How is it that a guy who says he's not running for anything can give a killer-diller speech that no other national candidate even approaches?
Such is the paradox for our nation, getting burned by our profligate energy consumption, overspending, overborrowing and Inspector Clouseau-like regulation of our financial institutions.
Al Gore, the most forward-thinking popularly elected candidate of recent times, nailed the energy agenda in a speech today. Let's switch to clean power in 10 years. It should be a pressing national priority. It can be done. It needs to be done.
Why can't Obama and McCain articulate this? What are they afraid of? Is Obama afraid of being audacious? Is McCain scared of the Bush-Cheney-Saudi cartel that has us hoodwinked into believing that drilling for more oil will solve our problems? The only guy who really gets it is Ralph Nader, who nobody is giving any airtime to as he assails corporate America, the leukemia of American politics.
Gore says "our dangerous over-reliance on carbon-based fuels is at the core of all three of these challenges — the economic, environmental and national security crises. We’re borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the planet. Every bit of that has to change.”
Bravo! Economy. Ecology. National Security. What's not to like about his argument?
The only thing missing from Gore's speech is maybe the reason why he didn't let loose his pit bulls in Florida to save the election from the forces of evil in Florida in 2000. He's being too nice. I think he still wants people to like and respect him. He wants a consensus.
What's missing from the Gore agenda is a political edginess that gets people out in front of their Congressmen. It gets them mobilized to identify and corner the trogdolytes in the Senate who are holding up energy credit and climate change legislation.
Where's the outrage? Where's the organized mob that will deluge the trolls who think that carbon-based economies are still the way to go? Of course, the oil, coal and gas industries want nothing to do with Gore.
You didn't see any progressive CEOs up on stage with him. But they know that few, if any, outside of Oregon, California, Wisconsin and Massachusetts are prepared to storm the barricades of conventional wisdom. Those who are fat and happy and still fill up their SUVs are the ones who need to be upset enough to hurl epithets at their elected representatives.
"To those who say 10 years is not enough time, I respectfully ask them to consider seriously what the world’s scientists are telling us about the risks we face if we don’t act in less than 10 years,” he said.
Al Gore laid down the green gauntlet a long time ago. Now it's time to put up or shut up.
How many people can he get in every Congressional district to get in the candidate for change? How does he alter the status quo? It was a fine speech, but it has to go beyond words. He's not running for office anymore and sainthood only goes to those who make supreme sacrifices.
Thursday, July 17, 2008
Thursday, July 10, 2008
Picking Apart the Pickens Energy Plan
T. Boone Pickens is a lot of things -- oilman, hedge fund investor, maybe even a truthteller. But energy policy visionary should not be on his resume.
Yesterday, T. Boone launched what he called "The Pickens Plan" for energy security. Most of it is based on building a lot of windmills and using more natural gas for fuel.
Let's start with his proposal to build more wind farms. On its face, it's a great idea. As his "wind map" shows, there's a constant zephyr blowing across the Great Plains from Canada to Texas all the time. If connected to the electrical grid, a lot of power could be fed into the system. Perhaps this would make plug-in cars feasible on a large scale. From there, T. Boone's vision is a little murky.
He favors natural gas as a way to provide fuel for cars. About a quarter of US electricity is produced by natural gas, but here's the catch: We're importing natural gas, which is being burned up so much by power plants both the price and demand is soaring.
Where's solar power in the Pickens plan? He doesn't give it any role. Unlike giant wind turbines, which have to be situated in wide, sparsely populated open spaces, solar can be installed anywhere. You can put solar cells on cars, garages, large office buildings, commercial warehouses, even windows. The technology is constantly improving and it is coming down in cost.
Better yet, solar energy is the one commodity that isn't traded on an exchange. Speculators can't run the price of it up or down. I won't say that it's free -- it's rather costly to convert it into electricity -- but the resource is easy to get at. No extraction or pipelines are required.
