"Affordable Health Care?" Is that Similar to His Idea of "Affordable Mortgages?"

Watch the entire video for an entertaining, brief, and enlightening synopsis of the gang that took a left-handed sledgehammer to the world economy. This gang wants you to re-elect them all, and elevate "Dear Leader" to the head honcho position, so that he can finish the demolition. Are you stupid enough to do it? They think you are.

Markets begin to discount Obamanation

Obamanation: Rule by Thugocracy

Update: The "Hispanic Connection" underlying the housing bubble and credit meltdown

Venture Capitalists Optimistic in 2008

Venture capitalists are a different breed from the average work-a-day professional and craftstman. Venture capitalists are big money gamblers with a method to their madness. They are professional seers who put their money on the visions they foresee. And in 2008, venture capitalists are looking up.

Four out of five VCs said they expect improving returns in the next five to 10 years. And in the near term, VCs say they expect to raise money at a faster pace even as worries grow that the economic slowdown could become a recession. The net effect: There will be fewer firms, but they will manage larger funds. The market for initial public offerings will continue to improve, most VCs said.

... Investments will increase, VCs say, because of heightened interest in the capital-intensive clean-tech and life-science industries, both of which are perceived to be on the cusp of breakthroughs. Another factor is the accelerating effects of globalization, VCs say.

These industries "will not be exclusively U.S.-based, but have a worldwide platform which will require more time and more capital than ever before," said Mark Heesen, president of the NVCA, which represents about 400 venture and private equity firms. "That said, the other end of the spectrum - seed and early-stage investment and smaller, regionally focused firms - will also be very active, particularly in the Internet and new media spaces."

But for VCs, the global expansion is also causing some hesitation. The survey revealed some skepticism among VCs about the quality of investment opportunities in some developing regions. Twenty-eight percent said they are hesitant about investing more money into China, and 37 percent said they are leery of South America. Eastern Europe raised concern for 17 percent of the venture capitalists surveyed.

... Another reason for bullish attitudes: VCs and the limited partners whose money they invest - pension funds, foundations, university endowments, wealthy individuals and families - are increasingly confident that the tech industry has worked through the lingering effects of the boom-and-bust, which cost investors hundreds of millions of dollars.

Those losses are a prime reason why several venture firms are expected to close shop in 2008. Contrary to the popular image of VCs raking in regular jackpots, the performance of firms varies widely. An NVCA-sponsored report found that the average return on all U.S. venture funding in the five years ending June 30, 2007, was only 4.6 percent, albeit with a stronger showing in the most recent years. The 10-year return, however, was a strong 19 percent - conforming to a history that keeps investors funneling money to VCs.

Source

Of course there are VCs who are in the doldrums--pessimistic. They probably lost more bets than they won recently, and have not shaken it off yet. A VC has to be an optimist to stay in the game.

Given the distinctively unproductive and dysfunctional direction much government sponsored and foundation-sponsored research is heading, we will very much need the contribution of VC funded startups and enterprises in the near to medium future.

Driving the Future: Market vs. Incentive Prizes vs. Government Funding

A better world is waiting for some important breakthroughs in science and technology. Take the space program: NASA is neglecting its space programs, and building a bureaucratic infrastructure devoted to climate change. It is up to private entrepreneurs, X Prizes, venture capitalists, and well-endowed visionaries to push space technology out of its government-financed dead end.

What about medical research?

More than two-thirds of Nobel Prizes in medicine have been awarded to scientists who conceived their award-winning ideas when they were younger than 40. In contrast, the average investigator is now 42 years old when she receives her first independent NIH grant, and NIH grants are typically given to safe, incremental research. This year, only a few million dollars out of the NIH’s $29 Billion budget will be directed to young investigators pursuing high risk, high reward research.

Funding young people to pursue high risk, high reward, opportunities is the basis of venture capital. Over many decades, venture capitalists have learned that the only way to successfully fund potentially game changing ideas is to ignore the percentage of attempts that succeed (“batting average”) and rather focus on trying to hit home runs to optimize portfolio value. Similarly the best way to fund research that has the potential to truly make a difference is to be willing to see the vast majority of funded projects not succeed.

Source

Establishment science--government and foundation supported science, increasingly lacks the home-run potential that is needed. Clone-mind thinking dominates government bureaucracies like the NIH, and large foundations. That is not the type of thinking that is capable of leading. It is strictly a clone-committe-mind. We need better.

Venture capitalists, incentive prizes, and other non-governmental forms of financing allow funds to get to the dark horse candidates, the sleepers. Government and foundation grants and contracts typically go to the "committee-conservative" ideas. Government and foundation bureaucratic decision making has created the climate change monstrosity that diverts huge chunks of the world's resources to chase phantoms residing in the minds of a few powerful but deluded men.

