Tuesday, December 22, 2020

Tesla to become the most valuable company EVER to join the S&P 500 when it debuts Monday after its stock hit an all-time high in Friday trading

This is a classic stockmarket bubble. When enough people realize that electric cars are no good in Northern winters, the stock could collapse to just a few dollars. Anybody who buys in now is in for a big loss

Tesla shares hit a lifetime high in anticipation of its addition to the S&P 500 next week closing up six percent at $695 on Friday.

The electric car maker will on Monday become the most valuable company to be ever added to Wall Street's main benchmark, accounting for 1.52 percent of the index.

The electric car maker's shares had already surged about 60 percent since mid-November, when its debut in the S&P 500 was announced.

California-based Tesla's stock has skyrocketed almost 700 percent year-to-date, putting its stock market value at over $650 billion.

It makes it the sixth most valuable publicly listed U.S. company, with many investors viewing it as wildly overvalued.

Its grand entrance was expected to be preceded by a huge trade, with an unprecedented $80 billion of the electric car maker's stock predicted to change hands by the end of the session on Friday so their portfolios correctly reflect the index.

It would be the largest rebalancing in the history of that index.

Those funds would simultaneously have to sell other S&P 500 constituents' shares worth the same amount to accomodate Tesla's entry.

'Index managers will need to sell a large position across the other S&P 500 constituents in order to fund the addition of TSLA, which could lead to substantial impact across the entire index,' Virtu ITG Canada's head of index research, Ivan Cajic, wrote in a report this week.

In addition, Friday was also quadruple witching day, Wall Street-speak for the quarterly expiration of stock options and futures contracts, which forces traders to tie up loose ends in contracts they hold, leading to particularly heavy trading volume.

'This is an unusual day because we have Tesla entering the S&P and it´s quadruple witching day,' said Andrew Slimmon, portfolio manager at Morgan Stanley Investment Management.

Actively managed funds that benchmark their performance against the S&P 500, many of which until now have avoided investing in one of Wall Street's most controversial stocks, were forced this week to decide whether to own Tesla.

While some investors view Musk as a visionary entrepreneur, others worry about missed production targets and corporate governance risk after Musk was forced to step down as chairman to settle fraud charges in 2018.

Tesla's meteoric rise has made it the most valuable auto company in the world despite production that is a fraction of rivals such as Toyota Motor, Volkswagen and General Motors.

Its stocks have surged roughly 14,000 percent since it went public a decade ago, the New York Times reports.

According to Forbes, some analysts believe Tesla's shares could rise as high as $780.

Tesla is by far the most traded stock by value on Wall Street, with $18 billion worth of its shares exchanged on average in each session over the past 12 months, easily beating Apple, in second place with average daily trades of $14 billion, according to Refinitiv.

Apple is currently the largest holding in the S&P 500 with a weight of about 6.5 percent.

Tesla still stands well in front of Ford with 0.12 percent of the index and General Motors with a weight of 0.17 percent.

A blockbuster quarterly report in July - where the company banked $566 million - cleared a major hurdle related to profitability that had prevented Tesla's inclusion in the S&P 500.

The company has posted four straight quarters of profits despite the pandemic, the main requirement needed in order to be included in the S&P.

It was aided by its sales of regulatory credits to other automakers how don't yet hit the government requirements for annual production of EV cars.

About a fifth of Tesla's shares are closely held by Musk, the chief executive, and other insiders.

His wealth has already swelled since the S&P announcement making him the second richest person in the world worth $149billion.

The 49-year-old began the year worth $26.6billion.

Since the S&P 500 is weighted by the amount of companies' shares actually available on the stock market, Tesla's influence within the benchmark will be slightly diminished compared to its overall value.

The stock is now trading at over 170 times the average analyst estimate for Tesla's adjusted net income over the next 12 months, among the highest valuations on Wall Street.

Thirty-five analysts cover Tesla, on average rating it 'hold'. Their median price target is $424.50, which is 35 percent below Tesla's price of $655.90 on Thursday.

Nuking the anti-nuke crowd

Experts agree the tide has turned in nuclear power’s favor, but obstacles remain

Duggan Flanakin

How has the Trump Administration fared in meeting the multiple challenges that have slowed the growth of nuclear energy in the U.S. to a near-halt? And what are the prospects for nuclear energy in a Biden-Harris Administration? It’s time to nuke the anti-nuke crowd, and it seems to be happening.

