Ed Schultz interviews Florida Rep. Alan Grayson about Congress finally demanding more transparency from the Federal Reserve, and auditing their massive secret bank bailouts. The recently passed legislation will now allow the Government Accountability Office to independently audit the Fed, and their nefarious Wall Street deals.  Alan Grayson and Ron Paul co-authored the amendment, which also had a whopping 311 co-sponsors in the house.

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“We need to stop giving money to the bad banks, they just eat it, they don’t actually hand it out to people and do anything useful with it. We have to give money to the good banks. The fundamental strategy that has been followed since the Bush Administration to try to recover from this is flawed…the good banks will go and make good loans to people, to businesses, to small businesses in particular, and the economy will recover.”

—Rep. Alan Grayson

Climate change? Not so much. If Jon Stewart is snoozing, we know that the rest of America - a goodly percentage of which is far across the spectrum from Stewart and outwardly hostile to climate change arguments - is tuned all the way out. That is partly because climate change, energy and the environment still are considered Birkenstock and granola issues. The Obama operatives that are still engaged on climate change have finally started to tweak the message in a way that might help sell a bill even to science skeptics and the generally apathetic.

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Global Warming is a health hazard.

One of the nicer Friday News Dumps, this decision comes as a welcome and long overdue shift in government activity on carbon and other global warming gasses.  The timing of the announcement, especially under the cover of Obama releasing torture memos from the Bush administration, is interesting — it’s already becoming a regular thing for this administration to give it’s opponents a few things to chew on in a very short period, and I would bet that many people are more fired up about the torture thing then this EPA ruling.

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A new way to treat wood has trees back in the limelight: a hardwood’s reliability that even a rain forest mahogany tree can love.

The above picture is of the world’s first heavy traffic road bridge made from Accoya® wood. The bridge, located in Sneek in the Netherlands, is “the first wooden bridge in the world that can support the heaviest load class of 60 tons”.  At this week’s Wall Street Green Trading Summit, a panel on forestation introduced a new way of thinking about how to deal with destruction of the rain forest.

>> More from the recent Wall Street Green Trading Summit:   Opening, Carbon Markets, Weird Investments and Solar Panels for All.

I think we can all agree that planting trees is a good way to go environmentally green (they capture carbon like crazy), but lets take a look at that other green for a moment: the green of cash.  Forestation can turn a profit quickly, given that it is one of the few industries in the United States that we know for sure will be cross marketable as a carbon offset industry. 

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Even for a group focused on Investing First and Green Second, this is getting a little silly.

The longer I am here at the Wall Street Green Trading Summit, the less this feels like anything to do with environmentalism.  At some point, when does off-setting stop being feasible, and when does carbon reduction become the name of the game?

>> More Wall Street Green Trading Summit:   Opening, Carbon Markets, Solar Panels and the Electric Grid

This was driven home to me by a presentation on the investment opportunities presented by species banks.  Now, I didn’t even know what a species bank was until today, but apparently you can purchase an offset credit to get around the fact that your company is destroying the natural habitat of an endangered species.  And, there is an entire market based around this principle.

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We’re coming at you no-longer-quite-live at New York’s very own Wall Street Green Trading Summit.

The summit is over for today, but I wanted to throw some concluding thoughts out after an afternoon spent discussing good business models for producing alternative energy and for overhauling our current electrical grid.

>> More Wall Street Green Trading Summit:   Opening, Carbon Markets, Weird Investments.

Two presentations stuck out to me from the afternoon, Tioga Energy and Acorn (no, not that ACORN) Energy.  Without turning this into too much of a publicity-fest for either company, here’s what they were about.

Solar Panels for All

Tioga has gotten pretty good at a business model that I’ve actually heard about in a few different places: effectively, they lease people’s roof space and put solar panels up on homes and businesses.  Then, they sell the energy to the people in the home at a fixed rate (below market value for the customer) that goes up slowly over a 20 year period.  There are options for the owner of the property to purchase the solar panels if they would like to down the line, but until they do Tioga maintains everything for them. This means that the company soaks the initial start-up costs for people: often that prohibitive thing reinventing a small business or a home-owner from taking a plunge.

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We’re coming at you live with more special Red, Green, and Blue coverage from New York’s very own Wall Street Green Trading Summit.

It’s Lunchtime now at the WSGTS, and I just emerged from another dizzying bout of acronyms to find myself totally shocked by how little I know about big market investing. Fortunately, I stumbled on Open Carbon World, an open source project on carbon footprints that is here at the conference.  They have accumulated the following glossary of terms, acronyms and etc. to help novices like me navigate these crazy fast talking presentations.  If I drop one or two over the next few days, please forgive the frazzled brain, and give them a look up!  

>> More Wall Street Green Trading Summit:  The Species Bank?, Carbon Markets, Solar Panels and the Electric Grid

OCW is presenting tomorrow, so I’ll reserve final judgment ’til then, but expect a post on some sweet open source ideas having to do with footprints and offsets.

