sign up log in
Want to go ad-free? Find out how, here.

Bernard's Top 10 at 10: Bill Gross' US$290 mln bonus for failing; Russell Brand and the Tory landlord; Taxing carbon and the end of the world; Germany's housing solution; Dilbert

Bernard's Top 10 at 10: Bill Gross' US$290 mln bonus for failing; Russell Brand and the Tory landlord; Taxing carbon and the end of the world; Germany's housing solution; Dilbert

Here's my Top 10 items from around the Internet over the last week or so. As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz

See all previous Top 10s here.

My must read is #6 on the new technology in cars and what it could mean for motorway investment.

1. Tax carbon and the world will end - Some people (among them Tony Abbott) say the global economy can't afford to reduce carbon emissions to address climate change.

Some people said similar things before various previous moves to regulate parts of the economy to protect the environment.

Yet the world didn't end, as this chart below shows.

Now that America and China appear to be getting serious about reducing carbon emissions, perhaps a few others will take it seriously, including New Zealand.

Meanwhile, the other approach might be to say growth might actually slow if our carbon emissions continue ever upward on their current path.

Here's a reality check to the doomsayers:


2. Downton Abbey style - The Economist points out the shares of wealth going to the top 0.1% and the bottom 90% in the United States are back to the same levels seen in the 1920s. That didn't end so well.

3. Show us the rents - It's not often I link to a story in the Hoxton Gazette, but this one on a housing protest in London is worthy.

It was led by Russel Brand against a quadrupling of rents charged to those in a social housing association estate which had just been bought by a US fund manager.

This Guardian piece by Aditya Chakrabotty on how a millionaire Tory MP, Edward Benyon, was involved in the said quadrupling of rents seemed to galvanise the publicity around the protest.

It really took off when Brand got involved and the Tory MP has since backed down from his involvement at least. The bigger question is around the sale of community owned assets to private individuals driven by a profit motive.

This will be one to watch during the Government's state house sale process. Bill English says he's open to selling them to anyone, but the first in the queue will be Iwi and community housing groups. We'd do well to keep an eye on this.

Simon Collins in the NZHerald reports this morning that the number of state houses has dropped by 1,600 in the last three years as plans to build new homes has lagged behind new house sales. He cites a plan announced two years ago to build 500 new homes on a former Papakura army base, yet none have been built so far.

Here's the Hoxton Gazette:

Last week Brand – dressed as a street urchin - led them on a “Dickensian” protest around the De Beauvoir neighbourhood, pinning an eviction notice to the Benyon’s office door in Southgate Road as a crowd of 200 blocked off traffic as they shouted “Benyon out”.

They then went around the corner to Northchurch Road where Brand climbed up scaffolding outside Edward Benyon’s home and hung up a poster saying ‘social housing not social cleansing.’

In a statement issued on Thursday, Edward Benyon, whose family firm owns about 300 properties in De Beauvoir Town, said: ““New Era residents have made it clear that they do not welcome our involvement in the future of the estate. They made it clear that they wanted us to pull out, and this is what we have reluctantly decided to do.

4. The price of failure - Bill Gross, who I've quoted regularly in previous Top 10s, got paid a bonus of US$290 million in 2013 despite underperforming his peers and presiding over a massive exodus of funds from Pimco. The top 60 managers there shared in a bonus pool of US$1.5 billion.

Here's Barry Ritholz with the details of how Gross enriched himself and his fellow managers, mostly through the fall in interest rates and inflation over the last decade and the massive unconventional policy launched after the GFC:

Pimco also became the go-to company for the Federal Reserve and U.S. Treasury in many of the credit facilities used to combat the continuing economic fallout from the financial crisis. Pimco's success in the federal government's program to jumpstart consumer lending and a variety of mortgage-backed security programs added more luster to its reputation. Gross even managed to buy up lots of MBS'sbefore the Fed officially announced the programs. Shareholders of the Total Return Fund netted about $10 billion from its mortgage plays.

Beyond the sheer size of Pimco's bonuses, there are other aspects of its compensation practices that should give pause to everyone involved in institutional asset management.

For one, Pimco has been part of a publicly traded company -- Allianz -- for the past 15 years. Unbeknownst to Allianz's shareholders, employees of one of its business units have been paying themselves these extraordinarily large sums of money.

4.1 If you hire them, pay will come - This piece from Buttonwood in the Economist looks at research into executive pay in the US and finds that managers who employ remuneration consultants to recommend their pay levels and keep them are (shock, horror) paid more than those who do not ask for 'independent' advice on how much they're really, really worth.

The study looked at pay disclosures in tandem with disclosures about specialist pay consultants employed by managers, rather than general HR consultants hired by the board.

What were the results? You will be shocked, shocked to learn that your worst suspicions are confirmed. Yes, firms that hire pay consultants pay their executives 7.5% more than those who don't. Yes, companies that hung on to their multi-service consultants paid their executives 10% less than those that switched to specialist consultants. Executives who work at firms where the board hired the consultants earned 13% less than when the consultants were hired by the management themselves. When executives get a big pay rise, their companies are less likely to replace their consultants in the following year.