It is now seventy-five years since the U.S. ended the war against Japan by dropping nuclear bombs on Hiroshima and Nagasaki (both currently thriving). Eight years later, President Eisenhower, in his world-famous “Atoms for Peace” speech before the United Nations, invited citizens to the debate over using nuclear science and technology for power generation.

President Kennedy switched the nation’s attention from nuclear to the space program but, beginning in the Nixon Administration and augmented following the 1973 oil embargo through the Three Mile Island incident in 1979, the U.S. authorized most of the 61 plants and 99 nuclear reactors still operating in 2017. As President Trump took office, the Aspen Institute issued a report stating, “Nuclear power in the U.S. is at a moment of existential crisis. If the present challenges are not addressed, the future of nuclear energy may be far less promising and superior U.S. nuclear expertise diminished.”

President Obama’s Clean Energy Plan provided funding for nuclear energy, including creating the Gateway for Accelerated Innovation in Nuclear (GAIN). In 2012, despite objections by the chairman, the Nuclear Regulatory Commission (NRC) authorized Southern Company to build and operate two new reactors at its Vogtle nuclear power plant in Georgia, the first in the USA since 1979.

The Aspen report boldly asserted that the U.S. needs a strong domestic nuclear program to maintain its exceptional competence to address safety, threat reduction, and nonproliferation issues. They courted the environmental community by noting that nuclear is a necessary component in the war against climate change, if we are to also maintain an adequate supply of affordable electricity. “A world without nuclear power,” the authors concluded, “would require an incredible – and likely unrealistic – amount of renewables to meet climate targets.”

The Aspen authors observed that Americans are generally supportive of nuclear power but concerned about nuclear waste. Worse, far too many nuclear power plants in development have broken budgets and fallen behind schedule. Given the lack of political will or a national energy crisis at the time, the authors placed their hopes on advanced reactors that use new types of coolants, operate at different pressures and temperatures, or are smaller and more modular.

Many now view nuclear waste as an overhyped, unscientific issue. In a 2019 paper, Aspen Institute trustee Bill Budinger argued that the fear of nuclear waste is largely unfounded – an issue “hugely exaggerated when we were trying to scare people away from nuclear.” The total amount of nuclear waste accumulated over the past 60 years from all U.S. nuclear power plants would fit inside a two-story building covering one city block. Unfounded fear applies to power plant radiation, as well.

Cost overruns and delays are largely the product of anti-nuclear attitudes that have driven regulation to extremes that are inappropriate for newer reactor designs.

In April 2020 President Trump unveiled his Strategy to Restore American Nuclear Energy Leadership and competitive nuclear advantage. The first step outlined in the plan is to revive and strengthen America’s uranium mining industry, support uranium conversion services, end reliance on foreign uranium enrichment, and sustain the current fleet of nuclear-powered aircraft carriers and submarines.

Other objectives include creating a Uranium Reserve, streamlining regulatory reform and land access for uranium extraction (cutting red tape), supporting the National Reactor Innovation Center and Versatile Test Reactor, demonstrating the use of Small Modular Reactors (SMRs) and micro-reactors to power federal facilities, and adding protections to prevent future uranium dumping into the U.S. market.

In November, the Associated Press reported that the Idaho National Laboratory was the Energy Department’s first choice for constructing and operating the Versatile Test Reactor (VTR). This first new test reactor built in the U.S. in decades would give the nation a dedicated “fast-neutron-spectrum” testing capability. Energy Secretary Dan Brouillette explained that the VTR “continues to be a high-priority project for DOE to ensure nuclear energy plays a role in our country’s energy portfolio.”

Meanwhile, Llewellyn King reports that an active community of entrepreneurs is promoting reactors of various designs (including molten salt modular reactors), using seed money for SMRs provided through the Obama-era GAIN program. The increase in private investment in nuclear technology and development is a strong sign that nuclear may have finally overcome the media-induced stigma resulting from Three Mile Island, Chernobyl, and Fukushima.

In reality, the Chernobyl accident happened largely because a test procedure started going wrong when senior technicians were off duty and less experienced technicians made wrong decisions that rapidly compounded the disaster, nuclear physicist Kelvin Kemm explains. Environmentalist Michael Shellenberger notes that radiation from Chernobyl “will kill at most 200 people, while the radiation from Fukushima and Three Mile will kill zero people.” Moreover, despite the fact that hundreds of thousands of women aborted their babies after the Chernobyl incident, UCLA researchers found that children born near Chernobyl had no detectable abnormalities.

