Saturday, August 30, 2008

Merrill Lynch publishes letters, papers on environmental sustainability; more on Sarah Palin

Merrill Lynch this morning has a letter to its own account holders called “Smart Solutions” discussing the viability of “green-based” investing, probably of the kind that would please Al Gore, Leonardo DiCaprio and Oprah Winfrey! The https link is here but may be available only to Merrill Lynch account holders. However, Merrill Lynch has a public PDF report “Environmental Sustainability Framework” link here.

The report quotes Colbert Narcisse, Merrill Lynch's Chief Operating Officer, Americas Investment Banking, as saying that the investment bank has made strategic investments in a number of companies that will benefit from sharply increased demand for renewable resources. Peter Stamos (Sterling Stamos Capital Management) compares this to the computer “gold rush” in the early days of personal computers --- like the early 80’s – when PC’s and minis would gradually move into mainstream commercial information technology, while consumers would experience the revolution starting with dial-up user groups, leading to email, then the full World Wide Web, and Peer-to-Peer. A similar progression will occur with renewable energy. Possibly T. Boone Pickens could be right, and that natural gas would provide a bridge step.

States like California are passing “renewable portfolio standards” meaning that utilities must meet specified targets of percentages of electricity from renewable sources by given dates.

The naming of Sarah Palin as John McCain’s vice-president running mate suggests a focused attention on energy, since Alaska is “the” big oil producing state now. Palin favors opening the wildlife refugee to exploration, and her husband works in the oil industry. The overall trend in the investment community and more “responsible” conservative circles is to predicate favorable treatment of oil companies on their interest in new drilling in investment rather than just in buying back stock or paying big dividends. Palin’s selection could send that signal. This may be a good place to mention the political oracle Adam Brickley and his blog that promoted Paley (“We Did It!), here. Note that Barack Obama backed off attacking the tax breaks for oil companies in his acceptance speech (wise), but his television ads still do so.

As I said repeatedly, we need to do everything. Develop renewable sources, build efficient cars on alternate sources, and we need to drill for hard-to-reach oil.

We’ll have to watch the effect of Hurricane Gustav on the oil platforms in the Gulf carefully in the next few days.

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