5. Melbourne and Sydney are hot, hot, hot - This AFR piece on the big money pouring into Sydney and Melbourne development land from Chinese investors has some interesting detail, in particular the idea that Chinese investors are much more willing to accept lower yields, for whatever reason. The end result is a boom in land prices. Sound familiar?

In an interview with The Australian Financial Review, Mr Carolan said the free trade deal would accelerate the flow of Chinese investment funds into the local property market.

“It’s a supply and demand scenario and part of that scenario is land availability. There’s a shortage of housing on the eastern seaboard and that shortage is only going to free up on the basis that land is made available,” he said. “That land availability relates to investment. And what we’re seeing is that Chinese investors have return expectations that are lower than Australian investors.

“This means that the paradigm on land price changes, because the return expectations are lower, which means that land prices go up.”

Mr Carolan said: “What we’re seeing for major sites, for example, in Sydney, is that the major bidders are almost exclusively Chinese.”

6. Do we really need to spend quite so much on motorways? - Nick Allison at NZIER has written an excellent paper on how the adoption of new smart driving technologies such as driverless cars, electric cars, congestion-reducing car-to-car communications and Uber-style ride sharing systems could reduce the need for heavy new investment in motorways that will be around in 40-50 years time.

The chart below showing how much more we invest in roads than the OECD average was an eye-opener for me.

The benefits from the new technologies will arrive well inside the 40-year planning horizon of road and rail investments we make today. The technologies have the potential to significantly affect the expected returns from these investments. We need to quantify the impacts and start taking them into account when we make transport infrastructure investment plans. We discuss below how the technologies can reduce the need for infrastructure investment by government.

The question for government is how it might best reconfigure its transport expenditure patterns to take account of the new technologies. Another question is whether it should facilitate the more rapid adoption of the technologies by consumers and thereby enable reductions in road and other infrastructure investment.

7. Is milk really that good for us? - As the world's largest milk powder exporter, New Zealand takes it for granted that all this milk we're pumping out is good for people's health.

US paediatrics professor Aaron Carroll has a few doubts in this New York Times piece.

A study published in JAMA Pediatrics this year followed almost 100,000 men and women for more than two decades. Subjects were asked to report on how much milk they had consumed as teenagers, and then they were followed to see if that was associated with a reduced chance of hip fractures later in life. It wasn’t.

A just-released study in The BMJ that followed more than 45,000 men and 61,000 women in Sweden age 39 and older had similar results. Milk consumption as adults was associated with no protection for men, and an increased risk of fractures in women. It was also associated with an increased risk of death in both sexes.

This wasn’t a randomized controlled trial, and no one should assume causality here. But there’s no association with benefits, and a significant association with harms.

Even studies that examine the nutrients in milk, trying to look for protective effects, often come up short. A 2007 meta-analysis in the American Journal of Clinical Nutrition examined high-quality studies of how calcium intake was related to fractures. The many studies of more than 200,000 people age 34 to 79 could find no link between total calcium intake and the risk of bone fractures.

8. Uber's culture problem - I love the idea of Uber and have even signed up to use it in Wellington. But the more I see of the company the less sympathy I have.

The latest flare up involved one of its executives suggesting Uber might employ private detectives to ferret out embarrassing private details about critical journalists. All very 'Dirty Politics'.

Here's Matthew Yglesias at Vox with a good summary.

Uber's business was (and is) to destroy the value of those (taxi) licenses by opening up the rides-for-hire market to a potentially unlimited supply of vehicles and drivers.

It's a perfectly good idea for the world, but you never could have gotten it off the ground by asking permission first. Even where Uber's business didn't violate existing rules, it undermined the (pernicious) purpose of those rules and rules could always be changed to exclude it. Consequently, the company benefitted enormously from a "shoot first, ask questions later" mindset.

But dispositions that are functional and useful in one context can become rancid in another. A conviction that the rules don't (or shouldn't) apply to you is fine when you're battling a taxi mogul who compares your business to ISIS. But it's extremely unattractive when you start talking about compromising customer user data for the purposes of blackmail. And it's completely insane when that kind of recklessness leads you to talk to journalists about the oppo tactics you're planning to deploy against other journalists.

9. The German solution - This Forbes article on how German councils keep house prices under control is a fascinating look at how to do things differently. House prices there are down 10% in real terms in the last 30 years.

A key to the story is that German municipal authorities consistently increase housing supply by releasing land for development on a regular basis. The ultimate driver is a  central government policy of providing financial support to municipalities based on an up-to-date and accurate count of the number of residents in each area.

The German system moreover is deliberately structured to encourage renting rather than owning. Tenants enjoy strong rights and, provided they pay their rent, are virtually immune from eviction and even from significant rent increases.

