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- THE FRIDAY LETTER -
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from Gilder Publishing,
for friends and subscribers)
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| http://www.gilder.com/ | Issue 338.0/April 25,
2008
SIGN-UP A FRIEND FOR FREE!
HEADLINES:
- The Week / Shorting Solar
Stocks?
- Friday Feature / Dvorak v. Gilder: The Bandwidth Conundrum
- Friday
Blogger Bonus / David Malpass: Credit Crisis Hits Home
- Readings /
|
GILDER/FORBES
TELECOSM 2008: The exaflood TELECOSM
offers attendees the invaluable opportunity to network with and learn from
the world’s leading tech executives and entrepreneurs and
market-moving economists and investment advisors. YOU DO NOT WANT TO MISS TELECOSM 2008. |
The Week / Shorting
Solar?
Gilder Telecosm Forum Member (4/23/08): GG, are you shorting all these solar and
other alternative energy stocks?
GEORGE GILDER (4/23/08): I don't believe in shorting. (I
accept enough risk without it and I believe that a short requires even more
research than a long, with infinitely smaller possible upside.) And I don't
dismiss all "alternative energy." Nuclear is the most attractive
followed by oil shale and tars, exploited by new electromagnetic technology
that obviates use of water.
But you are right that most of the solar plays, particularly based on use of
waferfab technology, are eminently suitable for investigation by a
sophisticated short. Despite all the hype and hustle, solar power still
supplies less than one percent of our energy. Doomed to fail dismally is any
technology that succeeds because of subsidies based on the silly assumption
that CO2 is a pollutant.
Gilder Telecosm Forum
Member (4/23/08): I imagine a world less dependent on
fossil fuels would only be a better one, especially if it spurs new economic
growth in emergent replacement technologies while making the US more oil
independent.
GEORGE GILDER (4/23/08): This position seems sensible and I agree with it. But
my view is that the greens are adamant against all energy technology, clean or
not. If we defer to their view of fossil fuels, even when scrubbed, and nuclear
power, even with weapons-grade protection, we will find ourselves with no
adequate energy sources, regular brownouts, and a withered Silicon Valley
(already gasping for power because of the California petrophobias). As a
result, Intel has resolved to build no more waferfabs in California. Real
economic growth is not enhanced (see Hayek and Von Mises), by economically
otiose or redundant spending.
And right now, to survive industrially and militarily, we need oil. It is
criminal to stop US companies from drilling for it anywhere in Alaska or
offshore. The initial cost is inexorable increases in use of coal, which is far
more dangerous and pollutant.
Soft green views like yours seem moderate and reasonable and they may well
prevail with McCain, until he discovers that he is condoning a dire threat to
this country's future as an industrial and military power.
To read more of
George Gilder’s posts and those of the Gilder Telecosm Forum members, visit http://www.gildertech.com/ and become a
Forum member today.
|
FRIDAY LETTER BOOK OF THE MONTH Covering the range of global warming
claims, from the famed "hockey stick graph" to a predicted rise of
mosquito borne diseases, the book is fascinating and even profound on the
flaws of computer modeling, the irrelevance of consensus to science, the
crippling effects of excessive specialization, and the mounting evidence of a
coming cooling trend. It ends with a cogent explanation of how carbon taxes
and offsets devastate the environment. --
George
Gilder |
Friday Feature / The Bandwidth Conundrum
John Dvorak, PCMag.com: In today's world, bandwidth demand is similar to
what processing demand was 20 years ago. You just can't get enough speed, no
matter how hard you try. Even when you have enough speed on your own end, some
other bottleneck is killing you.
This comes to mind as, over
the past few months, I've noticed how many YouTube videos essentially come to a
grinding halt halfway through playback and display that little spinning timer.
Why don't they just put the word "buffering" on the screen?
All too often, it's not the
speed of my connection that's at issue--it's the speed of the connection at the
other end. It may not even be the connection speed itself; it may simply be the
site's ability to deliver content at full speed under heavy demand.
This concerns me, since I'm
an advocate of IPTV and other technologies that need lots of speed to work. We
seldom consider the fact that if something becomes hyper-popular (like YouTube),
user demand on the system is enormous and can easily break the system from the
demand side….
Read On: http://www.pcmag.com/article2/0,2817,2283507,00.asp
GEORGE GILDER (4/15/08): Interesting article that misses the chief recent
development on the net: the huge advances in the efficiencies of the
datacenters that dispense these web pages. The "cloud" computing
paradigm, pioneered by Google, is now going mainstream as Nicholas Carr,
Telecosm speaker this year (www.TelecosmConference.com), documents in his intriguing book. For example, Jules
Urbach--our movie and virtual world renderman and Telecosm star with his
Lightstage corporation--can send images from thousands of different
"viewports" per second from his graphic processor based OToy servers,
which can scale to millions of users. A company called Azul has developed cheap
scalable datacenter technology that delivers terabits per second from its OS
neutral Java-based clusters of servers.
