch of Mother Media) was working aggressively at the New Mexico Legislature. Our focus was implementation of renewable energy payments, commercial wind facility siting guidelines and the allocation of the State's Investment Funds to New Mexico's non-discretionary infrastructure (food, water, energy, healthcare). Following a successful session where we passed two of four bills, a major opportunity in socially responsible investing (SRI) opened up and swallowed us. Although the emerging hedge fund, Teucer Capital, must follow strict SEC guidelines regarding publicity and investor accreditation, interested parties may contact me for background information about the venture.
From a holistic perspective, developing market-based environmental policy approaches using socially reponsible criteria is both necessary and good. The "market," loosely defined as the economic activity of human beings, determines the bulk of all environmental impact, and although regulation plays a necessary part, the market still calls many of the shots. In the current worldwide investment picture, sustainable infrastructure companies have and will soon get additional regulatory support as externalities such as war and pollution get brought onto the balance sheet. But we need to identify additional incentives to move capital out of war and pollution and into peace and sustainability. At a large scale, for institutional investors, this involves risk mitigation.
Risk is measured in the marketplace as a function of rates of return. Long-term AAA US Treasuries will get you something like 3% interest, Municipal Bonds 4%, Corporate Bonds 8% and Junk Bonds 15%. In the capital markets, a typical portfolio has returned about 7-8% annually, much less recently. Hedge funds using quantitative risk management tools can and do better.
The socially
responsible marketplace is usually quoted at $2.7 Trillion, but these
investments are not usually in pure plays. SRI investors often limit their
focus to either pressuring established players into environmental responsibility
using shareholder proxy votes or to companies where sustainability is
at best a minor component of the business (around twenty percent or so
of revenues). Even this limited engagement is high risk, and the SRI sector
was hit even harder than the broader market in the recent market meltdown.
SRI Investment Managers such as First Affirmative Financial Network are
now aggressively looking at market-neutral strategies. These are strategies
that make money whether the market goes up or down. This is accomplished
by including short selling as well as traditional buy low, sell high investing.
Short sales make money by reversing the process: first they sell high,
then they buy low. The market-neutral combination is called long/short
equity.
Much of what I know from investing I learned from my father, who always
emphasized fundamentals-based, long-term buy side investing. So when my
partners at Teucer Capital introduced me to market-neutral strategy, I
had to spend some time figuring out how to incorporate social responsibility.
It didn't take long.
During the recent Legislative Session, it became clear to me that a company's stock and bond prices were major incentives with respect to its behavior. The light bulb went on when I realized that the market-based equivalent of environmental regulation is to target a company's stock price through timed short selling.
The general outlines of a market-neutral approach to socially responsible investment are as follows: When markets rise, invest in sustainable infrastructure and social responsibility. When they fall, sell short companies that profit from war and pollution.
If one can set up an automated trading system that reliably predicts market and specific stock trends, one can begin to reduce risk. Big investors focus on these types of strategies when determining whether a high yearly return (over 15%) is worth the risk. Remember, 15% interest is only available from junk bonds (high risk) in the fixed income world. Anything that offers better returns will have its risk management policies scrutinized carefully.
It is the promise of increasing the amount of investment available for peace and sustainability that keeps me focused on capital markets success. One can even imagine a scenario in which a company like Halliburton, the target of a global short-selling campaign, is rendered vulnerable to takeover by a socially responsible investment fund with deep pockets. As Halliburton's stock price is driven below a dollar, it would become possible to reconfigure it as a sustainable infrastructure company. Keep the Flame.
Legal: This editorial is for informational purposes only and is not intended as an offer or solicitation in regard to the purchase or sale of any security.
New
Mexico Briefing
Green Economy Update from Brendan Miller at Economic Development - Recent missive includes vital information for entrepreneurs and policy makers.
The Rocky Mountain Technology Alliance New Energy Conference is now broadcasting video of the conference. This was the most enlightening conference on the subject of energy that I have ever attended. Philosophical presentations from Geoffrey West of the Santa Fe Institute complemented hard science and economics panel discussions with world leaders in the field. I confess to being skeptical and concerned about national lab plans to create synfuel from "clean" coal using nuclear power. But New Mexico folk hero Dr. Arnold Leitner of SkyFuel dazzled our solar energy crowd with his insightful analysis of the need for solar thermal and its advantages over photovoltaics at utility scale. Other major players included Ice Energy, which levels peak load from air conditioning by creating ice with nighttime generated electricity. Xtreme Power has developed a 100MW electrochemical storage solution that could solve one of renewable energy's most significant problems: storing the energy from intermittent sources for later delivery. RMTA Director David Blivin did a great job as did the staff of Buffalo Thunder Resort.
