Hedge Fund Manager Chanos: Pump Oil Now Because EVs Are Coming

1 year ago by Jay Cole 86

Pump Now, Because The World Is Going Electric - Chanos

Pump Now, Because The World Is Going Electric – Chanos

Hedge fund manager and Kynikos Associates President, Jim Chanos was interviewed on CNBC on Thursday, and had a couple interesting (and uncharacteristic) observations worth noting.

Jim Chanos Sees An Electric Future - At The Expense Of Petroleum

Jim Chanos Sees An Electric Future – At The Expense Of Petroleum

The first being bullish on solar, but still maintaining a short position in Solar City (of whom Chanos says is not a tech company, but a finance company); despite the recent surge in PV stocks thanks to the pending 5 year renew of the 30% federal tax credit.

The second point of interest was a message to all the oil pumpers out there:

“I think if you were to look out five or 10 years, if I was a member of OPEC, I would be pumping as much as I could today while it’s worth something, because it might not be worth a whole lot by 2030.”

The reason?  Electric vehicles.

The fund manager stated he was short all of the major leveraged oil companies today.

“What is really fascinating is that you are going to see this connection between solar and electric vehicles, and think that is one of the more interesting things that not a lot of people are talking about…we are going to get automakers who are going to transition their fleets much more to electric.”

“…Tesla was the vanguard, but now major manufacturers are putting their fleets to electric.  Imagine a world in which most of the vehicles are electric.  And yet they are powered off the grid by natural gas and solar, so you reduce coal emissions and you reduce burning oil.  80% of all petroleum demand is transportation.”

For some further insights into Mr. Chanos’ positions and his outlook for oil and electric vehicles, check out the whole interview video at CNBCHat tip to Mark H!

 

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86 responses to "Hedge Fund Manager Chanos: Pump Oil Now Because EVs Are Coming"

  1. jim stack says:

    If they keep pumping it and burning it in 80% inefficient vehicles we won’t be alive in 2030. How crazy and desperate can companies be for money? GREED has made every civilization fail in the end.

    1. Anon says:

      Hedge Fund Managers care not about Bio-Diversity, Acid Rain, Geo-Political and Social Instability, Ocean Acidification, Extreame Drought, Widespread Famine, Super Hurricanes, Flooded Coastlines, etc., etc.

      Only money matters to these people. Only money.

      1. MikeG says:

        Agreed. But his stance reflects that solar and wind are currently or soon will be lower cost than fossil fuels (even negating FF externalities, like climate change and pollution).

    2. scott franco says:

      Yea, the world will end by 2030.

      Apparently stupidity is a factor in the fall of civilizations as well, you being a case in point.

      1. RexxSee says:

        The world won’t end but civilization as we know it can. We don’t even know what we have already triggered in the biosphere mechanism. For all we know, it may be too late already.
        Musk said once that this 150 year CO2 experiment is the stupidest of all. Keeping adding CO2 right now is playing Russian Roulette with our only one life support system. This is how stupid greedy and powerful people can get.

        1. Glenn says:

          ManBearPig (a.k.a. Arctic CH4) is real and may kill us all.

      2. flmark says:

        Ocean rise will not suddenly end civilization as we know it. But there are other HUGE factors that could happen over just a few short years that would turn everything we know upside down. Ocean acidification is ALREADY effecting oyster farmers who must add soda ash to keep their baby oysters alive. If the ocean food chain collapses (because shells cannot be formed), you cannot begin to imagine where civilization ends up. Second, we have HUGE amounts of methane stored under arctic permafrost. If that is dumped into the atmosphere, being 100x more potent than CO2 (in the short run), temperatures will rise so fast that agriculture will not be able to keep up. Drought and famine do indeed end cultures, but this will be a global phenomenon. Finally, with 40% of the world’s population getting its drinking water from glacial melt, rapid melt-off of the final glaciers will spell chaos. I am not betting on near term catastrophe…but I would also say that to overlook the calamitous situation we are facing is extremely idiotic.