OCW is presenting tomorrow, so I’ll reserve final judgment ’til then, but expect a post on some sweet open source ideas having to do with footprints and offsets.

OK, so Carbon Trading, huh?

The murky mysteries of the market continue to elude me.  The second session today was all about the carbon offset market: where the money is, where the investment opportunities are and will be, and who is making the rules about what a carbon offset even means.

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We’re coming at you live with special Red, Green, and Blue coverage from New York’s very own Wall Street Green Trading Summit.

The WSGTS claims to be the longest running and most comprehensive environmental market event in the industry (and we have no reason to doubt them!)

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Hope-Despair, a painting by Feroza Unvala

2008 - what a year! As we get ready to draw the curtains on one of the most unsettling economic years in history, we the writers of the Inspired Economist are still wondering… was this year one that has left our battered economy begging for inspiration? Or have the sustainable events of 2008 spearheaded the initiation of what we believe is truly an Inspired Economy?

2008 was about the $700 billion bailout. Foreclosures. The plummeting stock market. As the year came to a close, the nation’s economic turmoil battled with the presidential election. But it was also a time when new businesses were born into what appears to be an unprecedented sustainability boom. When energy, economy and environment have taken on a new and inter-dependent definition.

As we position our economy to take off on this inspiring eve of the Obama generation, let’s reflect on the change that has come into play this year……

The First Quarter

The first quarter of the year saw the idea of social entrepreneuring take flight beyond the borders of America.

Cover of Jeffery Sach’s book Common Wealth

It was also the time when the Center for Resource Solutions launched the Environmental Tracking Network of North America – North America’s first network organization for renewable energy and greenhouse gas emissions tracking systems and registries.

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Although many valid arguments have been put forth that the bailout of US automakers is not a positive move - Wall Street appears to think otherwise.   Today’s stock market is showing an early rally with all major indices up.

From CNNMoney.com: “The market now is rallying on hopes that we can begin to stave off massive layoffs in the auto industry,” said Peter Cardillo, analyst for Avalon Partners.

European shares also rose, the pan-European Dow Jones Stoxx 600 index (ST:SXXP: news, chart, profile) showed 5.1% growth to 199.59, but this is still more than 45% lower than its position at this time in 2007.   

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In an interview on CBS’ 60 Minutes, his first since the election, President-elect Barack Obama talked about the economy, the housing market and how to create a sustainable auto industry. He said that the $700 billion bailout plan has done little to improve the economy so far, but he credited the Bush administration Sunday for working to address the global financial crisis.

“There’s no doubt that we have not been able yet to reset the confidence in the financial markets and in the consumer markets and among businesses that allow the economy to move forward in a strong way,” Obama said. “And my job as president is going to be to make sure that we restore that confidence. We shouldn’t worry about the deficit next year or even the year after. … The most important thing is that we avoid a deepening recession.”

The president-elect also said that not enough has been done to address bank foreclosures and distressed homeowners.

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In the interview, Fraser said he felt “very confident” that “real anger at Wall Street” will result in better regulation and more oversight of commercial and investment banking. The steady deregulation of these sectors over the past 25 years has created an “orgy of speculation” and brought us to the current crisis. The future of our economy will depend on rebuilding our infrastructure and a shift to new forms of clean energy, according to Fraser. Any overhaul of our banking and investment sectors should move capital into these areas and away from highly leveraged speculation.

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The study says that the cost of deforestation annually is between $2 and $5 trillion dollars.  These numbers were arrived at after researchers put value on, and then added together,  the many ways in which forests “work” for us, including absorbing CO2 from the air, and providing potable water.

The idea behind the study is that as forests disappear, the natural world no longer provides services which it used to provide for free.

So, the human economic system must step in and find a way to provide these same services, for example  through building reservoirs or building infrastructure to catch carbon dioxide.

“Whereas Wall Street by various calculations has to date lost, within the financial sector, $1-$1.5 trillion, the reality is that at today’s rate we are losing natural capital at least between $2-$5 trillion every year,” Pavan Sukhdev, who led the study, told the BBC.

The review is called The Economics of Ecosystems and Biodiversity (Teeb), and was initiated by Germany, although the European Commission provided the funding.

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Like many of you, I’m sure, I have been glued to the news…online, on screen and in casual conversation. If you’ve actually figured out what when wrong with the debts and swaps and mortgages and hedges…you’re way ahead of the Wall Street mavins and most of the rest of the world.

To most Americans, the real impact so far has been watching 401Ks and various other stock accounts plummet in value. To others, the inability to acquire a mortgage has been the only real sign of trouble.

But, like most businesses, small and medium-sized ones have a different take on the situation. As they are closer to the credit markets, the real impact of a tight market for money impacts entrepreneurs first.

Businesses need money to grow, to meet short term obligations like payroll and to pay suppliers. The immediate impact of the credit crisis has been increased borrowing costs for short-term loans. For manufacturing based businesses that rely on working capital to fund purchases this creeping interest rate increase means either a profit squeeze or potentially increasing prices which, as we know, should be undertaken with caution in a recessionary climate. For any business with employees, tight credit can mean the ability to meet payroll each month is compromised.