Trillions of dollars are going to waste worldwide, mired in the futile and destructive residue of human power-seeking. The US, in its self-proclaimed role as the world's hegemon and guaranteer of trade routes, is trying to take care of the entire world's needs, as they are perceived, and wastes many hundreds of billions. China and Russia are mired in their own dreams of hegemony and corruption--and waste many hundreds of billions there.

The future of humanity depends upon a clearer vision than appears to exist at the upper levels of governmental, intergovernmental, and non-governmental organisations.

Free markets are not perfect, but compared to decisions made by bureaucratic drones, the market performs well.

The Manhattan Project was a desperate, wartime throw of the dice. It worked. It had to work quickly, and no expense was spared. That kind of power to manipulate resources is far more likely to be misused and abused, than used well, in almost all circumstances. Far more breakthroughs have come from the solitary thinker or researcher, or a small group of collaborators, than from government sponsored mega-projects.

Carnival of Space 36 at Cat Dynamics

One of the best recent Carnivals of Space is being hosted at Dynamics of Cats blog. Among the many excellent entries, one posting that particularly caught my eye was: the Air Launched Single Stage to Orbit.

Staging is one of the single highest risks of failure for existing launch vehicles. Additionally, with a TSTO, now you're really designing three vehicles, not just one. A first stage, an upper stage, and a combined entity. You now have to come up with abort modes for all the different configurations.

Probably one of the biggest headaches for TSTOs is how to recover and reuse the first stage. Getting to orbit is only a little bit about going up, and mostly about hurtling yourself sideways fast enough to "throw yourself at the ground and continually miss". Doing so entails gathering quite a bit of horizontal velocity with a first stage, which means that the first stage gets quite a bit of horizontal distance between it and the launch site by the time it releases the upper stage....

Starting, as SpaceShipOne did, at a reasonable altitude gives several distinct advantages over ground launch (the following list comes from Dan DeLong, with some thoughts from me [in brackets]):

1. The airplane carrier contributes to the overall altitude and velocity...
2. Meteorological uncertainties are mostly below launch altitude. Propellant reserves can thus be less....
3. Total integrated aerodynamic drag losses are less, as the launch is above much of the atmosphere....
4. Max Q is less, which reduces structural mass, and may allow lower density thermal insulation....
5. Engine average Isp is increased because the atmospheric back-pressure effect affects a smaller fraction of the trajectory....
6. Engine expansion ratio (non-variable geometry assumed) can be greater because overexpansion is less problematical....
7. Wing area can be smaller because the wings do not need to lift the gross weight at low subsonic speed. Air launch Q is greater than runway rotation Q.
8. Wing airfoil shape need not be designed to work well at high gross weight and low subsonic speeds.
9. Wing bending structure need not be designed for gross weight takeoffs or gust loads....
10. Thrust/weight ratio can be smaller because the low initial trajectory angle does not have large gravity losses. This allows a smaller engine, propellant feed, and thrust structure mass fraction. I found 1.25 at release to be about optimum. This is a bigger advantage in air launching because total integrated aerodynamic drag losses are less and the trajectory need not get the orbiter out of the thick stuff as fast....
11. The lower mass/(total planform area) yields lower entry temperatures. I assumed inconel foil stretched over fibrous blanket insulation for much of the vehicle undersurface. Titanium over blankets, or no insulation worked on the top surface. Payload bay doors peaked at 185 F....
12. Mission flexibility is greater.... The ability to move the launch point also potentially opens up longer launch windows. Lastly, being able to move the launch point allows options like operating out of an airport closer to "civilization" while still launching out of an area with low population density, like say over an ocean or a desert...
13. landing gear for an air-launched SSTO can be designed based on landing weight instead of takeoff weight. This is a big deal for SSTO designs.

Selenian Boondocks

Affordable access to space is the main obstacle to the coming "space rush." The inner solar system (from the asteroids inward) contains material wealth beyond human imagination. But more important, space--like the oceans, the polar regions, and the seafloor--represents a new frontier. Humans desperately need frontiers in order to express one of their most endearing characteristics--the ability to solve existential problems while being stressed beyond reason by the conditions at hand.

The die.off generation--represented prominently within the Peak Oil, CAGW, and Population Crisis camps--wishes to return to a stone age Earth with a population of a hundred million or so humans, maximum. You may already be an unwitting member of the Human Extinction Movement. If so, you will wish to hurry over to one of the two links above without delay. For the rest, who actually have the gumption to face existential problems head-on, it is never too early to begin working.

Hat tip: Brian Wang

Is Desalination Affordable?

