thebmax

I'm JJ's brother and an investor in Double so I'm a little bit biased but I believe reducing/eliminating AUM fees is a huge net positive for the world. The performance drag over long term that money managers charge is a tax on people's retirement savings. What Vanguard/Bogle did with Index funds was massive, and I think Double can be this generation's Vanguard. Professional and powerful money management tools with rock bottom/no AUM fees is a massive opportunity. Congratulations on the launch JJ and Mark!

I love the idea and vision but I think you are underestimating the benefits of a good name. I can’t pronounce Terusama, couldn’t remember it, and it would be hard to spell if heard. Also it doesn’t suggest what you do at all which is important in a name. A combo of simple words that allude to what you do make the best names IMO. Otherwise anything that can improved such a huge industry sounds like a great market to tackle.

Agreed. Fuck Benchmark. Travis makes each partner $1 billion personally and this is how they treat him? They should be blackballed by every great founder out there. I had respect for benchmark but not anymore. They are greedy assholes.

Without the solar ITC and wind PTC most projects wouldn't be feasible. I'm skeptical these will last past a major tax overhaul as planned this year. I don't think your view on oil prices is correct. Even if supply cuts work US shale producers will pick up any slack. And I don't agree with your long term take on electric cars. Gasoline cars are just better for anyone who actually needs their car. Electric is a luxury and not necessarily cheaper at current gas prices.

Not exactly how it works. The projects are leveraged off balance sheet with separate, often tax advantageous entities owning the panels in a complicated lease buyback structure. 'Losing money is a good thing' is not true if you understand time value of money and debt leveraging. I haven't done much research but Solar City is probably hurting now because Nevada renagged on gridnbuyback provisions and lots of other states are eliminating residential incentives and subsidies for solar.

Also although they were the first to do some of the complicated financing stuff, rooftop solar installation has turned into a very low margin business with lots of competition in most markets. It's not really groundbreaking stuff they are doing.

A real life Ayn Rand story.

That was what I was getting at ;). I had an old boss who used to call hydrocarbons 'Mother Nature's Battery'. Its almost a miracle when you think of it. Millions of years of solar energy stored in solid, liquid, and gas forms, available for the ingenuity of man to extract and use to power the marvels of the modern world.

For all the hate that hydrocarbons get they are probably the main reason most of us aren't still living a very primitive existence.

Not questioning whether innovation can and will occur. Question is whether the innovations to be developed can compete with what is the present reality which is ~10cents/kWh price that we currently pay for power.

All things considered that is pretty cheap and even a minor improvement on price won't change the sunk costs of current infrastructure. The service of getting electricity is pretty cheap around the country and any replacement will have to be substantially cheaper. 'Better' doesn't count for much here because its just electricity and without government mandates people generally don't really care where it comes from.

Idealists like to say that we 'should' be getting power from somewhere else or in a different way. These idealists tend to ignore the market reality that our current situation isn't that bad for almost everyone.

I'm all for innovation in storage and think there might be a breakthrough at some point. But this goes to the heart of it. Right now a fully renewable grid that matches what we currently have is not financially viable. Not saying it won't become so at some point but it's a high hurdle. All things considered having close to 100% reliable electricity in every home in America for less than ~$100/month is hard to compete with.

Case in point is a very cloudy day with no wind. Depending on where it is demand could be very high if it's cold out and heaters are running full blast. You will essentially need a full load supply to come from somewhere or you'll get rolling blackouts. Some regions can compensate with importing or hydro but otherwise you would have to power up the coal and gas. Batteries could maybe work in the future but again this would drastically increase the cost.

'Storing solar power underground' - what if it's in a pressurized and compressed form that's easily transported and has a high mass to energy ratio? Brilliant!

These cost comparisons don't take into account reliability. Power is almost useless if it's not reliable. A large part of your monthly bill goes towards reliablility and transport of power, not just the power itself.

A 100% wind or solar grid would require an equal amount of backup gas or coal power in order to provide reliability which essentially doubles these cost estimates. Even now most wind and solar is considered a novelty to most grid operators because you can't take it into account for long term planning. In some cases (like Denmark or Quebec) there exists ample alternatives available for when the wind stops blowing but most jurisdictions don't have this.

Considering how smart people in Silicon Valley are the level of ignorance around renewable energy and the'why don't we all use solar panels' mindset is crazy.

Great idea, RICO investigate everyone who doesn't toe the party line! How do these people believe this a good idea? If their science is good it should stand against all falsification arguments without the need for government protection.

It could also very easily spin out of control and increase instability in Asia.

