The Standard

Gore, Kleiner Perkins Firm Forge Clean Tech Investment Alliance

Gore To Sit on Board

Al Gore has joined the board of the Silicon Valley venture capitalist firm Kleiner Perkins Caulfield & Byers.

Mr. Gore's new spot is the result of an alliance between Kleiner Perkins and his own firm Generation Investment Management.

Mr. Gore will bring a vast pool of contacts to Kleiner Perkins

The Nobel Peace Prize winner and former vice president sits on the board of Apple and serves as a senior adviser to Google.

Observers expect that Mr. Gore will be a great aid to Kleiner Perkins "clean tech" start-ups whose profit margins still depend largely on government subsidies and who have few links to big business.

Venture Capital Interest in Clean Tech

The announcement comes as venture capitalist groups have pushed more money into the "clean tech" industry.

In the first half of 2007 global venture capitalist investment in clean technologies surged to $1.1 billion.

Kleiner Perkins has said it plans to devote one-third of its $600 million investment fund to clean energy technology start-ups by 2009.

US Says It May "Delay" Missile Base in Poland

Build, Wait to Activate

US Defense Secretary Robert Gates has said that the US may delay activating the missile defense system it plans to build in Poland and the Czech Republic. 

The US proposal to build a radar system in central Europe to intercept missiles fired by "rogue states" such as North Korea and Iran has met diplomatic resistance from Russia.

Russian president Vladimir Putin has claimed the missile shield poses a threat to Russian security.

US officials have stressed it is purely defensive.

Mr. Gates said the US was considering building the infrastructure but waiting to "tie together activation" until there was definitive proof of a threat.

He added the details of any such delayed activation had not been worked out.

There was no word on how long the process might take.

Many Parties to Please

How and when the plan takes shape will depend mostly on the US response to Russian opposition.

Czech and Polish heads of state are generally seen to be in favor of stationing the US equipment in their territories.

Both, however, may have to spend energy domestically.

Opinion polls show that the Czech public is opposed to the radar system.

Tomas Pojar, deputy minister of Czech foreign affairs, has also acknowledged there is considerable opposition in the Czech parliament.

Poland's part to play will likely be complicated by the recent election of the Civic Platform party into a majority in the Polish government.

Putin To Preserve Power

Putin As Prime Minister? Likely.

Russian President Vladimir Putin accepted a proposal on Monday to lead United Russia's party list in the upcoming parliamentary elections in December.

Mr. Putin said also that becoming prime minister was "a realistic proposal."

Mr. Putin is near the end of his second presidential term and prevented by the Russian constitution from running for a consecutive third.

The New Path to Power

Mr. Putin holds a tight grip on power and many analysts speculated that he would remain in office as president after orchestrating a constitutional change.

The announcement on Monday suggests Mr. Putin has decided on another strategy for preserving his power.

United Russia was formed in part by Mr. Putin in 2001. It is the dominant party in the Duma, backed by Russia's political and economic elite.

A 50% majority in December elections was all but guaranteed before the recent events.

Mr. Putin's 70% popularity rating should help the party secure a two-thirds majority.

Such a dominating number would give the party the legal means to alter the powers of the prime minister and president.

This would effectively give Mr. Putin full scope over his own powers.

 

 

UN: Address Climate Change "Head On"

Moon and Schwarzenegger Stress Global Responsibility

Secretary General Ban Ki-Moon opened a UN meeting in New York on Monday with a call for aggressive action to solve the problem of climate change.

Moon urged more than 80 leaders to show the world they would "shoulder the responsibility" of reducing carbon emissions and combating warming trends.

These trends are changing global weather patterns and threatening the infrastructure of human civilization.

The governor of California, Arnold Schwarzenegger added later in the day: "...one responsibility we all have is action."

The words come at a time when many nations are failing to make and meet commitments that address human causes of climate change in an effective way.

The first international attempt to limit carbon emissions has largely been thwarted by the refusal of the US to sign on to the Kyoto Protocol.

Many have also expressed frustration that the Kyoto agreement failed to place responsibility on China.

In addition, it is expected that the UK will miss its target for cutting emissions in 2010 by more than half.

Clinton: Economic Benefits Come With Aggressive Action

Many leaders, including US President George W. Bush, have made the claim that a rapid response to combat global warming will entail increase costs that will harm national economies.