        1. Speculawyer says:

          There really are some serious unknowns. Massive amounts of methane released from the thawing arctic permafrost and the under water methane clathrates could accelerate climate change. Heat waves could wipe out inland drops. Sea rise combined with storm surge from big storms could salt the earth of rich delta farmland.

          Those people that say we don’t if climate change is really bad have a point . . . but it could also be far worse than we predict.

      3. Nick says:

        That’s right, it’s all just a bad dream.

        Keep pumping oil and go back to sleep.

  2. tftf says:

    I agree with Chanos on principle with the exception of two important points:

    1) ‘Only’ 70% (not 80%) of global oil usage is for transportation. Given the huge absolute numbers that’s not a trivial difference

    2) Because of cheap oil and PHEVs the shift to mass-market BEVs could take much longer than anticipated. My estimate is at least 1-2 decades given the evolution of battery tech, battery factory capacity and slow replacement cycles for cars (as well as a well-developed used car market).

    3) Given the development in Asia/Africa (millions and milllions of people entering the middle class for the first time) there could still be a solid demand for oil for decades to come.

    For example: Anyone without a convenient overnight charging spot (apartment renters, especially in Asia/Europe) will not easily be switched to EVs, regardless of lower EV prices.

    1. tftf says:

      PS: The example belongs to point 2).

      1. ItsNotAboutTheMoney says:

        If you have a car that you park somewhere near a residence with electricity, there is no technical obstacle to having access to a charger. As the overall demand for plug-ins grows, installation of chargers will become progressively easier.

        1. martinwinlow says:

          You mean ‘charge points’ as the actual charger is in the EV but your point is generally valid.

          I would add, tho, that as far as apartment dwellers is concerned, I would imagine most have a parking spot, quite often part of the building (underground car park etc. To equip *every* parking bay (so no arguments about ICEing etc) with a Level 1/Mode 1 or 2 (ie standard domestic AC) socket would cost relatively little and yet do very much to encourage EV ownership.

          At this early stage of EV development, this is where our respective governments should be spending money, not on useless roadside Mode 3/Level 2 dedicated EV charge points. Why useless? Because no sane EV driver is going to leave home without having enough range to get home again unless s/he is 100% (not just 80% or even 99%) sure they will be able to ‘destination charge’. The psychology of potential EV owners will mean that as long as they can charge at home, they have a good basis for owning an EV.

          Beyond that, for EV owners in general and EV owners who do not have a dedicated parking spot with a handy mains socket immediately available (60% of EU car owners for example), realistically, every single marked parking bay will have to have a Level 2/Mode 3 dedicated charge point, tho I’d suggest an inductive charging pad would be more practical.

          MW
          EVBitz.uk

    2. ItsNotAboutTheMoney says:

      1) The price of petroleum depends on the balance of supply and demand, with pricing set by what’s happening at the margins. Any significant reduction in fuel use for transportation would eat away at the margins.

      And it’s not just transportation that can be affected by NG, renewables and cheap batteries: petroleum, particularly its diesel fractions, is also used for heating, electricity and light.

      2) PHEVs are not just plug-in cars, they’re hybrids. The 2nd generation (2015-2019) are getting greater AER and higher hybrid fuel economy. (In addition to that, conventional vehicles are also becoming more efficient.)
      The 2nd generation of BEVs will have additional range, which means that not only will more people buy them, but when they do, they will each displace more petroleum miles.

      3) How much fuel would they use compared to typical private and freight transportation in the USA, China or other major markets? You could see different growth patterns to developed countries, with infrastructural issues and development concentrated in primary cities leading to more use of rail freight, and private drivers traveling shorter distances.

      1. SJC says:

        1) With investment banks manipulating the price of oil on the way from the middle east to the refinery, it is not totally about “supply and demand”.