Add to that, how Entrepreneur.com puts it:

…. most small businesses are constantly struggling to get the capital they need to launch and grow their businesses. This is especially true when the founders have poor personal credit, as so many displaced corporate workers and other potential entrepreneurs do now.

So you may be concerned and probably should be. Most entrepreneurs are.

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Investing In Real Estate

It all started with real estate investing which involves the purchase, ownership and sale of real estate for profit. Real estate is an asset form with limited liquidity relative to other investments, it is also capital intensive (although capital may be gained through mortgage leverage) and is highly cash flow dependent. The primary cause of investment failure for real estate is that the investor goes into negative cash flow for a period of time that is not sustainable, often forcing them to resell the property at a loss or go into insolvency.

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The beginnings of another new economy are taking shape as Morgan Stanley and Goldman Sachs prepare to close the curtain on investment banking.

Mitsubishi UFJ Financial Group Inc., Japan’s largest bank, will inject 900 billion yen ($8.4 billion) into Morgan Stanley to help it transition to a bank holding company. Goldman Sach’s strategy is slightly different albeit with the same ultimate objective i.e. to become a commercial bank. According to Bloomberg, Goldman already has in excess of $20 billion in customer deposits in two subsidiaries and is creating a new one, GS Bank USA, that will have more than $150 billion of assets, making it one of the 10 largest banks in the U.S.

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I can’t wrap my head around all the pieces yet (and I’m not sure if I’ll ever be able to), but here are some random thoughts about what the market meltdown might mean for oil prices, oil production, renewable energy development and climate change:

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The government’s latest bailout news involves a plan to make the biggest intervention in the financial markets since the 1930s. Central to this plan would be a mechanism to bad assets off the balance sheets of financial companies or instead perhaps to create a federal insurance for investors in the money market funds. Additionally, the Securities and Exchange Commission is getting ready to propose a temporary ban on short selling financial stocks.

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Investment Banks have long been the entrepreneurs of Wall Street. Sure they take risk but then look at the return that they bring. In a capitalistic society, who doesn’t respect the work of an entrepreneur? Time and again they have been instrumental for fueling the economy. A high return on investment has enabled many of the investment banks to show a solid to commitment to corporate social responsibility in the last few years:

• Lehman Brothers partnered with Spelman College a year ago to create a center for Global Finance and Economic Development at the college to prepare women of African descent for successful careers and leadership in the corporate world.
• Morgan Stanley announced last year the creation of the Morgan Stanley Carbon Bank to assist clients seeking to become carbon neutral.
• Goldman Sachs has just announced 10,000 women, a series of non-profit and academic partnerships that provide business an d management education to women in Brazil, India, China and the Philippines.

There has been much question about the Fed refusing to bail Lehman out for a paltry amount in comparison to what it was willing to pay to bail out AIG. Although their claim is that it is not socially responsible to bail out an investment bank with taxpayer dollars, the larger questions lies in that is it socially responsible for the Fed to allow the entrepreneurs of Wall Street to fail when they are actually working to serve society by demonstrating commitment to CSR?

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In view of the current financial crisis, it is hard to grasp the fact that overnight investment banks once regarded the kings of Wall Street, are teetering on the edge of stability. The bankruptcy of Lehman Brothers has threatened the survival of Morgan Stanley in spite of the fact that it has just declared great earnings. All eyes are on Morgan and Goldman Sachs, the two big I-banks left standing. Will they go next? What will this mean for corporate social responsibility in the investment banking sector?

Investment Banks have long been the entrepreneurs of Wall Street. Sure they take risk but then look at the return that they bring. In a capitalistic society, who doesn’t respect the work of an entrepreneur? Time and again they have been instrumental for fueling the economy. A high return on investment has enabled many of the investment banks to show a solid to commitment to corporate social responsibility in the last few years.

>>Read the rest of this post at The Inspired Economist

Carbon Footprint… Species Footprint?

A Carbon offset is a nebulous thing, but it does have measurements: tons of C02, years you can produce.  This raises some questions about how one can verify the veracity of a bank.  How long does the new place have to be “guaranteed safe” before the permanent destruction of a previous habitat is deemed acceptable?  What happens if a species that was on the endangered list makes a come back?  Does that mean your offset credit is now worthless?  Man, I hope Wall Street has some idea of how to defray the risks inherent in biology.

Unlike with carbon, there doesn’t seem to be a lot of voluntary market for these credits.  People who want to conserve manage to find some way to, well, conserve.  They find ways to make projects that don’t involve the destruction of habitats and species.   This means that this entire market is all based on government regulations and the things that the feds deem worthy of protection.  I guess that, in our capitalist driven society, placing a monetary value on something seems to be the only way to move from an adversarial debate between business and environmentalism.  After all, as Douglas Adams said: “You’ve got to build bypasses”.

Image: via Dou, flickr.com creative commons license