Why smart meter is under-funded?

I'm surprised to know utility companies need to hire meter readers. Why this field is so underfunded?

• Smart Grid’s Low-Tech Savings: Fewer Truck Rolls

While telecom industry is so over-funded. 4G came out before 3G was massive deployed. Why?

Whirlpool

Business

• Got 19.3 million smart grid stimulus award: Support the manufacturing of smart appliances to accelerate the commercialization of residential appliances capable of communicating over a home network with other smart technologies. These smart appliances will allow consumers to defer or schedule their energy use, which can lower consumer costs and reduce peak electricity demand

Financial statement

• Balance sheet: Whirlpool is a highly-leveraged company.
• Cash flow:
• Bought back shares in 2007 and 2008 at high price. For management?

What is the benefit of 'smart grid'

Smart grid technologies will reduce electricity use by more than 4 percent by 2030, saving $20 billion in customer costs that year and cutting greenhouse gas emissions accordingly, the White House said, citing analysis by the Electric Power Research Institute (EPRI). Demands for "peak" power on the hottest summer days could drop by 20 percent. Tens of thousands of new jobs will be created, the administration projects. "We're on the cusp of this new energy future," Obama said at a solar energy center in Arcadia, Fla. "In fact, a lot of it is already taking place."

Who will make money via smart grid stimulus package

Smart grid is absolutely next hot technology. But the point is who will make money in this trend?

• Traditional huge player like GE, HON, Johnson Controls or Eaton?
• Utility company like TXU?
• IT companies like Google, IBM, Oracle?
• Telecom carrier like at&t, VZ, Sprint or T-mobile
• Telecom equipment provider like ALU?
• Even defense companies like Boeing want to involve.

Everybody win?

Approximately 400 companies applied for the $3.4 billion in smart grid stimulus funding; roughly 300 companies got
nothing. Of the 100 or so organizations receiving ARRA funding, 23 are customers of Advanced Control Systems (ACS) -- receiving a total of more than
$1.12B in DOE grants. Full list available on govtech.com.

• President Obama traveled to Florida to highlight DOE awards to 100 utilities, equipment manufacturers, cities, systems developers and other recipients. The winners have committed $4.7 billion of their own resources to match the smart grid grants.

Reference

1. DOE Grants Jump-Start the Smart Grid Toward a Still Undefined Future

GE's Green and Smart Grid Strategies

From a technology standpoint, GE has prioritized five areas that it believes are critical:

1. smart grid solutions,
2. distributed renewables,
3. low cost water solutions,
4. energy efficiency,
5. and carbon management.

In each of these areas GE is applying its metrics-driven operational culture in order to, as Fludder put it, “Invest, innovate, grow, operate, and lead”.

• GE sees the transformation of the present energy portfolio as a challenge that crosses all segments of society. Such a massive and difficult transformation is very difficult to execute without an immediate and visible crisis. Yet, he told students, now is the most exciting time in decades to be working in the energy industries.

Reference

1. GE Executive Explains Green and Smart Grid Strategies

Senior Notes

Senior Notes sounds a good investment now as long as the company is still there. What surprised me was that senior notes can trade on NYSE.

Capmark and GMAC

I've not paid much attention on Capmark's filing chapter 11 last week.

• I wonder if commercial real estate bubble burst with CIT filing bankruptcy protection. Stock market open higher.

Reference

1. 美商业地产公司Capmark申请破产保

CIT files for Chapter 11

The Chapter 11 filing is one of the biggest in U.S. corporate history, following Lehman Brothers, Washington Mutual, WorldCom and General Motors. CIT's bankruptcy filing shows $71 billion in finance and leasing assets against total debt of $64.9 billion.

• CIT's move will wipe out current holders of its common and preferred stock.
• Common stockholders set to lose their investment include FMR LLC of Boston with a 9.9 percent stake in CIT and San Diego-based Brandes Investment Partners LP with a 9.7 percent equity position
• U.S. government will likely lose the $2.3 billion it sunk into CIT last year in return for preferred shares to prop up the ailing company.
• Some bondholders would receive a mixture of new debt and equity with others getting only equity.[2]

CIT is a big lender to retailers and small businesses in the US but it ran into problems after wading too far into risky businesses such as subprime mortgages and student lending. Its reliance on financing from the bond markets created problems when access to such debt dried up after the bankruptcy of Lehman Brothers.[2]

• CIT has been working for months to reach agreement with bondholders in an attempt to restructure its $30bn debt.
• Operating units of CIT received $3bn in rescue finance from a small group of investors at the end of July and a $4.5bn secured financing facility more recently from a much broader group of the company’s creditors.

Reference

1. CIT files for Chapter 11 bankruptcy protection
2. FT CIT in bankruptcy filing after bail-out move fails

What determinte the house value?

While population influences real estate values, it is certainly not the central determining factor.

• In 1970 the population of Washington D. C. totaled 757k people.
• 1980 down to 638k people
• In real life, housing prices have shot up much faster than the rate of inflation.

The key to housing values is the ability to afford given costs and the desire to own property in selected locations.

• If a community offers good jobs, people with incomes will compete for the best locations and prices will rise.
• In a community with few good jobs or declining economic base, one would expect property values to remain stable relative to inflation or to actually fall.
• 按照国际公认的标准，房价收入比在4—6倍之间比较合理.

Reference

1. Peter G. Miller, Buy your First Home Now, 1990
2. 房价收入比最高20倍 专家：数据显示泡沫已现