    3. jerryd says:

      New 200 mile EV’s will charge in 15 minutes that cost less than similar gas cars will solve the problems you mentioned in just 3-5 yrs.
      These will also displace PHEV’s as not worth the complexity, cost. Only in big vehicles will PHEV last.
      Asia will change faster than we will likely as most of them have much higher fuel
      costs .

    4. And how much of the transportations are cars? It’s only a small sub-group.

    5. Paul Scott says:

      I think autonomous cars will call the question on ICE vehicles. Millions of fully-electric AVs will replace private car ownership starting in about 5 years, and the lion’s share of private car sales will be over inside of 20 years.

      We spend close to a trillion dollars on oil for personal transportation every year. That same work can be done with $200 billion in renewable electricity. The $800 billion in savings every year will then be spent on local goods and services generating millions of jobs in the process.

  3. Alaa says:

    How come he says that now? Did he not see this a couple of years ago?

    1. SJC says:

      EVs are coming at a .1% rate per year, he can take his time.

      1. Paul says:

        EV sales are doubling about every 2 years. With prices dropping fast and range doubling, it won’t take long. China is the biggest car market and they are making more EVs than anyone.

        1. SJC says:

          Care to make a prediction when EVs (NOT PHEVS)
          will be 10% of U.S. sales? After 15 years the hybrid is still less than 5% of sales and they have real utility.

  4. SparkEV says:

    If right wing nut job like myself realize EV is the near future, it’s no surprise fund managers would see it, too. Before wide spread of DCFC, EV were not really practical (expensive / commuter only) But with DCFC, it’s become real car.

    While this is still work in progress, 2015 marked convergence of multiple affordable EV with widespread DCFC in CA. Now we have real-world proof that EV is more than just expensive commuter golf carts, and things will only get better from here.

    1. Alaa says:

      Very soon there will be less need for DCFC. Let us suppose that you have a car that can travel 3000 km between charges. Now who travels 3000 km without a good night sleep?

      So what do we have now; well the model S can do 700 km or more on 1 charge at 72 km/h. Not fast but ok. In the very near future this will be more than 1200 km. I suspect that by 2020 DCFC will be around but hardly used.

      1. SparkEV says:

        You’re assuming some far fetched ideas where as I base it on current situation. If 3000km range can be done, 300km would be much cheaper and just as practical using DCFC. Also, carrying around 3000km worth of batteries when it rarely gets used isn’t efficient, neither for energy efficiency (manufacturing and driving) nor one’s bank account.

        Having said that, it would be great to have such vehicles affordably would be great (Mr. Fusion?) I just don’t think it’ll happen any time soon, and certainly not by 2020. But widespread 300km (200 miles) affordable EV is just around the corner (late 2016).

      2. scott franco says:

        Yes, we need 3000KM cars, even though there is no gas car that provides anywhere near that range.

        1. Nick says:

          Of course quick refilling means gas cars have effectively unlimited range.

          1. Ziv says:

            With Tesla’s Supercharger network already operating at 130+ kW charge rates, BEV’s can add 130 miles of additional range in around 20 minutes. Gasoline is still faster, but not by much.
            The trend is your friend if you want to drive electric, not gas.

    2. jerryd says:

      Sparky, EV’s are very fiscally conservative as is solar making your own power/fuel
      for less.
      I think 2017 will be the big turning point as the 150-200+ mile range lower cost EV’s come out with fast charging.
      As they, Bolt, 3, etc have less wthr/mile they need less battery and at least the 3 can recharge 150 miles in just 15
      minutes.
      With that it allows everyone have an EV, even those without a home plug without having to have a separate car for trips, etc.

  5. ffbj says:

    Well, their are no evs that are trucks or long haul vehicles, so you can take all those out of the equation, around 130 million in the U.S. alone. Some buses and local delivery are going to ev or hybrid.