Meanwhile demand for owner occupation is curbed by German regulation. German banks, for instance, are rarely permitted to lend more than 80 percent of the value of a property, thus a would-be home buyer first needs to accumulate a deposit of at least 20 percent. To cap it all, ownership of a home is subject to a serious consumption tax, while landlords are encouraged by favorable tax treatment to maximize the availability of rental properties.

10. Totally John Oliver on US salmon cannons:

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

63 Comments

Well , lets face it , we dont do anyone any favours by giving them an "almost -for -free" state house to occupy for their lifetime .

  • It encourages a culture of expectation for which the hapless taxpayer has to put his hand in his pocket to subsidise.
  • It  reinforces a dependancy culture , and becomes very difficult to wean them from the State's teat
  • It does nothing to foster savings , which is really hard for us all to do .
  • It will ensure they never acquire any tangible assets  over their productive lives
  • It ensures that they will remain dependant on the goodwill of the state and charity , and will surely always be poor and in the lowest decile of the population

 

Up
0

You probably would need to be pretty disadvantaged to be able to qualify for a state house for life and disadvantaged in such a way that is not going to change. A state house for life would probably be about the only break you'd ever get

Up
0

1,2,5 agree, they are just different ways of expressing the one point, welfare breeds a dependency culture.

 

3,4, disagree, to qualify for a state house means they are not in a position to save anyway.  If their incomes improves, they are in a better position to save, as they are paying less than market rent.  Once their income improves to a point that 25% of their income is actually > market rate, and it has been the case for a period of time,  then i think there is a case for moving them on and giving the house to those more in need.

Up
0

If you watch one salmon-based video this year, make it John Oliver's one. Brilliant

Up
0

#1 The problem isn't whether or not we can afford to reduce carbon emissions (or alternatively suck up more), but how to go about it. Too many vested interests interfere. Carbon Credits or Carbon tax consumption type approaches will not change behaviour one iota unless every last cent from these is used to develop either alternatives or ways to absorb whatever environmentally harmful substance is being released, and again large corporations will try to profit hugely from it at every ones' expense. No one has offered a way for Brasil to reduce the destruction of the Amazon rain forest or the other major rain forests in the world or is sponsoring the creation or replacement of those forests. Indonesia continues to have the problem of its forests being replaced with palm plantations despite it being illegal. Simply put, it's that while politicians are keen to put taxes in place and make themselves richer and more powerful, there simply is no political will to provide alternatives or take real action to effect change.

Up
0

And thus we return, again, to the fact that there are too many people in the world. Reducing our number is the ONLY workable solution we have.

Up
0

Reducing the population is actually the most unworkable solution we have.  Who makes the decision of who gets culled first?  If anyone is serious about culling the population I suggest they start with themselves first.

 

The only workable solution is to figure out how to adapt/adjust our lifestyles so that we can sustain the current (and future) population.

 

http://sustainableman.org/blog/2013/12/04/is-population-growth-really-the-problem/

 

Up
0

NO-ONE gets culled, unless you count sperm as people. It is called birth control!!!!!!!!!!

Up
0

PS re the link - dream on. Why do people actually WANT a continually increasing population anyway??  Totally unworkable and a pipe dream

Up
0

Who said anything about wanting to continually increase population?

 

We have birth control.  Who do you tell to stop breeding and who gets to keep breeding?

 

Using your logic everybody should stop breeding now.  How is that a workable solution and how long to get down to a population cap of 2 billion?

Up
0

Interesting problem eh?

so this leaves what btw?

 

Up
0

Japan has a falling birth rate Germany has a falling birth rate, we have a natural falling birth rate, that is because women are educated and get to CHOOSE if and when and by how much they reproduce. The biggest problem remains where women do not have these freedoms and it is that the world needs to work on. 

The other problem we have is how to prosper without growth, but I am quite sure it can be done, I know it has to be done.

It may take some while to get back to 3 or 4 billion but at least, even if slowly,is better than us breeding to this 10 billion that some think we will get to then start falling. There is not enough resource now, if we breed to that number then we will indeed start culling each other, the old way.

I know what I would prefer we do and it is NOT leaving it to coming generations to have to bear the brunt of it all, just because we refused to get our head around it because we were too busy making money out of growth.

 

Up
0

It's more a case of children have become, because of the State and womens' demands, more expensive to raise.  Therefore it is difficult and unusual to have the sort of lifestyle choices in which having many children is affordable.

Up
0

Yes, that is in there, but not the whole reason, I would say that the reason children become more expensive is because as modern, educated women choose to have fewer, then those few children become more precious and making sure they get to adulthood becomes more of an imperitive. When women get the choice int their lives they generally choose, not to breed or to breed later and to breed fewer. A few may wish to have larger families and frankly, if every woman in the world had full control of her fertiity there would still be room for those few who did want larger familes to do so.