Kokesh for Congress Exploratory Committee Launches Full Campaign Website, Event on Independence Day - Mother Media is working actively with this campaign. Although we respect and like Rep. Ben Ray Lujan and his father the Speaker of the NM House, Ben Ray has not shown a real commitment to peace, voting for the recent war funding bill. He has also failed to support Ron Paul's HR 1207 Audit the Fed bill which now has 224 co-sponsors from both parties, a majority. Looking forward to the July 4th event at the College of Santa Fe after the fireworks.
Green Fire Times Launches with stellar first two issues. Download the full magazine and check out the blog at greenfiretimes.com Although Mother Media is not as directly involved as it was when Leland Lehrman was editor of the Sun News, we have provided technical assistance for the development of the blog and social networking for Skip Whitson's new newspaper, Green Fire Times. A veteran of the New Mexico publishing industry for 40 years, Skip deserves hearty congratulations for another successful venture. Seth Roffman of Sustainable Santa Fe fame and graphic designer Anna Hansen have created the premiere environmental publication in New Mexico. The full text as well as advertising rates are available on the web.
Green Democrat and elder statesman David Bacon is considering a run for County Commission on a platform that includes making Santa Fe County the first carbon free county in the nation. His recent efforts to create a municipal power authority to develop a 100% renewable infrastructure are awe-inspiring. In order to really advance his ideas, and those of his estimable colleagues Mark Sardella and Bill Althouse, we'll just have to get him elected.
Permanent Fund Scandals Continue to Remind New Mexicans that Our Money is Being Diverted to Wall Street.
Mother Media
continues to cover the scandals emerging from the collapse in value of
New Mexico's Permanent Funds. We believe that there is a systemic issue
here, and that it would be wrong to single out individuals when the more
important goal is localizing the invesments. However, there are some concerns
that State Officials are misleading us when they claim that the third-party
placement agent scandal came out of nowhere. ABQ Journal reporter Thom
Cole recently reported that the Governor and the State Investment Council
all began the process of instituting aggressive third party placement
agent tracking following the scandal involving former State Treasurer
Vigil. Re
New Mexico Green Jobs Initiative Continues to Inspire
The Green Fire Times is the best place for information on the NM Green Jobs initiative run by Brendan Miller out of the State Economic Development department. But we do want to commend Brendan for doing an excellent job of getting community input and keeping us posted regarding state and national green economy initiatives.
When I ran into Brendan at Natural Grocers in Santa Fe, he said they are about to begin a series of public meetings around the state. Sign up here to get notified of place and time, as well as stay current on developments.
His recent bulletin was rich with info, including this exciting news: "Governor Bill Richardson today announced the construction of New Mexico's first solar thermal power plant, a 92 megawatt concentrating solar thermal facility in Santa Teresa. The Governor was joined at a press conference in Santa Fe by the three companies involved in the project- El Paso Electric, NRG Technologies, and eSolar. Work on the "New Mexico Suntower" project is scheduled to begin early next year."
Additional information in the bulletin related to sustainability grants and programs for municipalities and agricultural communities was very encouraging. Contact Brendan at (505) 827-0288
In order to allow Mother Media to remain politically active, we have chosen to remain a for profit organization. Although it is ironic that at least in America, only commercial outfits are politically unrestricted, we understand that at least theoretically, taxation gets you representation. Please consider paying $10.00 - $50.00 or more for a Mother Media subscription to enable continuing improvements.Mother's Arms, our registered lobbying and public policy outfit, is available for national and state level legislative initiatives or candidacies focused on renewable energy, equitable investment policy or peace and sustainability in general. We can provide references for our recent successes with Renewable Energy Payments, Commercial Wind Siting, and Election Reform (Paper Ballots).
Send money via paypal to leland@mothermedia.org or by check to
Leland Lehrman
163 Old Lamy Trail
Lamy, NM
87540Thanks for your support,
(505) 982-3609
