There’s no order to this post, so enjoy my reflections on broader trends that are affecting the markets.
- Corn-based ethanol is costly, and a mistake for our government to subsidize it, when we could buy sugar-based ethanol from Brazil. I’m no environmentalist, but even I can see the advantages of eliminating sugar subsidies and quotas here in the US. The only people hurt are some rich farmers that bribe Washington to keep the subsidies. With a little encouragement from the US, Brazil could adopt more environmentally friendly harvesting techniques, while not kicking up costs that much. Such a deal, better economics, and better for the environment.
- Stories like this always make me skeptical. Remember cold fusion? Maye there is a real innovation here that produces more energy than it consumes on net. I wouldn’t bet on it, though.
- Since the creation of the Earth, farming has been the dominant occupation of man, until now. More people are employed outside of farming, than inside it. This is not big news, except to confirm that what happened to the developed world 80 years ago is happening to the world as a whole now.
- ETFs are not open end mutual funds, where there is one price struck per day for liquidity. For small ETFs, the bid-ask spread can be quite wide on small funds. This shouldn’t be too surprising; the same is true of any small stock. If there is demand for an ETF concept, more units will get created as people bid for them, and the bid-ask spread will narrow.
- Rationality in markets is misunderstood. You can bring bright people to manage money, and they will still in aggregate become prey to the speculative aspects of the markets. Some will resist it, but most won’t. It is not a question of intelligence, but of discipline.
- Give Hersh Shefrin some credit. I think that behavioral finance is a much richer explanation of the markets than modern portfolio theory. MPT exists because it is easily mathematically tractable, which allow professors to publish, and not because it is a correct description of reality.
- It’s tough to be an orphan company. Much as I like investing in companies that have no analyst coverage, if they are cheap enough, when a company loses analyst coverage, the stock price typically declines, and often, the company disappears within a few years. Perhaps the lack of analyst coverage is a proxy for the demand for a company to be public, rather than private.
- Here’s a good article on why the market crashed in October of 1987. My quick summary for why it happened was that bonds were more attractive relative to stocks, and dynamic hedging left the market unstable, as many player were willing to sell on big down days.
- Will junk defaults triple from 2007 to 2008? Seems reasonable to me; given all of the CCC and single-B issuance over the last few years, the companies that have recently issued bonds seem weak to me.
- Can Thompson-Reuters give Bloomberg a run for its money? My guess would be no. Bloomberg is a much richer system, and for those that need that level of complexity, that is where you can get it with great ease.
Enough for the evening. More to come tomorrow.
Wouldn’t it be something it they had to start pumping the saltwater _out_ of the Gwahar field? Wishful thinking, of course.
The new blog looks great, too.
You wrote: “Remember cold fusion?” You appear to be dismissing the research. What, exactly, do you remember about it? How many scientific papers about cold fusion have you read?
Cold fusion was replicated by researchers at China Lake, SRI, Texas A&M, Los Alamos, Mitsubishi Res. Center, BARC Bombay, Tsinghua U. and over a hundred other world-class laboratories. Hundreds of positive, peer-reviewed papers on cold fusion were published in mainstream journals.
You can find over 500 full text reprints of scientific papers from all of the institutions listed above, and many others, at our web site:
http://lenr-canr.org/
I suggest you review these papers before commenting on this research, or dismissing it.
I know nothing about the “salt water as fuel” claim, although I note that it appears to violate the laws of thermodynamics. Cold fusion does not violate those laws. On the contrary, it is predicated on them.
– Jed Rothwell
Librarian, LENR-CANR.org
Rustum Roy is not likely to be easily fooled by this if it’s phony. The notion that this might work is not in the same league with cold fusion – it’s not unreasonable that microwaves could dissociate water under the right conditions, nor that hydrogen released could be ignited. The important question is, as noted, what’s the overall efficiency of the process?
You are right to be skeptical. If the saltwater thing actually worked it would violate the first law of thermodynamics. According to Wikipedia, that law, the law of conservation,”has become the most secure of all basic laws of science. At present, it is unquestioned.”
Tom Fisher wrote:
“The notion that this might work is not in the same league with cold fusion . . .”
Correct. Cold fusion has replicated in hundreds of world-class labs at high signal to noise ratios, so there is not the slightest doubt that it exists. Also, cold fusion does not violate the conservation of energy. This claim has not been replicated and it does apparently violate this law.
“. . . it?s not unreasonable that microwaves could dissociate water under the right conditions, nor that hydrogen released could be ignited.”
This scenario is not a bit unreasonable but it would produce any net energy. It would take as much energy to drive the microwave generator as you get from burning the hydrogen, plus overhead. Cold fusion produces much more energy out than the input. In some cases there is no input; the reaction is “fully ignited” or “self-sustaining” like a flame. The reaction consumes deuterium and it produces helium in the same ratio to the energy as plasma fusion does (1 milligram of helium per 345 megajoules).