    Car manufacturers aren’t wholeheartedly embracing evs, with a few exceptions, the Volt and the Leaf, quite the contrary, many are just producing compliance cars, and begrudgingly entering the ev market, continually trotting out ‘concept’ cars, and until the recent ‘Big Stink’ VW touting the benefits of ‘clean diesel,’ as the solution.

    The problem with some of these big money men is they start believing their own propaganda, surrounded by yes men who never question their views they are not good prognosticators of where things will go in the future. A year ago T-Boone Pickens said oil would be back to $100 a barrel by Christmas 2016. Well who know oil better than T-Boone? The problem was his predictions were based on what he thought would happen, he did not understand that the Saudi’s would just open the taps and keep them open flooding the world with unwanted oil, driving the price down. Tankers full of it sitting off the coasts as it is cheaper than storing it on land in near full oil storage depots. Around 50 million barrels is just floating around on tankers waiting for the price to rise. Demand is also slack, with warm weather in the U.S. east coast heating oil demand is very low. There is just a lot of cheap oil and he says pump more now, because soon no one will want any.
    Not likely.

    It is just common sense not to invest in highly leveraged companies, as a matter of course.

    1. energymatters says:

      Actually Eaton’s heavy drivetrain group which supplies Kenworth, Peterbilt, etc. has a full plug–in hybrid drivetrain that is in production now.

      Here’s one example
      http://www.kenworth.com/media/9395/kenworth_t270_brochure.pdf

      1. ffbj says:

        Good. There are also cng trucks which pollute less than diesel. Main point: oil is not going away anytime soon.

      2. Pushmi-Pullyu says:

        Smith Electric Vehicles also makes heavy EV trucks, but only in small numbers, and nobody would claim they can be used for long hauling. Strictly local use, probably recharged at a fleet depot every night.

        EV passenger cars are a much lower tech hurdle than long-haul EV heavy trucks. I feel confident that eventually they’ll be commonplace, but perhaps not for 20 years.

        http://www.smithelectric.com/

      3. oldevguy says:

        Check out Wrightspeed.com

    2. jh says:

      Buses are already being replaced large scale. And there are full size busses with roughly 1000 kilometers of range. And 1h charge option. Long haulers are already under development. And some are already in production. He’ll, hee in europe we have th first generation of car ferries that are battery powered.this is going very fast indeed.

    3. Mark Tebbutt says:

      New Australian electric bus drives into record books – 1018km / 636 miles on 1 charge. http://onestepoffthegrid.com.au/australian-all-electric-bus-drives-into-record-books-1018km-on-one-charge/#.VlWxoRpLlc4.twitter

    4. Ziv says:

      f, I wonder how fast we will see 10% or more of city buses electric. Proterra already delivered 80 electric busses and they are just getting started.

  6. sven says:

    In other words: Drill, baby, drill!

  7. Taser54 says:

    People, any time a Hedge Manager comes out with a recommendation, he has already positioned himself to benefit on both sides of the deal.

  8. Loboc says:

    This guy is short TSLA and SCTY and all oil companies. All he is doing is supporting his positions with FUD.

    1. TomArt says:

      Definitely; however, to make money, you occasionally have to face reality, so there is some truth in what he says.

    2. tftf says:

      Do you know how much money Chanos made over decades?

      That doesn’t work by giving some FUD (as you call it) interviews from time to time.

      There’s a reason people listen when he talks.

      PS: Nobody is right all the time, but the best investors, traders and poker players have an edge (skill and experience, not just luck)

      1. Nick says:

        Hehe.

        With everyone placing bets at random, someone will beat the odds. This doesn’t necessarily suggest any skill on the part of the players. Just luck.

        1. tftf says:

          Sure, all luck. I talked about the best, not all market participants.

          Nick, otherwise might be the next Buffett. Just buy some stocks (throw darts at a list of stocks) and wait for a decades.

    3. Tesla is far away from the highs and the stock is set to ZERO growth this year. Short is the right way to make profits.