 

Up
0

Y'all missed it, total number in any given generation is not increasing but we now have more generations living at once. Not long ago many only just met their grandparents before they kicked off, leaving mostly 2 generations around at once, now great-nan and pop are often there.

@ 20 yrs per generation band, living to 80 now puts 4 bands in play at once. this has happened now but is unlikely to extend further so declining birth rates will see a plateau in advanced areas. Third world Pop. explosions are as a result of vastly reduced infant mortality with nil contraception to balance it, but limits on what population can be supported locally we see all the time in the heartbreaking aid begging ad's and refugee movements.

It all needs addressing, spread is poorly managed and the location of your birth and parental lottery plays the biggest part in your life.

Up
0

Actually "No one has offered a way for Brasil to reduce the destruction of the Amazon rain forest"

I think I read something a few months back that this was the case.

The thing is reallyits down to birth control and damn fast, but no one wants it, china has just stopped it..so frankly I think we are extinct, just a dead man walking.

regards

Up
0

Yes, it's true. The developed world pays the developing world not to do as it did and convert their forests to farmland.  http://www.bbc.com/news/science-environment-25060843

Up
0

At least we have the benefit of knowledge on our side now, don't we? I do not think that is an excuse to destroy what little we have left, do you?

Up
0

just sell them a better alternative.

Up
0

Well yes we may have to. Somehow or other we have to consider that there is no more land to convert from virgin forest to farmland, as there will be one day if we continue with this. To my mind better to sort this before it is too late.

If we carry on as we are it will not me or maybe even you that this directly affects, but in some way I see this as a fight from my own grave for my descendants. If we all looked ahead to that and what we are leaving behind, a few more of us might take up the fight.

It is being said in much higher places than I come from that we are on the brink of the 6th mass instinction in the history of the planet, and this one will be down to us. Do we really, really want this to be our legacy to the world? Do we?

 

Up
0

I don't - but that's why I'm anti-mass -immigration, pro ZPG, pro making governments obey private ownership legislation (eg Magna Carter), and refuse to acknowledge the sociao-corporatist State with it's total authority and zero responsibiltiy.

Up
0

#4.  paying people.  If we had an upper limit of pay in the government and local government of $200,000.00 pa,  I believe we would still have CEOs and managers of good quality.

Up
0

It is not clear from the Germany Forbes article but it is my understanding that in Germany when the Council releases land that is not a zoning thing -in Germany you have the constitutional right to build -so zoning is illegal. What the Forbes article meant by releasing land is the Council buys land (often many small holdings to get the appropriate size) by compulsory purchase at rural prices and sells it to developers/customers at cost.

 

I have read elsewhere this is the case and that in Germany typically public transport infrastructure is provided as part of this process.

 

In Germany they have the culture that stable property prices are good and it is the governments job to ensure this happens. I think that the Forbes article exagerated how hands on the Germans are. It is my understanding they have normal property developmental processes too, governmental bodies only getting involved when land or property inflation indicate they need to.

 

Compare that with NZ where the government seems to think that they are in competition with the market to sell their land holdings for the greatest amount.

Up
0

For more on #9 we had Oliver Hartwich in to talk about this last year  - http://www.interest.co.nz/property/67118/nz-initiatives-oliver-hartwich…-

The video came after I reported on this speech of Oliver's - http://www.interest.co.nz/property/66860/changing-nzs-local-govt-fundin…

Up
0

Thanks Gareth. I wish our property markets were as boring as Germany's. Macrobusiness also did a good write up on the difference between Germany and the UK property markets. Google finds it quite easily.

 

What I found amazing is that Germany consistently builds 50 hectares of greenfield land per 100,000 residents while the UK does 15 hectares. Worse the UK oscillated nearly up to 50 on occassion and down to nothing on a regular basis.

Up
0

#1 I see you've sucked in by the Chinese Bernard. "...appear to be getting serious..." - the key word there is "appear".

Remember - as you've been telling us - China gets old before it gets rich. The population peaks, the working age pop peaked in 2011, and they can only buy so many toasters. 2030 was a convenient year to select.

"It is a common belief that China’s CO2 emissions will continue to grow throughout this century and will dominate global emissions. The findings from this research suggest that this will not necessarily be the case because saturation in ownership of appliances, construction of residential and commercial floor area, roadways, railways, fertilizer use, and urbanization will peak around 2030 with slowing population growth."

So carry on as usual but get a pat on the back at the leaders forum for appearing to do something.

http://china.lbl.gov/sites/all/files/lbl-4472e-energy-2050april-2011.pdf

http://www.economist.com/news/china/21570750-first-two-articles-about-i…

And thank to cheap shale gas US emissions have been going down for years anyway so Obama is doing anything either.

As an aside on the #1 chart what year did peak oil kick in?

Up
0

Germany has a shrinking population, it lost 1.5 million people in its last census.