– Jed Rothwell
Librarian, LENR-CANR.org
Excuse me, I meant to write:
“This scenario is not a bit unreasonable but it would NOT produce any net energy.” This is often called “excess energy” meaning output minus input.
Note that “conservation of energy” and the “first law of thermodynamics” mean the same thing in this context. Cold fusion calorimetry is predicted on the first and second laws of thermodynamics. The only way to prove that cold fusion does NOT exist would be to show that these laws are in error. You would also have to prove that autoradiographs, mass spectrometers, gamma and neutron detectors and a host of other instrument types do not work in experiments repeated hundreds of times in many different laboratories.
– Jed Rothwell
Librarian, LENR-CANR.org
Cold fusion is not viable as a productive technology at present. I think (not asking David) the comment was really an observation about the hooplah about “cold fusion changing the world”. Since you represent a coordinated attempt to advocate more research; is their a lack of funding to continue research? Why would I care as an individual at this point? I think it is worthwhile to allocate funds to some blue sky ideas; but why is this one worthy? I’m linking to your site to learn more.
Paul wrote:
“Cold fusion is not viable as a productive technology at present.”
That’s right. Furthermore, it is difficult to predict if or when it ever will become a practical technology.
The situation is complicated. Some experts feel it will take a theoretical breakthrough, but others say that technology is sometimes developed even when a theory is lacking. A handful of researchers think they have developed a good model, if not a theory. This year, two of them have produced reactions with unprecedented control, so perhaps they are right. We will have to see if these techniques can be replicated and scaled up.
“I think (not asking David) the comment was really an observation about the hooplah about ‘cold fusion changing the world.'”
In my opinion this hooplah was justified. Cold fusion was never a sure thing, but neither was uranium fission or high temperature superconductivity (HTSC) when they were first discovered. Fission now supplies a large fraction of our energy. HTSC has not been commercialized yet but it would be foolish to write it off. If cold fusion can be controlled and scaled up, I think it will change the world.
Not to blow my own horn, but I wrote an on-line e-book book about how it might change the world, if it can be made practical. I included specific technical details about how cold fusion works and how it might be utilized. These are educated guesses, but they were vetted by experts. See:
http://lenr-canr.org/BookBlurb.htm
This book was recommended by Arthur C. Clarke and others. I also assisted Clarke with the revised version of “Profiles of the Future” which contains a lot of new information about cold fusion, and which I recommend.
“Since you represent a coordinated attempt to advocate more research; is there a lack of funding to continue research?”
Yes. Most research is done on a shoestring. Experiments cost anywhere from $100,000 to $20 million, and they require a well-stocked laboratory, so very few are underway. Most researchers are elderly university professors, either retired or dead. There is little funding because of the harsh opposition from rival academic researchers who believe the reaction is impossible and the experiments are mistaken, or fraudulent. Many (but by no means all) peer-reviewed journals reject papers without review. Hundreds of attacks against the researchers have been published by the Scientific American, the Washington Post, Time magazine and other mainstream media. This has given the public the impression that the results were never replicated, and that the researchers are frauds or lunatics. (I doubt there is any opposition from fossil fuel companies or anything like that.)
“Why would I care as an individual at this point?”
Well, you should care because cold fusion might help solve many problems, and because it is a distressing case of the suppression of academic freedom.
Beyond that . . . I know little about investing, but I would think twice about putting a large fraction of my money into oil, or wind turbines for that matter. On the other hand, I do not know of any corporation or individual researcher who I think is likely to make a killing. First, because it is fundamental physics research, and you cannot patent a force of nature. Second, because most researchers work for the Italian National Nuclear laboratories or the Japanese National Universities and National Synchrotron Lab, or the U.S. Navy. They are government employees, like the people who developed fission and the Internet.
“I think it is worthwhile to allocate funds to some blue sky ideas; but why is this one worthy?”
Because it has been widely replicated at high signal-to-noise ratios by world-class laboratories, and because the temperatures and power densities achieved on a small scale rival those of a conventional fission reactor uranium core. The energy production per gram of fuel in some cases has been hundreds of thousands of times more than any chemical reaction can produce, and there is every indication that it can be millions of times greater.
There are no guarantees. There are countless technical problems. But on the whole it is promising, and worth investing a few million dollars per year, in my opinion.
“I?m linking to your site to learn more.”
Good! That’s the thing to do. Try not to jump to conclusions. This is exceedingly complex, poorly understood research, still in the earliest stages of development. That may seem odd after 18 years, but you have to realize that measured in man-hours and money, researchers in plasma fusion, oil and other mainstream energy research spend more money before breakfast than cold fusion was ever allocated.
– Jed Rothwell
Librarian, LENR-CANR.org
thank you for sharing your insights Jed. I never thought we would have a discussion about cold fusion on David’ blog! I like fossil fuel companies though and for the time being oil/nat gas/coal are solutions to several decades of energy needs. Look at oil service; they can do business with the NOCs. David has excellent commentary regarding this (and othe rissues) here and on Real Money.