  9. PVH says:

    I basically agree with what he says. let’s imagine that all those short range PHEV’s that are coming to market with 10 Kwh batteries do soon get 15-20 Kwh batteries due to increased energy density batteries. That makes a significant portion of drivers with a split of EV/gas miles of 70/30. It takes only a few connsumption percent difference to make crude oil prices fall if output remains more or less the same. Moreover the more they pump the more they delay car electrification. We may have cheap oil for next 5 years or more.

  10. Mikael says:

    “Imagine a world in which most of the vehicles are electric. And yet they are powered off the grid by natural gas and solar, so you reduce coal emissions and you reduce burning oil.”

    If I imagine a world it will definitely not be having cars powered by fossil fuel.

  11. John says:

    oil is not the root cause of global warming. the root cause is over population. Making everything more efficient will still lead to even more overpopulation and over consumption. So whoever survives by 2030 is anyone’s guess.

    1. Mikael says:

      Overpopulation is a problem we already have stopped.

      Oil, coal, gas and other sources to increased levels of green house gases in the atmosphere are the root causes to increased global warming. Reducing and finally getting rid of fossil oil is an important step forward.

      1. Pushmi-Pullyu says:

        Mikael said:

        “Overpopulation is a problem we already have stopped.”

        You have to have your head buried in the sand very firmly indeed to actually believe that.

        The current refugee crisis in Europe is one of the more obvious symptoms of increasing overpopulation. Other symptoms are continuing slash-and-burning of tropical rain forests; ethnic conflicts and famine in East Africa; and continuing tribal conflicts in the Mideast. Overpopulation, not religious fanaticism, is the root cause of ISIS and other violent extremists battling for territory.

        Overpopulation is also causing increasingly rapid depletion of resources. Most noticable is the rising problem of water table depletion, quite rapid in Southern California, but even here in Kansas the water table has been measurably dropping for decades due to over-irrigation.

        And the population “clock” shows no signs of slowing:

        https://www.census.gov/popclock/world

        Is Homo sapiens going to be extinct in 2030? Will civilization as we know it collapse? No, and no, despite what some CAGW (Catastrophic Anthropic Global Warming) alarmists are shrieking. But in the coming decades, the differences in life expectancy and the standards of living between “have” and “have not” countries and regions, are going to become increasingly stark… and the conflict between the two worlds is going to grow far greater than just the occasional small-scale terrorist attack in a major Western city.

        I hate to be a Cassandra, but it seems inevitable that things are going to get a lot worse over the next several decades, until the human population is reduced to a sustainable number — one way or another. Personally I’d prefer a planned, non-violent reduction, but human nature being what it is, that’s not likely to happen.

    2. scott franco says:

      All of the overpopulation lunes have switched over to climate change now.

      You must have missed the memo.

      1. oldevguy says:

        Franco, you are one arrogant anal orifice.

    3. Nick says:

      Educated and empowered women fix overpopulation. We’re well on our way in this front.

      1. The world is far away from stopping population growth. You should have a look at population data over the last 50 years from Afica and South-Asia.

        1. Nick says:

          Yes. They are among the last bastions of disenfranchised women.

        2. Mikael says:

          Take an hour of your life and watch this, you will find it very informative:

          1. Ambulator says:

            I can’t believe I watched the whole thing.

            We’ll either have to find a power source cheaper than fossil fuels for the world’s poor or we will have to subsidize a low carbon alternative for them.

            1. Seth says:

              Oh dear, I fell into the same trap.

              A awesome recommendation. Perhaps we can get to nudge Hans Rosling to roll out some statistics about what the impact of electric cars are in the big picture.

      2. Pushmi-Pullyu says:

        Nick said:

        “Educated and empowered women fix overpopulation. We’re well on our way in this front.”

        No, we are not “well on our way”. Europe is the only region where population is actually shrinking, and there only very slowly. Even that region may see population growing again, if they keep accepting unlimited refugees from the Mideast.