 

 The population decline may come as a result of one of the lowest birthrates in the world, of about 8.33 births per 1000 inhabitants

http://www.dailymail.co.uk/news/article-2398796/German-population-shrin…

 

Up
0

depends on whether the old guard will give up the capital gain.

in a falling population, the rules the old buys are used to don't apply.
you can't rely on population growth to providing ever increasing revenues, you have to rely on short life products to keep the re-buying levels up.  there has to be a focus on services and consumptions...on using laws and certifications to FORCE people to surrender their savings.

and even with all the new toys and certifications and taxes/levies/rates, you're still looking at a shrinking macro-economic pool.   It's just not ever going to be this bottomless pit of human life credit for them to use as equity, that's the problem with the modern money system -

_sorry_ thought_everyone_realised_that_obvious_point_, without the boomer style population growth, then the bank contracts that create money don't work any more.

This is because once you've sold your soul in the contract for 5, 10 30 years, that person can't be resold into more credit,  the bank can't use them to create new money (via loan contracts).  And since there's a shrinking pool of new people then that means devaluation.

So you create money via credit to businesses....but that doesn't work because businesses aren't end consumers !  Businesses must always recoup their expenses from sales to the end consumers....that shrinking pool of debt targets.

So the ones who have control can either fix the problem which I don't even think they recognise, let alone admit.  Or you make it worse by trying to drag more debt targets from anywhere  (bring me your tired, your poor).
Or you create more and more rules to force payment, more legislation, more reports, more advertising because its a hidden cost, more monitoring, more automation.  that will concentrate the small remaining parts into the "important" parts like government and the wealthy.

And you hold on to them, because with a decreasing population and you crack the dam on downselling those assets... (and you've been building your empire on leveraged sand... instead of deleveraging core assets (ie energy production, shelter and food production)....)

As I say, I'm sorry, thought the process was obvious.

PS the dumbass graphs... the economy doesn't "destroy" like a big bang bankruptcy,  Parts of it go flat, like High St next to the Malls, or the old industrial section, or a unserviced house.  the saw tooth effect come in when you need to use the asset.  When you reach out after 10 years and find that that business has been gone, and nothing useful is taking it's space.

Up
0

How to substitute 7.5 mill/annum litres of diesel using cow manure.

http://www.usatoday.com/story/news/nation/2013/04/29/cow-manure-methane…

 

Up
0

has dual uses, fertilizer also.

regards

Up
0

Actually as the Romans recorded, cow dung is actually the less valuable type of animal fertiliser.     Just thought I catch you up on the latest news.

Up
0

The same probably also applies to fuel manufacture, I assume pig poop is the better.  Pigs also then consume some of our waste as an input, cows not really.

Slightly later news, ERORI is still sucky.

 

regards

 

 

Up
0

C'mon cowboy what have the Roman's done us lately?

Sticking the manure through a digestor improves the fertiliser effectiveness and less N leaching.

As for the ER the stuff is collected anyway and the footprint of a biodigestor is smaller than an aeration pond. The extra effort to clean it and pipe it to a gas genset is minimal and the waste heat can be very  useful too. Payback is really good for a free stall barn - especially in warm climates. Headache is planning for it when the freestall goes in not tacking it on later.

Up
0

However the food has to be first produced and to feed animals, that takes a lot of fertilizer, water, land....very in-efficient.

Then the methane etc has to be converted/cleaned to a useable medium and transported.

 

regards

 

 

Up
0

No the manure is a byproduct of food production so no investment in land etc. is necessary. Simply extract the methane before irrigating on land. One extra step only.Piece of cake to remove sulphur from gas. Or don't remove it at all but change your oil more often on the gas genset. Simple stuff.

Up
0

Not really true as say much of NZ's production is grass based so with roaming cows how do you collect the manure?  So much US and EU production is barn contained using food (maize?) grown elsewhere. That food has to be harvested and transported to point of use.  Where in NZ the cows walka bout doing it for you. Then density of output and transport, are you suggesting each petrol/fuel station has a farm and processing plant like this?  like this attached to it? that would work well in an urban environment, not .  Removing sulphur etc and making it dense enough to economically transport it to point of use all add up to signifcant costs.   Then finally how much waste is there that can be actually converted to a useable fuel?  1% of the market?  5%?

What is the EROEI compared to other alternatives?

regards

 

 

 

Up
0

Steven try and think before you comment.
What is the alternative? The alternative is to spread the (poorer quality) manure on the farm. But why not extract the energy first? A biodigestor is a similar capex to a much larger standard aeration pond. You think the world is going to end so you have already invested in the genset. So for the cost of a h2s scrubber you can produce quality methane gas. There is no transport cost as you put the genset on the farm and export the electricity. There is enough energy there to pasteurise/package your milk if want. Or in the case of the link they run their trucks on it so there is a transport saving there not a cost as you state. 214 litres/cow diesel equivalent/annum to be precise not too shabby. If the farmer was going to lose money on running a truck fleet he would have just put it thru a gas genset and exported the electricity. With the price of land you are going to see more and more freestall barns in NZ so it is crazy to not generate electricty from this resource.

