Container farmers

Ian Brown and David Pendergast founded Agora Greens in the beginning of 2016 and quickly began building a successful business growing fresh produce year-round in Walpole, Massachusetts. Using the Leafy Green Machine, the two grow a variety of lettuces, herbs and specialty greens for local restaurants, country clubs and farmers markets.  Here is a direct video link to an interview with them.

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Vertical, container farming: the time has come

Converted shipping containers about the size of a standard one-car garage, can produce the same amount of crops as two acres of outdoor farmland with a fraction of the water usage (ie.,10 gallons of recycled water a day). Powered by LED lights systems are now being transitioned to on site solar power systems.

Computers and sensors in the growing beds, help monitor everything from oxygen level to the humidity, and if the crop needs a particular tropical or northeastern climate, the farmer can control that too.

This is what smart local, fresh, healthy, low environmental impact food looks like.  See Kimbal Musk is running a shipping container farm compound in New York City:

“Square Roots hopes to expand to 20 cities by 2020. “Today’s consumer wants to know they are supporting companies that are doing something good for the world,” Peggs said. “This not just a Brooklyn foodie trend.”

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Oil racing against end of the ICE-age

The U$ has slumped on increasing Trump lumps the past month–no health care rewrite, no imminent tax code overhaul, and that debt ceiling is back.  This has spurred some strength in the price of crude and its handmaiden the Canadian dollar (CAD/USD index chart below).  It seems likely that both of these short-term rebounds are due for reversal.

As shown below, crude prices traded in a long term channel between $10 and $38 a barrel from the late 1970’s into the early-2000’s, when China joined the World Trade Organization and bankers spread their magical debt securitization model from the smoking remains of Enron and Worldcom in 2001, to companies and economies all around the world.  This enabled the build of toxic debt that fueled the western consumption bubble and China growth explosion into 2007, before it all imploded in 2008, prompting the Central Bank liquidity mayhem we have seen bubbling up in assets and related services since.  But as central banks began their efforts to back out of unsustainable measures since 2015, the price of crude responded with a trip back to the $40’s even as OPEC has cut output and talked up their hoped for needed Aramco IPO.  The historical norm of a $10-20 a barrel range (green band below) continues to beckon.


The same Fed-induced liquidity that has billowed asset bubbles and unduly enriched bankers the past decade, has also inadvertently helped to fuel a transportation and energy tech revolution which has moved from near zero to 60 to the shock of the ICE (Internal combustion engine) industry.

As shown in the box above, the current pace of EV (electric vehicle) adoption is moving at an annualized growth rate of 60%.  At this rate, EV’s alone (not to mention all the other energy and increased efficiency innovations across a multitude of key sectors) are on track to displace 2 million barrels a day of world oil demand within 5 years.  It could well happen faster, as Moore’s Law continues to surprise and week after week car companies scramble to catch the EV wave.  See the latest:  Porsche may ditch diesel engines: CEO:

Counting on growing demand for high-end electric cars, Porsche may spawn another zero-emission model off the Mission E platform, for which it plans an initial capacity of about 20,000 cars at its Zuffenhausen factory, Blume said. An electrified version of the top-selling Macan SUV is also possible.

“We expect the metropolises in China and Asia will switch to pure electric mobility very fast,” the CEO said. “I believe there will be few pure combustion engines to be seen in the large cities there in five years time. The development in rural areas will, however, proceed much more slowly.”

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Equity ‘strategists’ selling financial pain to the gullible

Every cycle, a parade of fresh-faced financial analysts salespeople are commissioned to keep the gullible masses buying ‘investment’ products against all odds.

Last week, Kate Moore–who began her sell-side career with Bank of America Merrill Lynch in November 2009, before moving up the ranks at JP Morgan in 2013, and to Chief Equity ‘Strategist’ for BlackRock in 2016–explained why she thinks everyone should just stop worrying and buy equities.  As usual, the subtitle should be:  Stop worrying about your life savings damn it, we have perpetually escalating sales targets to hit here people! I have a bonus to make!

It’s worth noting that starting in 1988 as a risk management and fixed income institutional asset manager, BlackRock founders sold the company to the stock market in 1999 just as central banks began the past 17 years of pumping ‘free’ money into markets.  Good timing for them.

Today BlackRock is the largest ‘long always’ fund co in the world with $5.4 trillion in assets under management and 70 offices in 30 countries. So long as no one blinks and assets keep going up forever, all is golden.  There’s just one problem with that…

As shown in the chart above, stock valuations are now second only to the all time largest bubble–before collapse–in 2000, and worse than the peak of 1929.

And as shown below in this chart of the S&P 500 in blue, those holding stocks today have borrowed the most margin debt (in red) to buy those securities than at any time in history–far worse than the previous speculative peaks of 2000 and 2007.


As the blue line mean reverts, margin calls will demand liquidation and market gains since at least the late ’90’s are likely to be vaporized.  At that point, Kate and all the other long-always cohorts will be looking for new jobs, new careers, new callings, just as they were in the last 2 bear markets.  Those who bought the industry sales pitch will be left suffering the losses.

 

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Danielle on This week in Money

Danielle was the second guest with Jim Goddard on This week in Money, talking about recent developments in the world economy and markets.  You can listen to an audio clip of the segment here starting at 8:15 on the playbar. Here is a direct audio link.

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Doing math before we buy a vehicle

This clip offers a couple of sound points when considering the purchase of a personal vehicle [and investments for that matter]–to wit:  “Don’t let a salesperson tell you what a good purchase is,” and if you can’t afford to pay off the vehicle within 3 to 4 years max, you cannot afford to buy it.  Here is a direct video link.

Most of all though, it is important to consider that individual vehicle ownership (‘IO’) is on its way out.  On demand transport as a service is expected to provide 95% of passenger miles within the next 14 years (and this assumes 20-25% of rural users may not be able to adopt by then).  See all the details in the report Rethinking Transportation 2020-2030.

This means new vehicle sales are likely to drop by 70% by 2030 and the supply of superfluous used cars will push their resale values toward zero.  Owners may have to pay to get rid of them and recycle the parts.

Today even paid-for vehicles cost their individual owners an average of $9,000 a year in owner/operator expenses (fuel, insurance, maintenance, parking, licensing and repairs) while the vehicles are used just 4% of the time (sitting idle 96%).  In most cases, this makes for a very expensive waste of precious capital and keeps us from directing cash flow to other more productive pursuits like debt-reduction and saving.

Cost-effective transport on demand is already available in most places through services like Uber and Lyft. If you have not tried it yet you should download the app to your phone and try it without delay.  Not to mention trains, buses, taxis, bicycles (!) and periodic short-term rentals where needed.  The cost savings over individual ownership are huge and much needed to help restore financial viability and efficient allocation of finite resources.

Bottom line:  before buying a vehicle today, it is more critical than ever to do some math.

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