        Please read up on “The Tragedy of the Commons”. World human overpopulation is that problem writ large, on a global scale.

        https://en.wikipedia.org/wiki/Tragedy_of_the_commons

        Voluntary reduction is never sufficient to bring an end to a Tragedy of the Commons situation. Sure, it helps that Europe has stopped its population growth. But that hasn’t stopped every other region of the world from continuing to grow out of control, and the current global population is already consuming natural resources at a rate far above sustainability.

        Yes, education of women and widespread availability of birth control are helping to slow continued population growth. But we need to actually start reducing population at the rate it’s now growing, or even faster. Merely slowing growth isn’t sufficient to stop the downward spiral of global resource depletion and increasing conflicts over those diminishing resources.

  12. TomArt says:

    I don’t think that his reason for shorting SCTY is because it is a finance company, and not a tech company. I agree with that definition, but that’s no excuse to short a company.

    IN fact, there is no excuse for shorting at all. That destabilizing bull—- needs to be outlawed…gambling belongs in casinos, NOT in capital markets.

    His ilk are sick, evil bastards, through and through. There cannot be too little press on these people. Ignore them.

    1. SparkEV says:

      There’s nothing wrong with shorting. It’s the freedom to choose, and when shorting is backed up by data, it’s not gambling. The unexpected uncertainty (eg. government bailouts) due to inability to extrapolate the data that makes it gambling, long or short.

      In fact, if not for government bailouts, I might be sitting pretty financially and maybe driving a Tesla instead of SparkEV; I pulled out too early when government announced bailouts.

      1. ffbj says:

        True. Shorts play a role in the market, though
        a reinstatement of the uptick rule would be a good move. So if you had of stayed in your name today would be TeslaEV.

      2. scott franco says:

        Shorting serves an important place in the world, like lice and roaches.

        Besides, on occasion a shorted company can corner the shorters, like VW did a few years back. Its serious fun.

        http://dealbook.nytimes.com//2008/10/31/porsches-vw-move-too-clever-by-half/

      3. Pushmi-Pullyu says:

        SparkEV said:

        “There’s nothing wrong with shorting. It’s the freedom to choose, and when shorting is backed up by data, it’s not gambling.”

        It’s true; shorting stock does play an important role in the stock market. I have even seen *gasp* some rational back and forth discussion on one forum between long and short investors, on the subject of their investment strategies… altho not on the subject of Tesla stock!

        The problem with some short sellers, certainly not all of them, is that they use the Internet to spread FUD and lies about the stock and its company, in an attempt to drive down the price of stock they’re shorting. This becomes particularly bad when such FUD disrupts otherwise reasonable and perhaps even useful conversation… such as the comment threads on InsideEVs. In other words, it becomes trolling.

        And among investors, this is a problem only with short sellers. There isn’t any comparable anti-social posting by long investors. Certainly “longs” can and do “pump” the stock, but they don’t use the same sort of extremely disruptive, anti-social posts that short-selling trolls do.

        The Tesla-bashing FUD post by Counter-Strike Cat in this very comment thread is a very mild example of such a troll’s FUD. (Altho I must say I’m surprised to see him being so honest about his short-selling motive… for once.)

        1. SparkEV says:

          Some shorts spread FUD, but some longs also spread misinformation (ie, pump and dump schemes), so rumor spread is not only about short vs long. People who invest based on internet rumors are gamblers, short or long.

          OTOH, when government comes in and dramatically disrupt the market unexpectedly, it makes investing more gamble than it would be.

          Normally, I invest in companies that produce stuff that I like to use. But I’m still afraid to own much GM stocks, despite loving SparkEV.

          1. ffbj says:

            Just index it. Various recent definitive studies have shown that indexed funds beat 80% of actively managed funds, individual investors even under-perform active management, which I find incredible considering the main reason active managers under-perform is due to the fees charged.