Up
0

you still need the aeration pond so you just doubled the effluent processing cost, and you still need scrubbers and compressors. and no the energy isn't cost effective.

Why would I see more freestall barns in NZ?  Sure the price of land is good but according to all sources oversupply of milk is currently pressing the price below cost of production.   Through in more capital to over supply even more production isn't going to work.

Up
0

You don't need the aeration pond. All the effluent goes into the biodigestor then you irrigate it as per normal but with lower nitrate load. The beauty is less earthworks than an aeration pond. You don't need a compressor if you want to generate electricity just H2S scrub and put it though a gas genset. Would having cheaper electricity than your neighbour and exported electricity to the grid not help your cost of produciton? If you're not into free stall barns this is not for you.

Up
0

Think? LOL, I see no evidence you do. No, the alternative is how else to get  fuel for the capital and labour.  So you have to change from grass fed to maize fed and all the kit that goes with it, think that is for free?  Then as I said you have to get teh output into a useable, transportable form taht you can get to a distributed market all at a price that is cheaper than anything else.

You seem to be chopping and changing as you go. Infering this is a usable fuel in a national sense from the article. But now the world is ending so you have a genset? which is free? who said the world is ending? btw.  It is going  to change, sure but end? oh boy.  So OK writing off capex as a zombie outcome? so get this for "free" hmm OK.

The point is what is the practicality and cost fo getting this methane into the tank of orgainary Joe's car and is it the cheapest way? as per the artical seemed to be imlying. For all this investment is it a worthy % of our fuel needs?

Now within the context of an on farm plant, maybe, yes, but for the capital and considerable maintainance of such a plant what about solar power? almost maintenance free over its 10~12 year life.

Free style barns? much of rural NZ has no land scarcity cost, plus you have to grow the maize instead, which takes land.

reallythis becomes a sums game, not guess work.

regards

 

 

 

Up
0

Plenty of farmer feed maize silage and other supplementary crops here - not to mention PKE -  it is not a big deal.

 

To get it useable just H2S scrub it and put it into a gas genset. Again not a big deal for an engineer like yourself.

 

Where did I imply it is a useable fuel in a nation sense? It is simply resource extraction from a by product. You were the chap that went off on the petrol station strawman tangent. If you don't want to use it as a transport fuel use it to generate electricity instead. Clearly the guy in the States found it more efficent to use it as a trasport fuel.

 

You are forever telling us the world is going to hell in a handbasket. Peak oil and all that... Nice to see you have modified to a +/-5 years time horizon now.

 

The problem with solar power is that it is intermittent and not easy to run heavy equipment with it. In this case you, to a certain extent, can use the digestor as your battery, save the gas up when you don't need it. It's a 24/7 energy source not a 6 hour summertime energy source.

 

You don't need any more land to grow maize silage - in fact you could argue you would use less land because the cows are more efficient in a free stall system, the fertiliser is spread more evenly so you don't get nitrate burn and the fertiliser is better quality than raw manure. In a grazing system 1/4 of the paddock can be too rank for the cow to eat due to urine/manure patches.

 

 

Up
0

cows are less efficient in the free stall system.
it the density of population which makes up for it.

To have the fertiliser spread more even, then someone has to have capex to do it - which means wages for the person doing the job, and an entire truck to pay for if you're going to using a muck flinger.  

Or you could go for one of those large Dutch effluent tractor trucks...if so, I'd like to see your stock level (using current payout profits & interest rates) for breakeven information for what it would take to pay off that machine alone.  For your example, start with a demonstration value of 300 cows which is a reasonable average NZ farm.   I think that tractor unit was around $350,000 landed in NZ.  I look forward to your numbers.

Up
0

You source the loans and put in the gear here.

I'll give you the returns.

Money --- mouth.

I've done the research since I was looking at doing it.  You can either learn from people who are doing this stuff, or take your willing gleeful ignorance elsewhere. OR put your money where your mouth is.

Up
0

It wouldn't work for you as your need a free stall system and you don't seem keen on that system. 300 cows is too small scale. Clearly works for the chap in the states so don't write it off because it doesn't match your chosen farming system.

Up
0

The barns come out twice as effective, because the bovine passes 66% of inputs.
Put in higher energy feeds, then the effectiveness of digester systems improve.

However, with the cost of payout, being able to justify the Capex for barn, disgester and higher energy feed is impossible.

Also such systems normally require high volume and low water, which means only huge herds, and extra screening mesh/processes.   And what can you use it for?  Space/volume heating is best done with solar, PV, and heat transfer from milk chilling process.
 Pumping is too critical, so you'd have to work out your active cycle, to see if the storage and generation is worth it.
  It isn't commercial economical to convert vehicles, as most would be just as cost effective to convert to battery or biodiesil/oils as it would to try and capture the low energy density gas.

Up
0

"However, with the cost of payout, being able to justify the Capex for barn, disgester and higher energy feed is impossible."