Amazing what Obama is willing to give up in order to secure 'his' legacy issues. 60 years of post war Asian defense strategy thrown out the window. I don't see this ending well. Japan a has a deep militaristic underbelly and most japanese hate their regional neighbors (South Korea, China). They are our allies but this increases instability in Asia enormously and could lead to a regional arms race between China and Japan and greatly increases the risk of a military conflict in Asia in the next 30 years.

Business people who move jurisdictions due to tax hikes are not 'ransoming' anyone - its their own private property and they can move where ever they want.

Politicians who are too stupid to realize that raising taxes causes capital flight deserve to lose businesses from their city/state.

Your idea is against the whole notion of private property. "Work like sheep for the government all you business owners and if you move or close it down we're going to arrest you"

I see your points and agree a carbon tax is the most market friendly way to account for environmental externalities. However, my main point is that wind and solar are NOT economically viable despite what Elon and every other silicon valley expert seems to believe. Even with carbon taxes priced in they can't match the price of natural gas and coal. The reason is that they are not reliable sources of energy and with both of them you need batteries of some other type of storage to smooth out production. This essentially doubles the costs. Everything you read about the 'cost' of solar and wind doesn't take into account storage or the overbuild required to have backup power for cloudy days. The type of grid that uses 100% solar/wind would be a completely unreliable grid and cost considerable more for everyone. Solar and wind aren't being adopted because they are worse for consumers, not because some cabal of special interests are keeping them out.

In fact the opposite is true. The only reason solar is being adopted at all in almost every region in the world is because of government subsidies.

(Source: I build solar and wind farms for a living).

I'm continually amazed by people who think government bureaucrats make better decisions than consumers. Or people who think they know whats best for everyone else. You don't think renewable energy companies also hire lobbyists? Are you so sure of yourself that you know what everyone else in the country should use for power?

You're right electricity is heavily regulated and has been for quite some time. Despite the regulation however most companies generally operate as a lowest cost to consumers basis. Consumers ask for the lowest prices and electricity companies tend to oblige.

When politicians decide they very often have some vested interest as a priority and try to raise rates by handing special favors to certain industries.

What makes you think when politicians make decisions based on whats best for consumers vs. whats best for whoever donated to their campaign? If you think renewable energy companies don't hire lobbyists you suffer from a disconnect from reality.

Also, you didn't argue my main point which is solar isn't competitive to other sources. Should everyone pay more for electricity?

Solar is not reliable without batteries and even with batteries in many parts of US, will not generate sufficient electricity to maintain our current standard of living. Nevada and parts of the south have lots of sun but most northern states will not generate enough power in the winter months. Furthermore this lack of reliability means you also have to build natural gas plants to power up when its cloudy out or at nighttime. This means twice the capital for the same end. When you see those listed prices for solar its for panels installed without batteries and usually in places with lots of sun.

There is also the mess it creates with the grid. The business model of electrical companies is that in your monthly bill you pay for both power and for the grid that delivers it to you. If everyone puts solar on their roof it destroys the business model of the electrical companies and in the occasions where you still want to use grid power (at night, cloudy days etc) your rates will inevitably be higher or someone else has to pay for maintaining the grid and your socializing grid usage.

I think most of the hype around solar is way overdone. Too much solar can really can do lasting damage to an electrical grid and cause massive economic harm. This has happened in Germany where they subsidized renewables so much that they pushed out reliable power from the grid and now they are having the subsidize gas/coal generation so the grid will remain reliable. Furthermore, electricity prices have gone up enormously causing large industrial companies to move abroad or scale back operations. Electricity is the lifeblood of an economy and arbitrarily raising prices and messing with how electricity is delivered and managed can have large unintended consequences especially when decided by politicians who know nothing about the science or business.

This is partly the problem with renewable power. You get large swings in generation where some days it's your entire demand and you may even have to pay to export the excess power and other days it's 0 and you need to fire up the gas plants in order to avoid brownouts. Building two power plants (wind and gas) results in double the cost and less reliable grid overall. It's surprising how much people seem to discount the reliability of wind and solar when discussing them as true alternatives to fossil fuels.

what's actually happening is the Chinese have started harassing neighboring countries in an area 600 miles offshore China and within 100 miles from other countries like Vietnam and other south East Asian countries. By harassing I mean arresting fisherman, cutting seismic cables from oil exploration companies and getting aggressive with any other ships. All these countries want the U.S. to assist in protecting their sovereignty and are asking for help. The UN won't help and no other sea power aside from the U.S. has the ability to help. Look at a map of the red line area China is assuming control over and you will see where some of these areas are. It would be like the U.S. Building artificial islands 100 miles from Spain, building airstrips and arresting any Spanish ships the come nearby. This is not US imperialism it is Chinese expansionism and other countries are asking for our help. It's clear the Chinese wants control of south east Asia and they are acting aggressively to take it.

