Solar company bankrupt despite ‘win-win’ DOE loan

In keeping with the recent trend of so-called green companies going into the red, another solar energy company supported by President Obama’s top administration officials declared bankruptcy today.

Solar Trust for America received $2.1 billion in conditional loan guarantees from the Department of Energy — “the largest amount ever offered to a solar project,” according to Energy Secretary Steven Chu — for a project near Blythe, Calif., but declared bankruptcy within a year. It is unclear how much of the guarantee, if any, was actually awarded.

Senior officials in Obama’s administration had very high hopes for the Blythe project. Interior Secretary Ken Salazar attended the groundbreaking ceremony, which he described as “a historic moment in America’s new energy frontier” and “another important step in making America’s clean energy future a reality.” Chu trumpeted at the time that Solar Trust would prove that “when we rev up the great American innovation machine, we can out-compete any other nation.”

The embarrassment should be bipartisan. “This is a huge milestone for our community,” Rep. Mary Bono Mack, R-Calif., said when the company received its loan guarantee. “I look forward to continuing my work supporting projects . . . that will harness our local energy resources and help reduce our nation’s dangerous dependence on unstable foreign oil.”

Uwe Schmidt, chairman and CEO of the company, also argued that Solar Trust was good for the nation. He wrote last year that “the DOE loan guarantee is a ‘win-win’ for government and the companies involved and will not only advance the cause of energy independence but will create hundreds of thousands of jobs across the country.”

The bankruptcy makes Schmidt’s attempt to rebuke DOE critics in the wake of the Solyndra bankruptcy particuarly ironic.

“Despite the posturing and finger pointing, the American solar energy industry is alive and well,” Schmidt wrote in an op-ed for the Huffington Post, before discussing his company’s business plans. Referring to Solyndra, he lamented that “one company’s bankruptcy has cast doubt on the credibility of a government program that is otherwise being administered with incredible efficiency.”

The list of bankrupt solar companies has grown since Schmidt scolded Solyndra investigators. How many more might go bankrupt? Secretary Chu won’t say.

Justices signal possible trouble for health insurance mandate

Reporting from Washington— The Supreme Court’s conservative justices Tuesday laid into the requirement in the Obama administration’s healthcare law that Americans have health insurance, as the court began a much-anticipated second day of arguments on the controversial legislation.

Even before the administration’s top lawyer could get three minutes into his defense of the mandate, some justices accused the government of pushing for excessive authority to require Americans to buy anything.

“Are there any limits,” asked Justice Anthony Kennedy, one of three conservative justices whose votes are seen as crucial to the fate of the unprecedented insurance mandate.

PHOTOS: Demonstrations outside Supreme Court

Chief Justice John G. Roberts Jr. suggested that the government might require Americans to buy cellphones to be ready for emergencies. And Justice Antonin Scalia asked if the government might require Americans to buy broccoli or automobiles.

“If the government can do this, what else can it … do?” Scalia asked.

The tough questioning of the administration’s lawyer is no sure sign of how the justices will rule when they hand down their decision in the case, Department of Health and Human Services, et al., vs. State of Florida, et al., likely in June.

But Tuesday’s arguments may signal trouble for the mandate, widely seen as a cornerstone of the law’s program for achieving universal healthcare coverage for the first time in the nation’s history.

With the court’s four liberal justices expected to vote to uphold the sweeping law, the administration will have to win over at least one of the five justices on the court’s conservative wing.

Few believe Justices Clarence Thomas or Samuel A. Alito Jr. will support the mandate. That has made Scalia, Kennedy and Roberts the focus of intense speculation for months.

Solicitor General Donald B. Verrilli Jr. tried to argue that the insurance mandate would not open the door to other requirements to buy products because healthcare is unique.

“Virtually everyone in society is in this market,” said Verrilli, who was prodded on by Justice Ruth Bader Ginsburg and other liberal justices. That means that if someone elects not to get health insurance but then gets sick, as everyone will, that person will pass along costs to everyone else, Verrilli explained.

To prevent that, the administration has argued that that Congress can use its authority under the commerce clause of the Constitution to impose the mandate as a means to regulate health insurance.

The Constitution says Congress has the power to “regulate commerce” and to impose taxes to promote the general welfare. The court has in the past upheld federal laws regulating all manner of business — from agriculture and aviation to who can be served at the corner coffee shop — and Roberts, Scalia and Kennedy have in other cases supported the government’s broad authority in that area.

But Tuesday, the three — and Alito — repeatedly criticized the requirement to buy health insurance as forcing people to enter a market, which they said was a new and troubling use of federal power.

“That changes the relationship of the individual to the federal government,” Kennedy said.

The architects of the 2010 Patient Protection and Affordable Care Act included an insurance requirement after years of experience with insurance markets suggested that it is very difficult to guarantee health insurance to everyone, including people with preexisting medical conditions, without a way to induce younger, healthier people to get covered. That offsets the cost of insuring older, sicker ones.