The answer to that question depends upon what you can afford. EcoWorld has an interesting article on the question of affordable desalination. They even provide an online spreadsheet so everyone can crunch the numbers.

Different types of desalination entail different costs. Solar desalination, which is used for the Ecoworld calculations above, is one set of approaches. This online desalination reference discusses different desalination projects in California as of the 1990s.

Some relatively affluent countries, such as Australia and Israel, are forced to include desalination as part of an overall water strategy. Many Persian Gulf nations also utilise desalination.

Desalination by any method is expensive--due to energy costs. Nano-filters may eventually slash the costs by 75% or more. As photovoltaic costs come down, combining nano-filters with PV electric pumps will allow arid coastal regions in the mid to low latitudes more affordable desalinated fresh water. Even without improved electric storage, daytime-only production can be ample. If improved storage is available, 24 hour production should reduce overall costs eventually.

Cellulosic Butanol: The Smart Biofuel

It is becoming obvious that corn (maize) ethanol is not a good approach to biofuels. Besides driving up the world price of maize--making many foods less affordable to consumers--and taking up food croplands for growing fuel, the energy yield from maize ethanol simply does not make sense. Fortunately for biofuels, spending on biofuel research has risen to unprecedented levels.

Even better, much of the spending is for projects that actually make sense on many levels. One sensible approach to biofuels, is using genetic engineering to modify micro-organisms to produce butanol from biomass cellulose/lignin.

Researchers at the UCLA Henry Samueli School of Engineering and Applied Science have developed a new method for producing next-generation biofuels by genetically modifying Escherichia coli bacteria to be an efficient biofuel synthesizer. The method could lead to mass production of these biofuels.

The strategy, developed by UCLA professor of chemical and biomolecular engineering James Liao, postdoctoral fellow Shota Atsumi and visiting professor Taizo Hanai, appears in the Jan. 3 issue of the journal Nature....Higher-chain alcohols have energy densities close to gasoline, are not as volatile or corrosive as ethanol, and do not readily absorb water. Furthermore, branched-chain alcohols, such as isobutanol, have higher-octane numbers, resulting in less knocking in engines. Isobutanol or C5 alcohols have never been produced from a renewable source with yields high enough to make them viable as a gasoline substitute.

"These alcohols are typically trace byproducts in fermentation," Liao said. "To modify an organism to produce these compounds usually results in toxicity in the cell. We bypassed this difficulty by leveraging the native metabolic networks in E. coli but altered its intracellular chemistry using genetic engineering to produce these alcohols."

The research team modified key pathways in E. coli to produce several higher-chain alcohols from glucose, a renewable carbon source, including isobutanol, 1-butanol, 2-methyl-1-butanol, 3-methyl-1-butanol and 2-phenylethanol.

This strategy leverages the E. coli host's highly active amino acid biosynthetic pathway by shifting part of it to alcohol production. In particular, the research team achieved high-yield, high-specificity production of isobutanol from glucose.

NextEnergy

UCLA has granted a license for this technology to Gevo.

Achieving a high yield of iso-butanol from glucose is the second step in renewable biofuel that burns in modern gasoline engines--without the need for expensive flex-fuel technology. The first step is achieving high yields of glucose from biomass--cellulose/lignin. Genetic engineering can help with that as well, using designed organisms in mass bioreactors to convert pre-processed biomass residue into glucose to feed into the Step 2 mass bioreactors producing isobutanol.

High yields from both steps in the process are important for cellulosic butanol to become an economic alternative to gasoline. Gevo is a favourite of Richard Branson's Virgin Companies, and Vinod Khosla's Khosla Ventures.

Bio-butanol and Bio-diesel both have excellent long-term potential for replacing fossil fuels in conventional internal combustion engines. Ethanol is for drinking, and should stay that way.

Update 8 Jan 08: For a look at some more ambitious biotech approaches to creating biosynthetic fuels, see here. The truth is, biological systems can make virtually any organic molecules. Which is what I have been saying for a long time. Peak oil, meet biology.

In China There is No Capital Gains Tax for Stocks

China's stock market has become a bubble of frenzied investment.

SHANGHAI -- China's latest attempt to slow its runaway stock market might just work.

The Shanghai Composite Index tumbled 6.5% to 4,053.088 points on Wednesday in its second-biggest fall this decade after the Ministry of Finance tripled taxes on share transactions to 0.3% of trading value.

....ver the past few weeks, many institutional investors had largely stopped buying stocks as individual investors, accounting for up to 80 percent of turnover, began to push prices far above fund managers' expectations.

Stocks fever is gripping the country: Internet chat rooms are full of hot stock tips, people are quitting day jobs to trade, and a folksy investment guru known as "China's Warren Buffett" has won prominence.