famously insane according to who? The founding mantra of the editorial board:

"We are united by the mantra 'free markets and free people', the principles, if you will, marked in the watershed year of 1776 by Thomas Jefferson's Declaration of Independence and Adam Smith's Wealth of Nations. So over the past century and into the next, the Journal stands for free trade and sound money; against confiscatory taxation and the ukases of kings and other collectivists; and for individual autonomy against dictators, bullies and even the tempers of momentary majorities. If these principles sound unexceptionable in theory, applying them to current issues is often unfashionable and controversial."

What is insane about advocating free markets and sound money?

I really don't get why people who call themselves 'mainstream' economists can't see or choose not to acknowledge the issues the Austrians bring up. It strikes me as quite odd. Not everything the Austrian school preaches is correct, but they do have some valid points that I would expect most smart people to understand.

To bring up just a few big ones:

Printing money and low interest rate policy of the Fed influences many things other than the simplistic lower interest rate=more spending=more growth formula commonly preached.

1) it hurts people with savings. A good example is all the retirees who have saved their whole life and now can't survive on the 1% returns their savings are generating. The Fed is supposedly helping people and business who want to borrow and can do so at low interest rates.. but that does not trickle back to pensioners who should be earning more on their capital if they were not competing with the Fed.

2) monetary expansion stimulates the economy unequally across industries and geographic regions. In the models of the academic economic departments, monetary expansion may apply equally to an economy as a whole.. In the real world short run it is a transfer of wealth from one group (wage earners, people who hold cash or low yield bonds) to another group (banks, government contractors, rich people with lots of land and stocks). Some people benefit from low interest rates and new money, but many people are hurt by those same policies.

There are quite a few other issues that Austrians seems to be correct on, but these seem to be two of the most obvious to me.

This is really interesting and makes the whole situation seem absurd. It makes you wonder what they (the EU) are thinking. It is really scary that this can happen in this manner. Each individual bank was not treated differently - some Cyprus banks stayed conservative and didn't put their depositors money at risk and are still being wiped out. Amazing - and scary.

Capitalism also allowed Bill Gates to make $60 billion so he could donate it to finding a cure for malaria.

You are correct. Berkshire Hathaway would benefit, not him personally. The tax credits are a big reason these things get built. There is a 30% solar tax credit that can be passed through to owners against other income.

http://www.dsireusa.org/incentives/incentive.cfm?Incentive_C...

The reason this may not be a tax play for him is that ConEdison or SunPower may have already stripped the tax credits from the project and sold them independently. This means there may only be a long term investment vehicle that insurance-type companies like to hold. But someone benefited from the tax credits and I wouldn't be surprised if they were part of the deal.

Solar energy investments are financed through tax incentives. Buffet is doing this to reduce his tax bill.

This is most likely a tax play. Renewable energy projects are almost always financed through tax incentives that can be used to offset tax liabilities elsewhere. Could be seen as hypocritical of Buffet considering his recent musings that rich people should pay their fair share. Here he is trying to avoid taxes.

I agree with you that the poor get hit by this just as hard. A person who is facing a drug charge who has a few priors will be given the choice of pleading guilt and serving a few years in jail or going to trial and risking 20 years or some such nonsense.

But why should making everyone suffer from an unjust legal system better than the alternative. This is like the socialists who believe everyone being poor is better than some people being rich. "The equal sharing of misery" as Churchill put it, is not a good outcome.

This is a great article. I have followed the Conrad Black case closely and have been amazed for some time at the ruthless nature of the prosecution. Not only do they freeze assets, and add on ridiculous charges like 15 counts of wire fraud because the document in question contained 15 pages, they also use effective PR campaigns - bringing out the defendant in handcuffs, staging press conferences where they go into detail on the alleged crime before the trial has even begun in order to taint the jury pool. For prosecutors, many cases are not about justice but about winning at any cost - often to further their own political career. If you are unlucky enough to be caught in the sights of a ambitious public prosecutor watch out.

There is another case where the feds threatened a general labourer with 24 years in jail because he helped his boss move some bags of fertilizer. Turned out the government thought the bags might be used as a bomb making material and charged his boss with terrorism charges. He was an 'accomplice' to the crime and given the choice of pleading guilty and serving 2 years in jail or risking 24 years in jail at a trial.

The article is here: http://online.wsj.com/article/SB1000087239639044358930457763...

Stories like this make me so angry. How many other innocent people are thrown behind bars by prosecutors 'win at all costs' style.