Thursday, June 2, 2011

More debate on Global warming

Thanks mac for the article. The following link has a very interesting graph. I will let you be the judge as to mans effect on Climate.

Aivars Lode

Lord Turnbull: the IPCC is useless

By James Delingpole Politics Last updated: May 16th, 2011

1321 Comments Comment on this article
How the IPCC's predictions are increasingly at odds with reality (see note)

How the IPCC's predictions are increasingly at odds with reality (see note below)

Following yesterday’s story about David Cameron’s depressing plans to bomb the UK economy back to the dark ages and wipe out the British countryside, here’s a wistful reminder of how things might have been if only we weren’t run by imbeciles.

It’s a briefing paper called The Really Inconvenient Truth – or It Ain’t Necessarily So produced for the Global Warming Policy Foundation by Lord Turnbull, the former Cabinet Secretary and head of the Home Civil Service (2002 to 2005). His arguments against unilateral action by Britain to “combat Climate Change” are clear and powerful. In a nutshell, he says: “Don’t let the deeply untrustworthy IPCC decide the fate of the UK economy.”

Lord Turnbull doesn’t mince his words:

The feed-in tariff mechanism is fast becoming a scandal. Those lucky enough to own buildings large enough on which to install solar panels or enough land for a wind farm have been receiving 30-40p per kwh, for electricity, which is retailed at only 11p. The loss is paid for by a levy on businesses and households. It is astonishing that the Liberals who attach such importance to fairness turn a blind eye to this transfer from poor to rich running to £billions a year. If you live in a council tower block in Lambeth you don’t have much opportunity to get your nose into this trough.


It is regrettable that the UK Parliament has proved so trusting and uncritical of the IPCC narrative, and so reluctant to question the economic costs being imposed in pursuit of decarbonisation. It verges on the unconstitutional that the payments being made under the renewables obligation and feed-in tariffs and the levies being raised to pay for them are routed invisibly through the accounts of the electricity industry rather than being voted in Estimates or the Finance Bill. I am also disappointed that so many of my former colleagues in the Civil Service seem so ready to go along unquestioningly with the consensus.”

The graph, as explained in the Turnbull report:

The figure shows that the linear trend between 1880 and 2000 is a continuation of the recovery from the Little Ice Age (LIA) together with the superposed multi-decadal oscillation. It is assumed that the recovery from the LIA would continue to 2100, together with the superposed multi-decadal oscillation. This view could explain the halting of the warming after 2000. The observed temperature in 2008 is shown by a red dot with a green arrow. It also shows the temperature rise after 2000 predicted by the IPCC. It has been suggested by the IPCC that the thick red line portion was caused mostly by the greenhouse effect, so the IPCC’s future prediction is a sort of extension of the red line. For detail, see Syun-Ichi Akasofu: On the recovery from the Little Ice Age. Natural Science, 2:11 (2010)

Tags: climate change, David Cameron, Global Warming Policy Foundation, Lord Turnbull

Australia's promise

Thanks Dave for the article. As many of you have read I compare the financial crisis here in the States in 2008 to the one in Aussie in the 90's. Australia came out of the crisis stronger as evidenced by this article and undoubtedly so will the USA. Interesting today politically Australia seems a little rudderless and is at a cross roads leadership wise with regard to the direction that it should take.

Aivars Lode

Australia's promise
The next Golden State
With a bit of self-belief, Australia could become a model nation

May 26th 2011 | from the print edition

IMAGINE a country of about 25m people, democratic, tolerant, welcoming to immigrants, socially harmonious, politically stable and economically successful; good beaches too. It sounds like California 30 years ago, but it is not: it is Australia today. Yet Australia could become a sort of California—and perhaps a still more successful version of the Golden State.

It already has a successful economy, which unlike California’s has avoided recession since 1991, and a political system that generally serves it well. It is benefiting from a resources bonanza that brings it quantities of money for doing no more than scraping up minerals and shipping them to Asia. It is the most pleasant rich country to live in, reports a survey this week by the OECD. And, since Asia’s appetite for iron ore, coal, natural gas and mutton shows no signs of abating, the bonanza seems set to continue for a while, even if it is downgraded to some lesser form of boom (see article). However, as our special report in this issue makes clear, the country’s economic success owes much less to recent windfalls than to policies applied over the 20 years before 2003. Textbook economics and sound management have truly worked wonders.

