Renewable Future

[ThisDinosaur]

http://www.motifake.com/image/demotivat ... 147845.jpg

Wow. Its not more impressive than Egyptian batteries or Roman indoor plumbing, but this still managed to surprised me.

[BRUTE]

You can run a clock on a spring. You can't use a spring for mass power storage.

brute has heard about some absurd flywheels. they're not necessarily practical, as in humans cleared a 10 mile path out of the rotational direction of the thing and pointed it towards a mountain. but there sure seems to have been a ton of energy stored in that flywheel.

like with batteries, flywheels are probably too heavy, as mass is where they store the energy, brute thinks. and how about having a big, rapidly rotating mass inside a moving vehicle? scumbag physics.

brute thinks that unless humans discover another "miracle" like oil, the solution will likely be a lot of patchwork. sunny/windy places can probably just use renewables for houses, or nuclear power shipped in from places in nobody's back yard..

cars might run on a combination of slowly improving batteries and slowly running-out oil. maybe synthetic oil generation will become relatively affordable enough to go into the mix.

at one point, planning/logistics might have a higher RoI than technological improvements. a bit like supposedly FedEx invests lots of money into route-planning so their trucks never have to idle at red lights.

[ThisDinosaur]

@BRUTE
Synthetic oil would require an energy input to manufacture. The most likely source would be solar, hence, biofuels.

Craig Venter has been working on genetically engineering microorganisms that secrete biofuels.
http://www.jcvi.org/cms/press/press-rel ... logy-meth/

The problem is that existing PV cells are at least three times as efficient as natural photosynthesis.
http://www.scientificamerican.com/artic ... -sunlight/

So you might as well use PV cells and batteries.....

UNLESS it costs less energy input to make the synthetic bacteria than it does to manufacture the PV cells....

I think BRUTE may be on to something.

[vezkor]

BTW, anyone looking into alt energy needs to factor in that the Federal tax credits for solar, geo, etc go away this December. That is a 30% credit, not deduction, so whatever numbers you are looking at will be skewed differently in January.

Not sure about geothermal (or other renewables) but I know the 30% solar tax credit was extended until 2019, then it diminishes to 26% in 2020, 22% in 2021 and then 10% in 2020 on wards (they say "permanent" but it could be changed per the whims of congress)

http://news.energysage.com/congress-ext ... ax-credit/

Personally I'm a shareholder of BBL and NOV because I still drive an internal combustion vehicle to work (gasoline is one of my largest expenses, so this is a hedge), and FSLR because of what I believe to be 3 materially significant competitive advantages in a rapidly growing industry. I plan to sell the BBL and NOV sometime in the next 15 years. FSLR I might hold forever. Time will tell if these investments are wise... based on fundamentals and current valuations, I would purchase more FSLR but I would not purchase more BBL or NOV. I would not, at current values, sell any of my holdings.

[7Wannabe5]

jacob said: Certainly things can be done but they're going to be done differently in the "kind" sense, not the "degree" sense.

I do not understand why we don't have the vacuum infrastructure yet. Until recently I was either hauling stuff to my garden by walking and pulling a cart or intermittently making use of a borrowed car or truck. Then I was gifted with a very functional cargo trailer for my bike, so now I am much more efficient using this method all of the time, and my hauling is completely "potato"-fed human power. Of course, since I have chosen to early inhabit the dystopian world of the future, just like the title character in the novel "The Wind-Up Girl", I must "satisfy the decadent whims" of affluent Company Men who dwell in the Northern Suburbs and are granted Platinum Card Chips by their corporate overlords for doing their part in the raid on the last of the petroleum reserves in Dubai, Tehran and Canada in order to provide myself with enough calories and tools to complete my perma-culture project. However, my plan and hope is that by Harvest 2022, I will be Calorie Self-Sufficient plus One.

Anyways, it seems to me that EROI to Civilization Ratio Chart is essentially no different than a Personal Financial Spending to Quality of Life Ratio Chart. Therefore, if I can construct a solar powered life-style system which allows me time to engage in Art and Culture, and not just spend all my day hauling water to my potato patch, then problem solved. I do not care if the other people can no longer drive their monster trucks to the monster truck rally.

[Riggerjack]

@ jacob

So, from your linked article, index funds own nearly 2 trillion, and the NYSE is around 20T. Nasdaq at 11T, and I don't know how big the bond market is.

I'm not saying that this won't be a problem, or that the tail won't wag the dog. I'm saying it is clear which is the tail.

I wonder more about the amount of money controlled by algorithm. (certainly more YOUR area of expertise.) We have already seen some serious aberrations caused by algorithms. I expect the next wild ride caused by automation to be a combination of indexing and algorithms designed to take advantage of indexing, when the market moves in an odd way. But maybe that's just my lack of trust in programming to react as planned, in complex systems with feedback.