Further advancing President Trump’s efforts to establish a U.S. national strategic uranium reserve, the U.S. Senate Environment and Public Works Committee recently approved a bipartisan bill, the American Nuclear Infrastructure Act (ANIA). Uranium Energy Corp CEO Amir Adnani called it “broad-reaching legislation, important for supporting the U.S. nuclear fuel industry, national security, and clean energy.”

Under ANIA, the Department of Energy may only buy uranium recovered from facilities licensed by the Nuclear Regulatory Commission or equivalent agreement state agencies; uranium from companies owned by, controlled by or subject to the jurisdiction of Russia or China would be excluded.

According to several prognosticators, the presumed Biden Administration will carry on or even accelerate Obama and Trump efforts to revitalize and prioritize U.S. nuclear energy programs. The primary difference between Trump and Biden nuclear policies, says progressive policy analyst James Conca, is that Biden’s is part of a climate change agenda, while Trump’s focus was on national security concerns.

“Leading climate scientists” say we cannot address climate change without significant nuclear power, Conca contends. So supporting nuclear power – or not – is a clear signal about how serious candidates are about manmade climate change and “how serious they are about supporting science over mere activism.” He added, “if Democrats want any clean energy plan to succeed at all, it better include nuclear.”

Washington Examiner energy reporter Josh Siegel says “Biden’s support for nuclear power … promises to be one of the rare instances of energy policy continuity between the incoming and outgoing administrations.” Democrats, he believes, finally realize that wind and solar alone are insufficient to decarbonize the power grid and are starting to give up their longstanding opposition to nuclear energy.

Of course, all this will also require a new reality-based public attitude about the risks of radiation, be it from nuclear power plants, nuclear waste storage or other sources, says energy journalist Robert Bryce.

There is one more huge caveat. Should Kamala Harris for any reason replace Biden as Commander-in-Chief, her support for nuclear power is far less assured. Asked during the 2020 Presidential campaign whether she supported nuclear energy, she replied on multiple occasions: “Yes, temporarily, while we increase investment into cleaner renewable alternatives.”

That’s not exactly a ringing endorsement, nor even an acknowledgment of the growing bipartisan energy reality. And it certainly doesn’t explain how millions of wind turbines, billions of solar panels, billions of battery modules – and massive increases in mining, metals processing and manufacturing, to build those technologies – are “clean, green, renewable or sustainable” alternatives to fossil fuels.

Via email

President-elect Biden announces climate change team

See this video:

Some comments from a reader

It is Biden boasting about putting an American Indian and more "people of colour" and women on his Biden- Harris cabinet, going to combat climate change, fires, hurricanes, droughts, floods, air pollution, build back better, creating unionized jobs, reduce electricity consumption, make more electric vehicles, re-join the Paris Agreement, have a "carbon pollution" free electricity sector by 2035

It all sounds a bit daft to me. At the end he says: "The Obama-Biden administration reduced the auto industry, shh, blu, should say rescued the auto industry"

So he will suck up to the UN, and I expect he will have union troubles, China may try to bully him like it is trying to bully Australia; General Kim will probably test him too; and I won't be surprised if America's left will resent him even more than they did Trump.

I wonder if the middle East agreements with Israel that Trump helped achieve will last?

Windfarm operators blamed for the big blackouts of 2016

Allegedly, the operators should have had in place cut-out switches etc that would have prevented the disaster, even though the storm was an exceptional event.

The real problem was the state's heavy reliance on wind after scrapping its coal-fired generators. It was the Greenie government that had no backup against rare events

A South Australian wind farm operator has been fined $1 million for contravening national electricity rules in the three years leading up to the 2016 statewide blackout.

The Australian Energy Regulator (AER) launched legal action against Snowtown Wind Farms last year and was accused of supplying power to the grid when the Australian Energy Market Operator (AEMO) had not approved it to do so.

The Federal Court today ordered the company — which has 90 wind turbines in the SA's mid north — to implement a compliance program and provide a written report to the court after six months, to ensure there is not a repeat.

Justice Richard White also ordered Snowtown Wind Farms to pay the regulator's court costs of $100,000.


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