A flash in the pan?

Australians must now decide what sort of country they want their children to live in. They can enjoy their prosperity, squander what they do not consume and wait to see what the future brings; or they can actively set about creating the sort of society that other nations envy and want to emulate. California, for many people still the state of the future, may hold some lessons. Its history also includes a gold rush, an energy boom and the development of a thriving farm sector. It went on to reap the economic benefits of an excellent higher-education system and the knowledge industries this spawned. If Australia is to fulfil its promise, it too will have to unlock the full potential of its citizens’ brain power.

Australia cannot, of course, do exactly what California did (eg, create an aerospace industry and send the bill to the Pentagon). Nor would it want to: thanks to its addiction to ballot initiatives, Californian politics is a mess. But it could do more to develop the sort of open, dynamic and creative society that California has epitomised, drawing waves of energetic immigrants not just from other parts of America but from all over the world. Such societies, the ones in which young and enterprising people want to live, cannot be conjured up overnight by a single agent, least of all by government. They are created by the alchemy of artists, entrepreneurs, philanthropists, civic institutions and governments coming together in the right combination at the right moment. And for Australia, economically strong as never before, this is surely such a moment.
Watch our video-guide to Australia's past, present and future, or listen to an interview with the author of this Special Report

What then is needed to get the alchemy going? Though government should not seek to direct the chemistry, it should create the conditions for it. That means ensuring that the economy remains open, flexible and resilient, capable, in other words, of getting through harder times when the boom is over (a sovereign-wealth fund would help). It means maintaining a high rate of immigration (which started to fall two years ago). It means, above all, fostering a sense of self-confidence among the people at large to bring about the mix of civic pride, philanthropy and financial investment that so often underpins the success of places like California.

Many Australians do not seem to appreciate that they live in an unusually successful country. Accustomed to unbroken economic expansion—many are too young to remember recession—they are inclined to complain about house prices, 5% unemployment or the problems that a high exchange rate causes manufacturing and several other industries. Some Australians talk big but actually think small, and politicians may be the worst offenders. They are often reluctant to get out in front in policymaking—on climate change, for instance—preferring to follow what bigger countries do. In the quest for a carbon policy, both the main parties have chopped and changed their minds, and their leaders, leaving voters divided and bemused. There can be little doubt that if America could come to a decision on the topic, Australia would soon follow suit.

Its current political leaders, with notable exceptions, are perhaps the least impressive feature of today’s Australia. Just when their country has the chance to become influential in the world, they appear introverted and unable to see the big picture. Little legislation of consequence has been passed since 2003. A labour-market reform introduced by the Liberals was partly repealed by Labor. A proposed tax on the mining companies was badly mishandled (also by Labor), leading to a much feebler one. All attempts at a climate-change bill have failed. The prime minister, Labor’s Julia Gillard, admits she is unmoved by foreign policy. The leader of the opposition, Tony Abbott, takes his cue from America’s tea-party movement, by fighting a carbon tax with a “people’s revolt” in which little is heard apart from personal insults. Instead of pointing to the great benefits of immigration—population growth is responsible for about two-fifths of the increase in real GDP in the past 40 years—the two parties pander shamelessly to xenophobic fears about asylum-seekers washing up in boats.

…or a golden future?

None of this will get Australians to take pride in their achievements and build on them. Better themes for politicians would be their plans to develop first-class universities, nourish the arts, promote urban design and stimulate new industries in anything from alternative energy to desalinating water. All these are under way, but few are surging ahead. Though the country’s best-known building is an opera house, for example, the arts have yet to receive as much official patronage as they deserve. However, the most useful policy to pursue would be education, especially tertiary education. Australia’s universities, like its wine, are decent and dependable, but seldom excellent. Yet educated workers are essential for an economy competitive in services as well as minerals. First, however, Aussies need a bit more self-belief. After that perhaps will come the zest and confidence of an Antipodean California.

from the print edition | Leaders

Monday, May 30, 2011

Conversations re Dividends

Once again pretty much the conversations that occurred in Aussie in the 90's.