Speaking to the Financial Times on Sunday, former US President Bill Clinton refuted this notion.

He emphasized that new job markets created from investment in new energy-efficient technologies will help US economic growth.

President Clinton made news in May when he structured a deal that saw major banks including Citi and JP Morgan provide financing for US cities to make buildings energy efficient at no net cost.

Dollar Hits New Low Against Euro

Passes Key Threshold

The dollar dropped to its lowest level ever against the Euro on Thursday as the European currency traded above the $1.40 mark.

The dollar has fallen nearly 10% against the European currency since last September.

Its recent shot downward can be explained by the US Federal Reserve Bank decision to cut interest rates .5%.

Its longer term declines are chalked up to the enormous US trade deficit ($700 billion).

US Companies May Benefit

The push downward may benefit US companies who export to Europe as their goods will be cheaper to buy.

It will have mixed results on European companies.

As oil, raw materials and other basic resources are quoted in dollars, it may lower costs.

On the other hand, European goods will become more expensive in the US. These price increases coupled with turbulence in the US economy may hurt European companies exporting to the US market.

Many believe that the $1.40 mark is an important psychological barrier that will turn the dollar's weakness into a larger political issue in Europe and elsewhere.

France Softens Iran War Talk

Kouchner For Negotiation

French Foreign Minister Bernard Kouchner sought to cool talk about French military intervention in Iran after announcing Sunday that "it was necessary to prepare" for war if negotiations over the Iranian nuclear program fell through.

Mr. Kouchner emphasized yesterday: "The worst situation would be war... And to avoid the worst, the French position is very clear: negotiate, negotiate, negotiate, and work with our European friends on credible sanctions."

Iran's refusal to abandon its nuclear program has spawned the talk of UN sanctions among American and European powers, but it generally acknowledged that Russia and China use the threat of veto to water down European and American proposals.

Iran claims the program is for civilian purposes only.

Many Western nations fear it will eventually use uranium and acquired scientific expertise to develop a nuclear weapon.

On Monday, Mr. Kouchner broached the idea of EU-wide sanctions against Iran if the UN Security Council could not agree on an adequately strong resolution.

Russia responded to Mr. Kouchner's bolder comments with concern.

Russian Foreign Minister Sergei Lavrov said: "We are worried by reports that there is serious consideration being given to military action in Iran. That is a threat to a region where there are already grave problems in Iraq and Afghanistan."

Northern Rock Run Adds to Economic Jitters

More than 200 Londoners lined up outside of Northern Rock bank branches as early as 6:30 in the morning to withdraw their savings.

On Friday, the Bank of England provided an emergency loan to Northern Rock when the bank's short-term cash flow came up short in the face of loan payment obligations.

The news of the emergency loan has destroyed consumer confidence in Northern Rock across the UK, and people have flocked to withdraw their funds. News sources reported most customers withdrawing between 5,000 to 150,000 pounds ($10,000 to $300,000).

Northern Rock stock has plunged nearly 33% on the London Stock Exchange.

The crisis has re-ignited worry and panic about the consequences of the subprime crisis on the US and UK economies.

Many see Northern Rock as a victim of rising interbank lending rates. This rise in the cost of money will almost inevitably filter down to corporations and consumers, dampening corporate profits and consumer spending.

UK politicians urged calm and sought to re-assure the public that the fundamentals of the UK economy are strong.

UK Prime Minister Gordon Brown will meet US Secretary of Treasury Henry Paulson on Tuesday to discuss measures for regulating and calming global financial markets.

Russia Tests 'World's Biggest' Non-Nuclear Bomb

The Russian military has tested what it described as the world's largest non-nuclear explosive device.

It contained more than seven tons of TNT and its explosive power was described by Russian military officials as comparative to a nuclear weapon without any radioactive effects.

Russian state TV carried the pictures and trumpeted that the bomb's power was partially due to innovations in explosives nanotechnology.

It has received the nickname "Father of All Bombs" from its Russian designers, a clear geopolitical middle-finger to the United States, who tested the "MoAB" or "Mother of All Bombs" shortly before the invasion of Iraq.

One expert characterized this as a 'statement' of an emerging Russia.

Reflecting back over the past few months, one might put the question as to what is beyond such 'statements' and begin to look closely at the changing reality.