            1. SparkEV says:

              Index is fine, but sometimes I want to support my favorite companies more than just buying their product. I figure if I’m crazy about their product, others would be, too, and probably get good returns. So far, many returned enough to offset the purchase price of their product.

  13. przemo_li says:

    IIRC my 8th grade chemistry class, one do not simply turn 100% crude oil into 100% gas.

    Gas is in fact by product of various ever more complex reactions, involving heat/pressure/etc.

    Oil will be useless now. However other substances will still find their use.

    Do we have any data how much crude oil is used for oil production?

    Crude & refineries are here to come. Question is how badly their numbers will be decimated.

    1. przemo_li says:

      * Yes in Poland we do have Chemistry and Physics at early in education.

      Can’t understand why classical physics is only taught at Univ in USA.

      Its like shooting Yourself in the lung for fun.

      1. Pushmi-Pullyu says:

        przemo_li said:

        “Can’t understand why classical physics is only taught at Univ in USA.”

        It’s a symptom of the low pay and low social status of teachers here in the USA. Almost everyone with a real science or engineering degree can find a much better paying, and much more respected, job elsewhere than in the K-12 public school system. Engineers, in particular, are in high demand in the tech sector and in manufacturing.

        In Europe, China, and other countries more enlightened in this respect than my native country, teachers are treated as they should be treated: As professionals, with a salary appropriate for those in a professional career.

        It’s truly depressing to see all the argument here in American over just what’s wrong with our educational system. Attempts to reform it are about as useful as rearranging the deck chairs on the Titanic, and will continue to be, until we start educating and paying our teachers as the professionals that we need to have in the all-important job of educating the next generation of Americans.

        1. SparkEV says:

          While pay for K-12 teachers is less than engineers and some scientists (eg. Physics), median pay is above median income.

          In Korea (probably Japan and China, too), science teacher pay is also less than comparable science jobs, but the gap is smaller due to lower pay for science/engineers than in US. I think it’s a symptom of suppressed culture where working for big company and government is more valued than entrepeneurs and making it in small companies.

          But what is really puzzling (didn’t want to use expletive) is how much the classroom costs in US. In CA, per pupil spending is over $12K, 30 student classroom would be $240K. Yet, teachers complain about having to buy supplies for their classroom. Where does the money go? Based on test scores and teacher pay, it’s not going to students nor teachers.

          Meanwhile, Korea spends about $4K per pupil, yet produce one of the highest math/science scores in the world.

  14. scott franco says:

    Congrats.

    This wins my vote for stupidest thread of the year.

    1. Anon says:

      A vote of one, does not an election, make.

      1. ffbj says:

        I did not even know it was nominated.

  15. Ocean Railroader says:

    As far as I care this is another idea that supports my theory that as long EV’s are driving on the roads even in small numbers and are being mass produced or the threat of being massed produced gas prices will not go rocket up. In that if they tried to the EV’s would grow in number.

    Gas was cheap when the EV1 was on the road. When the EV1 got scraped it sent a message to the oil companies that we can do whatever the beep we want. But as soon as the Mitsubishi i-miev and Nissan Leaf along with Chevy Volt hit the road. The mood at the oil companies is we better tip toe around the giant sleeping pack of bears.

    1. Mikael says:

      And that is one of the reasons why we need to put taxes on oil and petrol/diesel to make sure that there is a steady increase in the price and that more environmentally friendly options get economical when compared.

      1. SparkEV says:

        Increase taxes only benefit the rich who know how to game the system. Far better is to subsidize non-oil. Instead of spending $650B in defense, how about directing 1/2 that to non-oil energy?

        But with class warfare so fervently in minds of many, all they can see is to tax, tax, tax without seeing awful harm the taxes are doing.

        1. Skryll says:

          We do need carbon tax, because this subsidy of oil at the expense of everyone else to clean up their mess later has got to stop. We don’t need new incentives as much as we need having the carbon fuel industry participate on the cost of the damage it causes so they have to price it in.