Using natural gas as a fuel replacement for gas and diesel sounds like a good idea at first. Yes, it's cleaner burning than oil, gasoline or coal. But it still produces carbon dioxide and it's still a commodity whose price will soar once people use more of it.
Even if you build a whole refueling infrastructure for natural gas cars, you still have to deal with supply and demand issues. And the last time I checked, most natural gas was used for heating. Do you want to see higher home heating bills? They are already up between 40% and 60% from last year and we haven't even hit the prime hurricane season.
I love the idea of a clean-burning car. I even called up my local Honda dealer to see if I could buy a natural-gas hybrid. Only a handful of them are available in California. If you could get one anywhere else, you'd need a network of natural gas filling stations or a refueling port installed in your home for $1,000 or so.
Pickens also emphasizes that private investment can create his energy network. Why is he letting government off the hook? Could it have something to do with two oilmen running Washington (and the country) into the ground?
If this plain-talking Texan wants to talk turkey, he should start flapping his wings at a White House that blocked every official mention of climate change, thwarted environmental protection, blocked progressive energy policy and spat in the face of energy security.
Congress is also to blame. The Senate has been sitting on a House-Passed package of energy incentives for months. A few backward souls are blocking this landmark bill. Why? Are they afraid Americans would start producing energy on their own on the roos of their own homes or in their own backyards? That's the kind of change Pickens should be talking about.
If government is in the energy security question, then building standards requiring energy efficiency come into play. (Pickens says nothing about conservation, really). Why can't every new building (home, office, factory) make its own power?
Ok, I agree that sending $7 trillion overseas for energy is too much. I'd rather see that money spend on health care for everyone. But Pickens way of solving the problem is wrong headed. We need a comprehensive, integrated solution that combines alternative energy with efficiency and conservation. Everybody has to be on board or it won't work. Being a Texas oilman gives you a narrow view of the world. You can't see the whole truth through an oil pipeline, though.
Here's his plan:
In 1970, we imported 24% of our oil.
Yesterday, T. Boone launched what he called "The Pickens Plan" for energy security. Most of it is based on building a lot of windmills and using more natural gas for fuel.
Let's start with his proposal to build more wind farms. On its face, it's a great idea. As his "wind map" shows, there's a constant zephyr blowing across the Great Plains from Canada to Texas all the time. If connected to the electrical grid, a lot of power could be fed into the system. Perhaps this would make plug-in cars feasible on a large scale. From there, T. Boone's vision is a little murky.
He favors natural gas as a way to provide fuel for cars. About a quarter of US electricity is produced by natural gas, but here's the catch: We're importing natural gas, which is being burned up so much by power plants both the price and demand is soaring.
Where's solar power in the Pickens plan? He doesn't give it any role. Unlike giant wind turbines, which have to be situated in wide, sparsely populated open spaces, solar can be installed anywhere. You can put solar cells on cars, garages, large office buildings, commercial warehouses, even windows. The technology is constantly improving and it is coming down in cost.
Better yet, solar energy is the one commodity that isn't traded on an exchange. Speculators can't run the price of it up or down. I won't say that it's free -- it's rather costly to convert it into electricity -- but the resource is easy to get at. No extraction or pipelines are required.
Using natural gas as a fuel replacement for gas and diesel sounds like a good idea at first. Yes, it's cleaner burning than oil, gasoline or coal. But it still produces carbon dioxide and it's still a commodity whose price will soar once people use more of it.
Even if you build a whole refueling infrastructure for natural gas cars, you still have to deal with supply and demand issues. And the last time I checked, most natural gas was used for heating. Do you want to see higher home heating bills? They are already up between 40% and 60% from last year and we haven't even hit the prime hurricane season.
I love the idea of a clean-burning car. I even called up my local Honda dealer to see if I could buy a natural-gas hybrid. Only a handful of them are available in California. If you could get one anywhere else, you'd need a network of natural gas filling stations or a refueling port installed in your home for $1,000 or so.
Pickens also emphasizes that private investment can create his energy network. Why is he letting government off the hook? Could it have something to do with two oilmen running Washington (and the country) into the ground?
