Credit Market Overview
April 30, 2010
When the Morton Salt company came up with the slogan “when it rains, it pours” it was to tout the fact that its “iodized” product did not cake or clump, regardless of the humidity. Joy Morton, son of J. Sterling Morton, Secretary of Agriculture under Grover Cleveland, came up with the idea of adding MgCO3 (magnesium carbonate) to the NaCl winning the “Good Housekeeping” seal of approval in the process.
That slogan has become part of the lexicon, the rapper 50 Cent has even put out a song with that title, and has come to mean: “It hasn’t happened for a long time, and then it happens all at once” according to the “Lexicon Library”.
The multiple global coal mine disasters and current oil rig issue off of Louisiana verify that the Morton Salt girl had the right idea when holding her umbrella as the acquisition of the raw materials necessary to build and maintain growth around the world seems to go unnoticed until such events occur and once they do, a chain reaction is often the result.
Although it is not known what, if any, disaster will result; the world today seems intent on increasing the amount of electricity it gets from the wind. On the surface it makes some sense. It’s clean, constant in certain areas and sans the odd tornado or hurricane, relatively benign.
The NIBY (not in my back yard) issue here is the disruption of scenic vistas as the purists loath any man made objects obstructing their view. It is interesting that many of those same purists go home and switch on the lights without connecting the dots between the desire for light and the need for power.
President Obama approved a 25 square mile niche out in Nantucket Sound on Wednesday called The Cape Wind project that will generate enough electricity for 200,000 homes in when it’s complete. In deference to the late Ted Kennedy, who fought tooth and nail to prevent the project’s approval off of his beloved Hyannis Beach compound, Interior Secretary Ken Salazar conceded to having only 130 turbines in the plot versus the 170 originally planned.
On the “other side of the pond” the Brits are planning to build the world’s largest offshore wind farm with turbines as tall as “The City’s” Norman Foster designed Swiss Re building affectionately known as the “Gherkin” due to its bulging sides and conical top. Her Majesty’s subjects are wrestling with a few details at the moment as “The equipment we need to operate in such rough waters doesn’t exist yet”, according to Vattenfall AB’s Bigum Nielsen, the project’s manager.
As far away from New York as London but in the opposite direction, Los Angeles want to have a few more things “blow’in in the wind” as the City of Lost Angels wants to generate 40% of its power from green sources by 2020, up from 20% currently. LA currently gets about half of its power from coal which is made more interesting by the fact that there are no black rocks to be found anywhere in the state.
The problem with LA’s plan is that green power will cost homeowners more of their greenbacks. The local utility is already in a row with the city and has withheld a $73MM payment pending successful negotiations for a rate increase. The starting point for the power provider is a 2.7 cent/kilowatt hour increase this year alone. Given LA’s dire financial straights it is uncertain how much bargaining power they have.
The wind is there, the trick will be how to use it. As for the hot air, that’s enough for this week.
Enjoy the weekend.