Russia recently renewed Cold War style bomber flights that have seen Russian bombers flying over the Atlantic. These flights have forced the Norwegian and British air forces to scramble fighter jets serveral times this summer.

In July, President Putin announced the suspension of a major Cold War arms treaty that limited the number of heavy weaponry the Russian military could deploy between the Urals and the borders of Eastern Europe.

These political and military moves are in addition to steps the Russian government has taken to encourage ultra-nationalist sentiment among the Russian people.

The Kremlin actively supports the youth group Nashi, whose nationalist fervor and military style organization is reminiscent of the Hitler Youth.

President Putin also recently gave his endorsement to standardized history-teaching manuals that describe the US and Great Britain as 'totalitarian' regimes and adversaries.

It might do everyone well to ponder the fact that the Soviet Union was never a super power in real economic terms, it was merely a super power because it decided to be one.

This next generation of Russian power is far better funded and has genuine public public support.

I've lived there. I know.

Kremlin Shores Up State-Owned Oil Monopoly

Entrepreneur Arrested

Arrest warrants were issued in Moscow on Tuesday for Mikhail S. Gutseriev, the former 100% owner of the private Russian oil company Russneft.

Russian authorities had recently forced Mr. Gutseriev to surrender his stake in the company after courts charged him with tax evasion and illegal activity.

Kremlin to Create 'Mega-Corporation'

Mr. Gutseriev's arrest comes on the heels of announcments in Russian newspapers that the Kremlin will pool together smaller oil companies in Russia to create a 'megacorporation' out of the already sizeable "Rosneft". According to gazeta.ru, the newly fused company will pump 3.5 million barrels of oil per day.

Russneft was worth $6 billion dollars and pumped only 3% of Russian oil, but apparently, Rosneft and the Kremlin will be satisfied with no less than complete control over the market.

Russian markets have been open about the fact that Rosneft is state-owned.

As one market 'analyst' put it, "Rosneft is the foundational investment idea of this year. Its operational and financial results will shatter the myth surrounding the inefficiencies of state-run companies."

Don't hold your breath.

Tax Cuts Fan US Mortgage Crisis Flames (I Respond)

In this post, I respond to a comment from LibSocialistssuck.

Dear LibSocialistssuck,

Thanks for your comment.

I'll respond.

1) You say: "you..say that pepole only use income from investments to pay mortgages."

I don't say that people only use investment income to make mortgage payments, but I see why you say I did. The post wasn't too clear here. Thanks for alerting me.

Obviously, people pay their bills with whatever cash or credit they have, whether a consumer credit card, income from investments or work, etc... Money is money, right?

2) You say "People have MORE money due to tax cuts."

This is true if you get caught up in one statistic. But a broader look at statistics suggests the opposite.

It's doubtful the middle class has more money overall, and they certainly have less spending power. As I wrote in the post (and as the NYT article detailed) incomes have gone down over the past five years when adjusted for inflation by $476. So, according to the limited statistics we have, incomes actually went down $158.

And, even if this weren't true, you'll at least agree with me that $318 really doesn't buy much these days? Won't you?

3) You say: "People have the freedom to spend their money how they choose"

I agree with you completely. But I don't see how this relates to the post or the current volatility in world markets. Perhaps you will clarify in a new comment?

4) You say: "People CHOSE to get mortgages on variable rates/ballon payments... ...it's Bush's fault how?"

It's not Bush's fault that people took variable rate loans. I don't say that.

You're right. They did choose. And now they're feeling the consequences. Nowhere do I mean to gloss over their mistakes.

The broader point is that a tax-code that leaves the debt-saddled middle class down to their very last dollar at the end of every month sets a trap for economic implosion when both they and others make financial mistakes. The defaulters borrowed irresponsibly, true. But lenders also lent irresponsibly. Wall Streeters rated bonds irresponsibly. In short, a lot of wild stuff has happened.

Problems have many causes. I picked this cause because no one else seems to be making the connection.

To tell you the truth, I'm really not too concerned about whether its Bush's fault.

But a tax system that does not leave room for the errors of ordinary citizens in finance is a tax system that ignores reality and makes the larger American system more susceptible to shocks.

My concern is that the United States have a tax codes that supports the economic system through tough times. A good tax code would push a bit more money into the pockets of the middle class so they could make their debt payments, while only raising capital gains a tad, so that cash could move (again) at the top.

That would preserve stability.