Which really is the TCO / energy cost.  In terms of twice as effective you have to take in the total system. So not just the barn, but all the land and energy to grow the maize and then transport it to the barn, plus some profit margins along the way. for the farmer growing teh maize, transport company, middle men etc.  V grass fed cows/animals and their output which it seems are cheaper than barn output, if NZ's advantage is anything true.

regards

 

 

 

Up
0

I foudn that -if- I had 900 cows AND put them on a feed pad at least 12 hours a day.  (and had basic modern effluent handling systems already in place).

Putting in a sealed digester (to stop methane and other gases escaping), making sure it was warm, but had cooling system to keep it at the correct temperature for the methanogenic bacteria, AND had sand/stone/lime/plastics/flax-leaf removal equipment, and some sort of water reduction system.   And trap and move the gases (can't just use #8 wire and old bits of alkathene (LDPE)) to where it can be organic matter scrubbed, moisture scrubbed, sulphide scrubbed, CO and ammonia scrubbed, then compressed for storage, and put in storage bottles....

With staff that find it a challenge not to shove their bare hand into bags of unlabelled chemicals...

And engineers that can't even get a UV filtration system spec'd capable of doing 200 litre/hr

And sparkies that wire the opposite poles of a switch to an alarm and leave the common unconnected.

And I'm going to pay for it at $5.30/kgMS, NetProfit <  ($190) / hectare, with all risks at the farmer for health, safety and compliance.   A fund it with 100% debt at 7.5 - 9% interest ?

Or stick with what I'm doing, and hire less staff, buy in less "experts", keep less calves, to keep out of the red for another year.

 

Up
0

Maybe let profile do a  turnkey investment.

He does it all, buys the cow's output off you, though he collects it by whatever method he chooses a t his expense (net land rental and any other costs his plant occupies of course) and exports the profit keeping the net for himself.

Bound to go well for him.

regards

 

 

 

Up
0

Oh I often propose that such technology/project promoters do such things, including Fonterra and QCONZ....  I know this will surprise you but I have yet to hav any of them take up the offer !   Most just shut up and find someone else who will listen to their theories.

...and don't get me wrong = when the farm comes up to proper levels of return (>7% yield) and I've got the loans squared away,  I'm all for doing hobby projects like that.  I love doing that stuff.  But to do it, got to have the bucket loads of interest free cash to pour into it, and not expect back.

Up
0

You can use it with a flushing system cow barn so low water not correct.

It was economic for the guy in the States to convert his vehicles and obviously it a better bet for him than to just generate electricity. 

it's all been done - it's nothing new.

 

Up
0

You need to do more research into who the guy is.
IIRC his brother is an engineer and they own shares in a company that handles equipment supplies.

Sure it's economic when you get it all for free, and get your expertise and equipment free, and get double the payout we get in NZ.      Just because it was possible there, doesn't make it viable here.

One US chap I was looking into put his entire house and vehicle on PV batteries back in 1998.  Talked to one of the people involved in the project... turns out was an employee, the company made electric wheelchairs, and had been working on modern batteries for lighter electric wheel chairs, so the company bought a entire container of batteries for him to play with.   Such projects like that make the journalists articles, -because- they're not possible in most cases.    Same as when you read many trade mags and it's got someone using fancy new kit, and it's all ooh aah...  then after a while you notice... they get sponsorship deals, they often have family or old ties back to the suppliers, and almost everytime to photos and articles are done when the system is first installed or commissioned...before they have time to spot the faults.

Up
0

About $3.65 for 600ml at the supermarket for Lewis Road Creamery organic pasteurized milk - no PKE. I am very happy to pay that, as it is yummy. That may suggest something to you.

Up
0

chicken was better.
goat surprisingly good.
horse needed diluting.

Up
0

Bernard - I'm not sure your paragraph and graphic really mesh.  Your article is obviously rooted in your class warfare & ill will, but the graphic sort of undercuts the theme you are trying to paint (which is that Pimco employees are overpaid).  The graphic shows that Pimco employees are 5x more productive than even Goldman Sachs (whose employes generate about 15x more revenue than the broader average across all industries).  Surely on average Pimco employees should and would demand to earn more as well.  I dont understand all the ins and outs of why he awarded the bonus but it probably has more to do with contractual exit clauses exit, so not a performance bonus.  And you paint him as a failure which is also disengenious and you know it.  You focus on one sliver of his otherwise industry leading career which isnt really fair.

 

By way of analogy, it would be like someone rubbish your entire career on account of your imminent house price flashcrash warning which didnt eventuate. 

 

Up
0

They dont actually produce anything, they are just better parasites.

regards

Up
0

I dont think BH said imminent btw...he pointed out the long term risks/trends from various factors like demographics.

regards

 

Up
0

Yes he did. In 2007 he made the widely published claim that New Zealand house prices would fall 30% within 3 years. He then traded on articles like "Ten Reasons House Prices Will Fall 30%....." for months. By 2010, when it became obvious he had got it completely wrong he manned up and admitted it. He was even seen at the Gables Tavern with a humble pie to publicly consume. (True).