Under the law, most Americans, starting in 2014, will have to get a health insurance plan that meets a basic set of standards or pay a tax penalty that will rise from $95 in 2014 to $695 in 2016. (The penalty for a family will be up to $2,085 in 2016.)

Health policy experts warn that without some incentive to get insurance, people could wait until they got seriously ill and then sign up for coverage, pushing up premiums for everyone.

The mandate was once embraced by both political parties. But more recently, it has been seized on by conservative critics of the healthcare law as an egregious example of government overreach. And it became the crux of lawsuits challenging the healthcare law by 26 states and plaintiffs represented by the conservative National Federation of Independent Business.

Over the last two years, federal courts across the country have issued conflicting rulings on the insurance requirement, though only one appellate court has backed the constitutional challenge to the law. Two high-profile conservative judges have supported the mandate.

Obamacare to cost $1.76 trillion over 10 yrs

Obama

President Obama’s national health care law will cost $1.76 trillion over a decade, according to a new projection released today by the Congressional Budget Office, rather than the $940 billion forecast when it was signed into law.

Democrats employed many accounting tricks when they were pushing through the national health care legislation, the most egregious of which was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO’s standard ten-year budget window and, at least on paper, meet Obama’s pledge that the legislation would cost “around $900 billion over 10 years.” When the final CBO score came out before passage, critics noted that the true 10 year cost would be far higher than advertised once projections accounted for full implementation.

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How America’s Wealthiest Get Rich

Want to be a billionaire? If you follow our World’s Billionaires list, you know there’s no single way to get the job done–you can get rich on energy drinks or yoga pants just as well as hedge funds.

But for those who like to read the tea leaves, we’d point out something that is probably fairly obvious to most: the tech industry is probably the best place to roll the dice.

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Apple Stock Closes At $552, Exceeds Exxon Market Cap By $100B

Apple (AAPL) stock continues to soar into the stratosphere, finally closing on Monday at $552.00 a share, which is an all-time record for the Cupertino, Calif.-based computer company. Monday’s high now puts Apple’s market cap over $514 billion, which now exceeds Exxon’s market cap — the No. 2 company, currently standing at $403 billion — by more than $100 billion.

AAPL has been a stock demon in 2012, scaring all other stocks away as it continues its ascent to the very top of the market. On Jan. 24, Apple announced its record-breaking quarter for Q1 2012, claiming $46.33 billion overall, $13.1 billion in profit and $17.5 billion in cash for the quarter that ended Dec. 31, 2011. The final 14 weeks of 2011 proved to be the most successful in Apple’s 35-year history, thanks to the release of the iPhone 4S and its voice-activated AI tool Siri, and the outpouring of sympathy following the death of the company’s co-founder and chairman, Steve Jobs.

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US trade deficit hits $52.6 billion in January

WASHINGTON (AP) — The U.S. trade deficit surged to the widest imbalance in more than three years in January as imports hit an all-time high, reflecting big demand for foreign-made cars, computers and food products.

U.S. exports to Europe fell, raising concerns that the debt crisis in that region could dampen U.S. economic growth.

The January trade deficit widened to $52.6 billion, the biggest gap since October 2008, the Commerce Department reported Friday. Imports rose 2.1 percent to a record $233.4 billion. Exports were up a smaller 1.4 percent to $180.8 billion. Exports to Europe fell 7.5 percent.

Economists are looking for the deficit this year to widen from last year’s $560 billion imbalance, reflecting in part the economic woes in Europe, which represents about 20 percent of America’s export market. A wider deficit can depress economic growth because it usually means fewer export-related jobs.
A National Association for Business Economics forecasting panel has projected that the deficit for 2012 will narrow by 4.1 percent to $535.4 billion and will edge down further to $525 billion in 2013 as growth in exports keeps pace with import increases.

The economy grew at an annual rate of 3 percent in the final three months of 2011. For all of 2011, the economy expanded by just 1.7 percent, roughly half the rate in 2010. The NABE forecasting panel expects growth to improve to 2.3 percent this year and accelerate to 2.8 percent in 2013.

In January, the politically sensitive deficit with China rose 12.5 percent to $26 billion. Last year, the deficit with China hit a record $295.5 billion, the highest deficit ever recorded with a single country.
At a time of high unemployment in the United States, political pressure is growing to impose economic sanctions on what critics see as China’s unfair trade practices such as a currency regime that keeps the yuan undervalued against the dollar, making Chinese goods cheaper in U.S. markets and American products more expensive in China.

The deficit with the 27-nation European union dropped 11.7 percent to $8.5 billion in January but that occurred because European imports fell 8.7 percent, offsetting a 7.5 percent drop in U.S. exports to Europe. Economists are worried that a severe recession in that region resulting from a prolonged debt crisis will crimp U.S. exports.