The number of stock investment accounts hit the 100 million mark on Monday, and people have been opening about 350,000 new accounts each day. Luminaries from Hong Kong billionaire Li Ka-Shing to former U.S. Federal Reserve Chairman Alan Greenspan warned the market was heading for a crash.

By acting to halt that trend now - rather than waiting for the index to hit 5,000 points, which had become a short-term target for some - authorities may have avoided serious damage to the market, analysts said.

"We expect the policy change may add pressures on share prices in the near term, which could reduce the risk of a market crash," Citigroup said in a report.

Source

Although the stock market may land softly from this bubble, the long term prognosis for China's economy is less than sanguine, according to Gordon Chang.

Sensing American frustration, Beijing is approaching next week’s trade talks with the Bush administration with a hint of desperation. It is making pugnacious pronouncements, purchasing large quantities of American technology and soybeans, and pleading for more patience. It is, in fact, doing everything but complying with its trade obligations. Chinese leaders know that their economy cannot compete according to the rules. And that is one reason why the Chinese one-party state, which is overly dependent on exports to deliver prosperity, might just yet collapse.

Source

Certainly the recent spate of poisoned Chinese food products has not helped to reassure seasoned observers of the Chinese economy. Even in China the people are concerned about their own home-grown food source.

The quality and safety of China's food products has come under scrutiny around the world since tainted pet food caused deaths of cats and dogs in the United States and toxins in toothpaste exported from China led to recalls in Latin America.

At home, China's citizens are treated to a near-daily diet of stories of mass food poisonings or tainted products, and the government is starting to take action.

In the most dramatic of a series of measures, from announcing a system of food recalls to blacklisting producers who break the rules, a court sentenced to death the former head of the national food and drug agency for taking bribes in exchange for drug approvals.

Source

Many analysts are using straight-line extrapolation methods to predict the future of China's economy, but that does not seem wise. It is the underlying corruption, lack of strict accounting practices in the financial sectors, and lack of accountability by the massive state-owned industry sector that urges caution on anyone wishing to predict the future of China's economy. The underlying infrastructure is not nearly as sound as the official external figures suggest.

Consider: what would the US stock market be doing if there were no capital gains tax on stocks in the US?

Solar Power from Outer Space

Whatever happened to the idea of using satellites to harvest solar power 24 hours a day? Jim from the Energy Blog has an update from the Space Island Group (SIG) and their current project to place photovoltaic arrays in orbit.

The Space Island Group, Inc. (SIG) will design and finance two categories of space hardware to make these results possible. Both categories will incorporate components now used on NASA’s space shuttles and other launch vehicles, and on today’s communications satellites. This is not an R&D project. Because we will not develop new rocket engines, guidance systems or other components and because we’ll manage the program with private industry procedures, our development costs will be far below those of comparable government efforts.

The first hardware category will be very large structures up to several kilometers wide called solar power satellites and solar reflectors, which will be assembled in space.

The second will be very low-cost manned and unmanned launch vehicles, and very large, low-cost living quarters in orbit able to comfortably house several hundred occupants at a time. These occupants will, among other tasks, assemble and maintain the orbiting solar satellites and solar reflectors.

....This is not a government program. We feel that taxpayers have already funded most of the hardware we’ll use.

Now it’s our job to use that proven hardware to let a broad range of industries profitably capitalize on that investment. Along the way, we expect that we and these industries will create millions of high-paying American jobs that overseas competitors won’t be able to take away for decades. In fact we’ll make those American jobs a lease-condition for our tenants.

These jobs will start with the defense contractors. Some 90% of our development funds will go to the firms that now build shuttle components for NASA. Tens of thousands of current aerospace jobs will end when the shuttles retire in 2010. Our first launch in 2008 or 2009 will not only absorb those employees, but will increase their numbers many times over during the following decade. Many of the same firms will build our space hardware, but we’ll use simpler, commercial procedures rather than the more complex ones used for government work.

Read more at the SIG website. SIG has quite a few plans for their solar satellites, including energy production, hurricane control, reflecting sunlight to croplands to prolong the growing season, and many more . . . They have a section discussing global warming, ice age, and many other fascinating topics.

Read more about solar power satellites, and other peaceful uses of outer space, here. This might be a good time to go back and review my posting about access to space. You have to get there before you can do all these things. This post from Power From Space blog provides links to all the companies involved in the race to place solar power satellites in orbit.

The main limit to human progress is the limit of the human brain. Humans are presently intelligent enough to get into a lot of trouble. If you are a singularitarian, you are pinning your hopes on intelligent machines, nanotechnology, and the exponential increase in knowledge. Personally, I prefer the idea of enabling more intelligent humans. Either approach holds risks, but the alternative is to let things take their current course. There are also problems with that approach.