  16. Pushmi-Pullyu says:

    The article says:

    “…maintaining a short position in Solar City (of whom Chanos says is not a tech company, but a finance company)”

    Interesting viewpoint. Certainly there is an argument to be made that, altho SolarCity is now entering the business of manufacturing solar panels, their business model is primarily based on renting solar power equipment to commercial buildings, and making a profit from the difference between day and night rates from the local power company.

    As many have noted, this night-time differential will tend to lessen or go away as more and more people install solar power on private property. In that sense, shorting the stock makes sense.

    However, investors would be pretty foolish to take Jim Chanos’ overall investment advice. Oil consumption is not at all threatened in the near term by EVs, and the amount of impact will never grow at such a fast rate that an investor wouldn’t have time to react. Short-sellers can make money only by short-term investments. Shorting a stock is not a successful long-term strategy.

    Consider that even if some company started selling a “Mr. Fusion” device to power cars tomorrow, it would still take about two years for auto makers to design, build, and test automobiles to use the device. Then they could start selling them, but even if everyone wanted to replace their gasmobile immediately, auto makers can only produce cars at X number per year. So even a hypothetically perfect car, powered by a Mr. Fusion device, would only slowly replace the existing worldwide fleet of gasmobiles, over a number of years.

    Plenty of time for the stock market to react in an orderly fashion, and plenty of time for Big Oil companies to use their bloated, obscene levels of wealth to buy into “clean” energy sources, such as nuclear, solar, and geothermal power.

  17. ffbj says:

    It is not coincidental that a few days after
    SCTY stock rockets from $25 to $55 a share that another country is heard from, Jim Chanos. Poor Jim he can’t borrow as much stock as he cares to in order to short it.
    An incredible 54% of SCTY stock is held short, setting up for giant short squeezes like the doubling within a few weeks we just saw.

    1. Skryll says:

      A few things to note:
      – the saudis are already pumping what they can and selling it cheap to maximize output, they know whats up.
      – SCTY is part of the tesla energy triangle (production – storage – consumption) and therefore backed by more than its own investors
      – fossil to renewable revolution has just begun, carbon tax on fossil fuels has got to come sooner rather than later to reflect the environmental cost it incurs, the renewable industry will be massively accelerate when that happens
      – SCTY producing their own panels and establishing long term revenue through long term contracts reinvesting every penny they make is the AMZN business model

  18. OB1 says:

    Good stock pickers make educated guesses. Jon Najarian of cnbc picked Solarcity stock around the first of December, based on unusual activity with Solarcity options. Could it be that government employees and elected officials made money based on inside information?

  19. Peak gasoline use in the U.S. occurred between 2006-2008.
    (depending if based on per population or per registered vehicles)
    http://www.scientificamerican.com/article/has-the-us-passed-peak-gasoline/

    The decreasing use of fossil fuels is already impacting the amount of tax revenue collected for state & federal highways!

  20. Chip says:

    “What is really fascinating is that you are going to see this connection between solar and electric vehicles, and think that is one of the more interesting things that not a lot of people are talking about”.

    Tesla has shown that an EV can be better than the equivalent ICE. Solar City is now installing Solar PV on large numbers of rooftops. These two factors are starting a trend towards large numbers of people being able to commute by charging at home and at work instead of buying gasoline.

  21. Tank says:

    It goes to show that consumer demand and opinion drives the market and the most competitive and efficient way to handle a consumers demand is private enterprise and innovation. Clean energy has been coming along for a very long time, yes governments can promote it, but if consumers do not embrace it due to cost, quality and efficiencies nothing happens in the market. It is great to see innovation in this field is finally catching up with consumer demands and expectations a cleaner future has been in the works for a long time maybe the curve is finally reaching the consumer were it can actually make a difference rather than putting the cart before the horse.