[jacob]

@Riggerjack - A dog is not a good metaphor. Prices are set at the margin between the people who buy and sell. Not at the ends points. The market doesn't run like a democracy with a single election at the end. The decisions are made constantly ... so it's more like politics where all the noise happens at the prices (political issues) where the point of disagreement lies.

The problem with an overweight of indexing (or any single-minded strategy, e.g. dotcom, retail real estate, ... ) is that the number of people setting/contesting the price of individual issues is disappearing, so what you need to compare is not the entire size of the market but comparing th daily volumes of different strategies.

As far as algorithms go, algorithms are one of those issues where the public's perception and what actually goes on are two very very different things. The sensational non-fiction books that are being put out there aren't really helping on that understanding. Suffice to say, when you see something like a flash crash it's as likely that it was caused by algorithms detecting something weird from a human and NOT being there than it is due to a programming error. There are circuit breakers for wild algorithms that goes layers deep. That algos are good at detecting one-sided motion actually reinforces the problem [strategy conformance] above.

If you have 10 different strategies (from people) in the market and someone wants to sell, then in all likelihood someone else will disagree and step in and buy. This prevents the price from going down. However, if, say, 6 out of the ten decide on exactly the same strategy and they all want to sell at the same time, the likelihood of one of the remaining 4 stepping is lower and the price will have to drop much further than before before any one will do it.

That last paragraph is crucial to understand in order to grasp why strategy conformance is a problem.

[Riggerjack]

OK. I see that, but what I see is it causing greater volatility. Price distortions getting more out of line than usual. But those distortions are already there. How does greater volatility harm a buy and hold investor? Sometimes he will buy at an artificial high, sometimes at an artificial low. It will all come out in the wash.

I think a part of the popularity of index funds is 401ks. I know mine has index funds as 1/3 of the options. If you count the specific date funds that are just groups of indexes, it is over half.

401ks usually limit investment options pretty severely. I know that when my options are index vs high cost managed funds, I will go index. I've seen me do it. I don't see the systemic risk being greater than the losses guaranteed thru fees.

But then, I diversify by investing directly in real estate, so I may not be a good example of a typical index investor.

[eudaimonia]

@Riggerjack To answer your question the reason these price distortions are a problem is because they are not evenly distributed. The reason for this is described by @Jacob above - because the dominant strategy (buy and hold) creates the price distortion those participants following that strategy pay the adverse price more frequently than not because they essentially are moving the market.

This doesn't even actually touch on systemic or counter-party risk. See the Swiss Frank 41% overnight move for an example of price shocks, Japan from 1997 to now to show that stock markets don't always go up, the Great Depression, etc. There are even long periods (decades) of 0% gains in the U.S. stock market during the last 100 years. Current buy and hold investors ignore these warnings due to recency bias. Keep in mind that the last 5 years of U.S. stock market growth is in the 98% percentile for all rolling 5 years periods in the last 200 years. The next 5 years are unlikely to be the same as the last.

Also, I think it is exactly your line of thinking regarding 401ks (reasonable though it sounds) that is contributing to the index investor bubble. If one is serious about their investing there are tax deferred vehicles. I actively manage my portfolios through a self-directed IRA and there are also similar self-directed products for Roth IRAs, trusts, and SEP-IRAs for small businesses.

[7Wannabe5]

In the first chapter of "Little House in the Big Woods", Pa Ingalls raises two hogs for meat to get through the winter. One of the hogs he keeps penned close to the cabin and feeds. The other hog he sends out into the woods to forage.

[enigmaT120]

In the first chapter of "Little House in the Big Woods", Pa Ingalls raises two hogs for meat to get through the winter. One of the hogs he keeps penned close to the cabin and feeds. The other hog he sends out into the woods to forage.

OK, I no longer have my copy of that book (nor the rest of the series). I don't remember that part. What was it about? Did one hog do better than the other?

[7Wannabe5]

@enigmaT120: Both hogs survived to be slaughtered and smoked. My point was that Pa Ingalls used a mixed strategy for pork production. Feeding and penning both the hogs is the more expensive and less risky option if you are forced to choose only one strategy, but with this example it is pretty obvious why choosing to implement two strategies can improve profit potential and lower the possibility of catastrophic failure. Pa Ingalls is basically implementing Taleb's barbell strategy.

I am pretty financial stock market ignorant, but maybe the US index fund is like the penned hog, and some small international venture fund is like the hog let go in the woods. Your initial capital of say $10,000 would be your purchase of two piglets for $10. Then you keep feeding the index fund $1000 a month for a year, and you let the venture fund fend for itself. Something like that.

[jacob]

I am pretty financial stock market ignorant

No, [intuitively] you understand more than 90% of those so-called professionals. It's just the technical deals/concrete examples that are rather iffy, but that's easily fixed. The other way around is much harder.

[jennypenny]

Recent talk by Richard Heinberg on "Our Renewable Future" in Boston. Apologies if it's already here, I didn't see a link to it in the thread.

https://youtu.be/LcraVuQbQUI