Aivars Lode

What Will It Take for Companies to Unlock Their Cash Hoards? By JASON ZWEIG

There is a cash crisis in corporate America—although it comes not from a shortage of the stuff, but from a surplus.

In the first quarter, the five companies with the greatest cash hoards—Microsoft, Cisco Systems, Google, Apple and Johnson & Johnson—added $15 billion in cash and marketable securities to their balance sheets. Microsoft alone packed away roughly $9 billion, or $100 million a day. All told, the companies in the Standard & Poor's 500-stock index are sitting on more than $960 billion in cash, a record.

To be sure, at many companies the cash piling up is at global operations that generate "undistributed foreign earnings" that can't be brought home, under U.S. law, without incurring taxes of up to 35%. But hundreds of billions in cash remain available—and idle.

Meanwhile, the payout ratio—the proportion of earnings paid out as dividend income to shareholders—fell to 28.9% for the past four quarters. That, says S&P senior index analyst Howard Silverblatt, is the lowest level since 1936. Dividends are going up—Intel, UnitedHealth Group and WellPoint have recently raised them—but cash is still piling up far faster than most industrial giants can possibly find a prudent use for it. Of course, investors themselves might have a better use for the cash, if they could get at it.

As Daniel Peris, co-manager of the Federated Strategic Value Dividend fund, says, "The likelihood of spending money poorly is increased by having a surplus of it."

View Full Image

Christophe Vorlet
.Microsoft's purchase price for the online telecommunications firm Skype, widely criticized as too rich at $8.5 billion, almost precisely matches the amount of cash that Microsoft raked in last quarter. Was that torrent of cash burning a hole in Microsoft's pocket?

"No way," says Bill Koefoed, general manager of investor relations at Microsoft. "We see this as being a very strategic acquisition."

The heart of the problem, as the great investor Benjamin Graham pointed out decades ago, is that the best interests of corporate management and outside investors are at odds. That is especially true for giant companies whose growth has been slowing. "The more dubious the company's prospects…the more anxious management is to retain all the cash it can in the business," Graham wrote. "But the stockholders would be well advised to take out all the capital that can be safely spared, because these funds are much more valuable to them if in their own pockets, or invested elsewhere."

Amnesia is another culprit. In the past, companies paid out vastly more of their profits as dividends, and they should again. "If there were a greater historical sensibility among investors and managers," Mr. Peris says, today's low payouts "would be called out as an abnormal situation that's likely to lead to that money being less well-spent than it otherwise might be."

Dividends have gotten short shrift in recent years as investors have come to favor companies that instead use cash surpluses to buy back their shares. Meanwhile, with the economic recovery barely out of the sickbed, many companies are reluctant to invest heavily in expansion. Others want to keep cash handy for potential acquisitions. So cash sits idle—even as interest rates, after inflation, are so low that cash often produces negative real returns.

Benjamin Graham made three simple proposals in 1951 that deserve to be revived.

First, investors need to realize that a company's cash is a valuable asset, even when interest rates are low; if management won't put it to good use, investors must speak up. As Graham wrote: "When the results on capital are unsatisfactory, it is appropriate for stockholders to…insist that it be returned to stockholders on an equitable basis."

Second, companies should set formal dividend policies. Rather than paying or raising dividends out of the blue, they should state in advance what proportion of earnings they expect to pay out as cash dividends. If, instead, they plan to use excess cash to buy back shares, they should offer hard evidence that the stock is undervalued.

Finally, Graham advocated that leading companies should pay out two-thirds of their earnings as dividends. That rate isn't as radical as it might sound, even though it would amount to more than a doubling from today's levels. The dividend payout, as a percentage of total profits, has averaged 52.3% since 1936 and 46% over the past two decades, according to Standard & Poor's.

If the companies in the S&P 500 raised their payout ratio to 50%, Mr. Silverblatt estimates, that would put an extra $207 billion into investors' pockets—at a time when shareholders' dividend income is taxed at historically low rates.

"Companies are basically earning more than they've ever made before, but their payouts are nowhere near that high," says Mr. Silverblatt. "They're holding their cash really tight. You can call them Scrooges if you want."

Write to Jason Zweig at