You steven, said at the time that prices would fall by 60%. The posts are all still there. People who were smart enough to pick you as the ultimate contrarian indicator have made a fortune, as prices have subsequently risen 60% in many places.

I suspect that the current oversupply in the oil market, which shows every sign of continuing for several years, is a result of your many predictions that overall production would be in steep decline by now. At least you got it right on inflation and gold, so there is some hope for you.

Up
0

You misquote me. I said at the time I expect that as we were and still are in a x2 bubble and that when a bubble bursts it undershoot.  I also think this is a longer term view and not at the time  within 3 years.  Then there is the demographic hurdle, the younger generation are less are earning less, have more debt and will be in an economy that will be declining.  Yet the BBs will be demanding more OAP services, that has to be via debt or tax. All this adds up to there being less ability to pay the present high prices let alone higher prices . That indeed makes me think a 60%~75% fall is still going to happen over the next 2 ~3 decades. Look at those falls in the USA, 30% yes NZ dodged that bullet for now.

So peak oil will happen and happen within 5 years. The mountians of debt add up to a un-payable call on that future with less energy.  So you think house prices will just carry on? good luck with that bet.

Oil supply, yes look at that oil supply, in mbpd, its not up significantly (like 10+mbpd) its pretty flat, +/- 1 or 2 mbpd suggesting too much oil on the market.  If we really had over-supply driving done the price (where is the evidence of this being shoipped btw?). Also the drop is very fast and hasnt been matched with a similar fast spike in supply. So where is the cause and effect match?  Ergo the price drop is indicating lack of demand and that seems to point at developing nations like china, though the EU seems to be looking more and more at recession every day).  Since our global economy needs oil to do things and demand is down, it must not be doing them, that speaks slowdown and recession.

Oil, to start with, peak oil refers to conventional and cheap crude oil.

So for me the present collapse in oil price is one of lack of demand, it is having some effects on a) future oil production. b) world-politics stability. For a) that means the unconventianal and new convention oil deveopment will slow, maybe even all but cease.  If that happens that means we'll see a drop in production sooner and larger.

Gold, well gold was a classic tulip mania bubble with bets on bigger fools and inflation...

Inflation, dont fear it IMHO, some isnt bad and it can be controlled, fear deflation.

PS,  thanks for making me think, review and claify that thought, however I still see the outcome  as the same, just delayed a little which will make it bigger BTW.

regards

 

 

 

Up
0

Regarding Item 7, it is a waste of time drinking milk to get calcium. Magnesium is what you need, the body transmutes it to calcium. Silica is also good and is likewise transmuted. Direct intake of calcium is not assimilated to the body. Look up Prof Louis Kervran.

Up
0

the body cannot transmute elements.     Looks like the education system ripped us off again.

Magnesium very high in milk, hence the need to suppliment cows during spring or they die from hypomagnesia (aka grass staggers).

That is one of the reasons drinking milk is good because it is high in calcium and magnesium, often mixed with proteins and fats which assist in the retention.   What you really have to be careful of though, is gluten.  

Gluten, especially in modern wheats, does significant damage to the filia in the gut, and the stickiness and moisture trapping properties in the Gluten and gluten related compounds cause wounding and cell damage along the alimentary channels as it tries to drag what is basically _glue_ past all the fine hairlike filaments in the gut.   this frequently results in white cell action and antibody reactions on the intestine wall, making digestion of other foods difficult and sensitive.   Adding fibre appears to help the movement, but doesn't reduce the damage.    the absorption of dairy and fats is adversely effected as well, sometimes lead to such poor absorption that the body can't transfer the fats and proteins before it gets to the large intestine/bowel.
 Sadly gluten is addictive, as is the "full" feel it creates through the irritation.
 

Up
0

#7 was the calibration factors done for physical lifestyle??
Your bones won't build up extra material if you sitting in an office or doing light social activities.   There is no reason for it to fill in the honeycomb spaces and go for higher density unless there is hard work, lifting or most effectively impact.

- - 
human race you are really starting to disappoint.

WhyTF would your bones and body magically decide on its own to start storing calcium for decades in the future if it doesn't have a reason to?  Lamark-ian evolution is well disproven, and the vestiges of religious superstition !!!

Up
0

#7 was the calibration factors done for physical lifestyle??
Your bones won't build up extra material if you sitting in an office or doing light social activities.   There is no reason for it to fill in the honeycomb spaces and go for higher density unless there is hard work, lifting or most effectively impact.

- - 
human race you are really starting to disappoint.

WhyTF would your bones and body magically decide on its own to start storing calcium for decades in the future if it doesn't have a reason to?  Lamark-ian evolution is well disproven, and the vestiges of religious superstition !!!

Up
0