The bottleneck is rapidly moving back to where it has long resided: at the last
mile, where passive optical networks, such as VZ's Fios, are increasingly
necessary. For IPTV, content delivery networks (CDN) from Akamai and its
increasing throng of video rivals using a variety of ingenious delivery
algorithms will eclipse the cumbersome BitTorrent mesh model, which shuffles
video files through underused personal computers across the network.
To read more of
George Gilder’s posts and those of the Gilder Telecosm Forum members, visit http://www.gildertech.com/ and become a
Forum member today.
|
The Gilder Telecosm Forum To
learn how to join this powerful network of talented, tech-savvy investors and
thinkers online daily to debate, discuss, and decode new and emerging
technologies and share valuable and actionable investment advice, visit www.Gildertech.com today. |
Friday Blogger Bonus / Credit Crisis
Hits Home
David Malpass, Forbes.com (4/21/08): The credit market maelstrom has hit very
close to home with the Mar. 13 run on Bear Stearns, my employer of 15 years.
It's tempting to join the economic calamatists who see a prolonged debt crisis,
even a 1930s-style deflation, related to bank failures and housing
foreclosures. But the world clearly has a positive economic bias despite Bear's
tribulations and the U.S.' mortgage problems.
Global employment
has leaped by hundreds of millions this decade, spurred by capitalism and
productivity. With it, global income will hit $53 trillion in 2008, double the
rate in 1995, with the U.S. earning more than $14 trillion of the total. While
U.S. subprime losses will reach into the hundreds of billions of dollars, the
world now earns that amount every three days. And with useful inventions made
every few minutes, much more of the world's wealth is in front of it, not
behind it.
Washington has
rejected the most direct and low-cost fix to the credit crunch: a stronger
dollar to reduce the capital flight draining U.S. credit markets. Some think a
weak dollar might help exporters, though weak-currency countries have routinely
experienced more damage elsewhere in their economies than exports can make up.
Others think the dollar can't be strengthened, that it's no longer credible
enough to invite buyers. It's more likely that even the smallest hint of
Washington's being interested in the dollar or currency intervention (dollar
buying by the U.S., Japan or Europe) would reverse the flight from the dollar
and U.S. investments.
Washington's
Expansion
But even without
using the dollar as a stabilizer, Washington's actions should stop the
financial crisis. It has opened the Federal Reserve's discount window to
primary dealers for the first time, bringing investment banks under the Fed's
protection from runs. The Fed has set up other powerful new liquidity
facilities. Over time it will swap part of its Treasury debt holdings (which
were 15% of the U.S.' marketable national debt) for mortgages or bank loans.
Washington has
also expanded the role of Fannie Mae and Freddie Mac in the mortgage market,
bringing their huge balance sheets and expertise to bear. The combination of
falling mortgage rates and lower house prices should gradually bolster the
housing market. Congress is contemplating even larger mortgage subsidies, though
the tax subsidy for U.S. mortgage debt is already $74 billion per year,
according to Congress' tax expenditures handbook.
Funded by
millions of U.S. taxpayers, the government will mail checks to millions of
households hoping they'll spend their rebates to lift the economy. Growth is
ultimately driven by hard work, innovation and profit. But the first estimate
of GDP comes from how much is spent; by that gauge Washington's gesture is
unusually timely.
The pessimistic
view understates the short-term impact of these historic measures and the
world's longer-term opportunities. As the world works harder and smarter--with
ever more capital--assets and debt are likely to continue rising faster than
annual income. The sharp U.S. slowdown and the recent loss in housing wealth
should be put in the context of 4.8% unemployment and the housing gains of
recent years, which are many times greater than the declines. With 138 million
people formally employed on company payrolls and millions more working on their
own, the biggest asset by far for American households is their future
earnings….
Read On:
http://www.forbes.com/columnists/global/2008/0421/016.html
__________________________________________
Readings /
The State of Global Telecom
http://www.technologyreview.com/Infotech/20592/page1/
Anadigics Soars on Oulook
http://money.cnn.com/news/newsfeeds/articles/apwire/79cbe44742c4d163edaeddbf592156ff.htm
The Xbox Trap
http://www.forbes.com/technology/2008/04/24/microsoft-xbox-earnings-tech-ebiz-cx_bc_0424xbox.html
Morphing Cellphones
http://www.forbes.com/technology/2008/04/25/nanotech-cellphones-nokia-tech-wire-cx_ll_0425nano.html
NYC Is Getting a New High-Tech Defense Perimeter. Let's
Hope It Works
http://www.wired.com/politics/security/magazine/16-05/ff_manhattansecurity
__________________________________________
Friday Letter Editor: Mary Collins George / mcollins@gilder.com
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