| "Toxie" was originally composed of the mortgages on 2000 houses; it was supposed to pay out money like a municipal bond to those who purchased shares in this financial instrument (of mass destruction). I believe they also discussed the Credit Default Swap on "Toxie", where someone bet that enough of the homeowners making mortgage payments (that in sum made up the money stream/payments to "Toxie" owners) could not keep up with these mortgage payments. And that CDS was a smart bet; when the NPR reporters bought their share of "Toxie", less than 1000 of the 2000 mortgage payments that were supposed to make up Toxie's cash flow were being made. Ouch. I believe that Toxie officially died this year (= no payments made any more), but it may live again when the originator of the loan (Royal Bank of Scotland = owner of Citizens Bank = RBS) gets sued for fraud and loses, and is thus liable to pay back the bondholders of "Toxie". Unless they skip town and head back across the ocean to Scotland (they actually may now be owned by the GOVERNMENT of Great Britain...as they had the same financial flu that the U.S. had)... and try and collect from the effectively bankrupt foreign government of a rapidly impoverishing Great Britain that is replicating (via the Conservative Party takeover) Andrew Mellon's/Herbert Hoover's 1931 fiscal policies...
http://www.dailykos.com/storyo...
This was an awesome series of stories on NPR. Educational and then some. And a really nifty dKos article, too...
Anyway, instead of investing in renewable energy installations (= real things), investors were being led by the proverbial ring in their noses to the financial slaughter via offers in "secure" investments purportedly exemplified by sub-urban houses/housing developments such as the MBS investment opportunities like "Toxie". After all, what could be more secure than investing in the sub-urban housing of America?
Besides, investing in renewables in America is not for everyone - in fact, hardly anyone qualifies. And of the investment possibilities, wind power is both the most obivious (in 2009, about $20 billion of these made), biggest and besides, wind turbines also are hard to hide. And once the investment is made, they just keep jugging out electricity at a well defined annual rate. But, probably less than 2% of Americans have the required levels of PASSIVE income for ownership during the initial 10 years when the Production Tax Credit (PTC) is in effect, let alone the "tax appetite" needed to utilize the MACRS rapid depreciation (now worth about 50% MORE than the PTC, and the PTC is worth about 25% to 30% of the total investment required). But any fool could buy a slice of an MBS...odds are, in some cases, even with borrowed money! And then there were those speculation opporunities on the ever shifting value of those MBS's.... wooppie....!
But let's assume that average people COULD invest in wind farm ownership (big stretch of the imagination here). Would they be profitable? Could they be profitable in the "bond" sense, where these bonds pay some percent of the bond price for the next 20 years? After all, in the U.S., to make money on wind farm investments, you have to rack up enormous paper losses, and with those you can avoid taxes that you would otherwise have to pay. And of course, if that other taxable income does not occur, no taxes get paid, and no rebates on those taxes are possible, and so there goes the possibility of "getting" "tax income".
Anyway, under arrangements like Feed-In laws, wind farms and other renewable investments, if properly managed, can be profitable, because the income from energy sales should exceed the cost of operations (capital costs plus O&M costs) due to the known long term energy price provided to the owner (private or municipal/state) of the renewable energy generator. Otherwise, it would be a bad investment, and no banker would loan money to it, and no credit rating entity would grade it as "investment grade", right? While this would not be a prime grade SPECULATION type investment (like oil, gold, foreign exchange and corn futures, or prices of stocks, bonds and houses), it would be a steady, low risk investment. Sort of like municipal bonds are supposed to be, or like long term T-bills.
So, in preparation for Bill McKibben's talk on this Saturday in Buffalo, keep "Toxie" in mind. And imagine how the possibility of actually having the ability to invest in a wind farm that operates with sane electricity prices would have been preferable to "Toxie". And how all the capital to finance 2.5 trillion dollars or so (2.5 terabucks) in wind farms would have been preferable to a "proverbial swamp-swap in Florida", or a prime piece of desert in Nevada.
But, until we get sane electricity pricing for renewables in NY, there is very little chance for "normal" people or companies or investment clubs of investing in renewable energy. Instead, it has to exist as a charity that loses money, just like those MBS's, or as a way that the wealthy can avoid taxes that us lower income types get to pay for at some later date.
Maybe Jon Stewart can come to Buffalo and do a "rally for Energy Sanity", and maybe it will have a better result than the Rally had at the end of October.
For an example of the opportunity squandered via the likes of "Toxie", here is a file of pictures from the world's (presently, and it won't hold the title for long) biggest offshore wind farm - Thanet: http://www.flickr.com/photos/v... 100 of these 3 MW units, total installed cost about 900 million Pounds (about $1.45 billion at today's rate). All investment grade, no less.
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