The rise in imports in January reflected a 3.3 percent increase in petroleum imports to $39.1 billion and a 10.4 percent increase in imports of autos and auto parts, which hit an all-time high of $25.3 billion. Imports of capital goods such as computers and industrial machinery also hit a record at $44.7 billion. Imports of food products also hit a record high of $9.6 billion with demand for foreign-produced fish, meat, bakery products and wine and beer all rising.

The increase in exports reflected records in several categories with exports of U.S. made cars and auto parts setting a record at $12.7 billion and exports of U.S. made capital goods, a category that includes computers, aircraft and telecommunications equipment, setting a record at $43.2 billion.

Stupid’ and Oil Prices, Obama’s Forrest Gump analysis of rising gas prices.

‘The American people aren’t stupid,” thundered President Obama yesterday in Miami, ridiculing Republicans who are blaming him for rising gasoline prices. Let’s hope he’s right, because not even Forrest Gump could believe the logic of what Mr. Obama is trying to sell.

To wit, that a) gasoline prices are beyond his control, but b) to the extent oil and gas production is rising in America, his energy policies deserve all the credit, and c) higher prices are one more reason to raise taxes on oil and gas drillers while handing even more subsidies to his friends in green energy. Where to begin?

It’s true enough that oil prices can’t be commanded from the Oval Office, so in that sense Mr. Obama’s disavowal of blame is a rare show of humility in the face of market forces. Would that he showed similar modesty in trying to command the tides of home prices, car sales (“cash for clunkers”), or the production of electric batteries.

The oil price surge has several likely sources. One is the turmoil in the Middle East, especially new fears of a supply shock from a conflict with Iran. But it’s worth recalling that Mr. Obama also blamed the last oil-price surge, in spring 2011, on the Libyan uprising. Moammar Gadhafi is now gone and Libyan oil production is coming back on stream, yet oil prices dipped only briefly below $90 a barrel and have been rising since October. Something else must be going on.

Mr. Obama yesterday blamed rising demand from the likes of Brazil and China, and there is something to that as well. But this energy demand is also not new, and if anything Chinese and Brazilian economic growth has been slowing in recent months.

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Obama: Use ‘algae’ as substitute for oil

President Obama admitted today that he does not have a “silver bullet” solution for skyrocketing gas prices, but he proposed alternative energy sources such as “a plant-like substance, algae” as a way of cutting dependence on oil by 17 percent.

“We’re making new investments in the development of gasoline, diesel, and jet fuel that’s actually made from a plant-like substance, algae — you’ve got a bunch of algae out here,” Obama said at the University of Miami today. “If we can figure out how to make energy out of that, we’ll be doing alright. Believe it or not, we could replace up to 17 percent of the oil we import for transportation with this fuel that we can grow right here in America.”

The Department of Energy (DOE) currently spends about $85 million on 30 research projects “to develop algal biofuels,” according to the White House, which announced that Obama is committing another $14 million to the idea.

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Don’t blame me for these gas prices.

President Obama does not “accept responsibility” for high gas prices, his spokesman indicated today, arguing that Obama has done everything he could to bring down the price of oil and blaming the high gas prices on oil price increases caused by global factors.

“The president accepts the responsibility that he identified the next president should accept, back in 2008, which is the need to develop a comprehensive energy policy,” White House Press Secretary Jay Carney said today when asked if Obama “accept[s] responsibility” for the high price of oil and gas. “If you’re suggesting that there is responsibility for a rise in the global price of oil, it’s certainly not because of anything he hasn’t done to expand domestic oil and gas production,” Carney added.

Asked if he believes it is fair for Americans to blame the president, Carney noted that gas price hikes are “a recurrent problem.” He added that domestic oil production is at a record high right now and that Obama has opened “millions of acres in the Gulf of Mexico” to drilling.

The conversation today stemmed from yesterday, when Carney was asked about the Keystone XL pipeline. He said that “the president did not turn down the Keystone pipeline,” arguing that Republicans prevented a full environmental review from taking place.

Florida Drivers Shelling Out Nearly $6 A Gallon At Some Gas Stations

TAMPA (CBS Tampa) — Talk about pain at the pump! Some Florida drivers are spending nearly $6 a gallon to fill up their gas tanks.

According to GasBuddy.com, motorists are shelling out $5.89 for a gallon of regular gas at a Shell station in Lake Buena Vista, topping out at $5.99 a gallon for premium. It doesn’t get better at a Suncoast Energy station in Orlando, where drivers are paying $5.79 for a gallon of regular.

“Prices over in the Disney World area are much higher than any other place in Florida,” Jessica Brady, AAA spokeswoman, told CBS Tampa, adding that people regularly complain about gas prices in that area.

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