If this plain-talking Texan wants to talk turkey, he should start flapping his wings at a White House that blocked every official mention of climate change, thwarted environmental protection, blocked progressive energy policy and spat in the face of energy security.
Congress is also to blame. The Senate has been sitting on a House-Passed package of energy incentives for months. A few backward souls are blocking this landmark bill. Why? Are they afraid Americans would start producing energy on their own on the roos of their own homes or in their own backyards? That's the kind of change Pickens should be talking about.
If government is in the energy security question, then building standards requiring energy efficiency come into play. (Pickens says nothing about conservation, really). Why can't every new building (home, office, factory) make its own power?
Ok, I agree that sending $7 trillion overseas for energy is too much. I'd rather see that money spend on health care for everyone. But Pickens way of solving the problem is wrong headed. We need a comprehensive, integrated solution that combines alternative energy with efficiency and conservation. Everybody has to be on board or it won't work. Being a Texas oilman gives you a narrow view of the world. You can't see the whole truth through an oil pipeline, though.
Here's his plan:
America is addicted to foreign oil.
It's an addiction that threatens our economy, our environment and our national security. It touches every part of our daily lives and ties our hands as a nation and a people.
The addiction has worsened for decades and now it's reached a point of crisis.
In 1970, we imported 24% of our oil.
Today it's nearly 70% and growing.
As imports grow and world prices rise, the amount of money we send to foreign nations every year is soaring. At current oil prices, we will send $700 billion dollars out of the country this year alone — that's four times the annual cost of the Iraq war.
Projected over the next 10 years the cost will be $10 trillion — it will be the greatest transfer of wealth in the history of mankind.
America uses a lot of oil. Every day 85 million barrels of oil are produced around the world. And 21 million of those are used here in the United States.
That's 25% of the world's oil demand. Used by just 4% of the world's population.
Can't we just produce more oil?
World oil production peaked in 2005. Despite growing demand and an unprecedented increase in prices, oil production has fallen over the last three years. Oil is getting more expensive to produce, harder to find and there just isn't enough of it to keep up with demand.
The simple truth is that cheap and easy oil is gone.
What's the good news?
The United States is the Saudi Arabia of wind power.
Studies from around the world show that the Great Plains states are home to the greatest wind energy potential in the world — by far.
The Department of Energy reports that 20% of America's electricity can come from wind. North Dakota alone has the potential to provide power for more than a quarter of the country.
Today's wind turbines stand up to 410 feet tall, with blades that stretch 148 feet in length. The blades collect the wind's kinetic energy. In one year, a 3-megawatt wind turbine produces as much energy as 12,000 barrels of imported oil.
Wind power currently accounts for 48 billion kWh of electricity a year in the United States — enough to serve more than 4.5 million households. That is still only about 1% of current demand, but the potential of wind is much greater.
A 2005 Stanford University study found that there is enough wind power worldwide to satisfy global demand 7 times over — even if only 20% of wind power could be captured.
Building wind facilities in the corridor that stretches from the Texas panhandle to North Dakota could produce 20% of the electricity for the United States at a cost of $1 trillion. It would take another $200 billion to build the capacity to transmit that energy to cities and towns.
That's a lot of money, but it's a one-time cost. And compared to the $700 billion we spend on foreign oil every year, it's a bargain.
An economic revival for rural America.
Developing wind power is an investment in rural America.
To witness the economic promise of wind energy, look no further than Sweetwater, Texas.
Sweetwater was typical of many small towns in middle-America. With a shortage of good jobs, the youth of Sweetwater were leaving in search of greater opportunities. And the town's population dropped from 12,000 to under 10,000.
When a large wind power facility was built outside of town, Sweetwater experienced a revival. New economic opportunity brought the town back to life and the population has grown back up to 12,000.
In the Texas panhandle, just north of Sweetwater, is the town of Pampa, where T. Boone Pickens' Mesa Power is currently building the largest wind farm in the world.
At 4,000 megawatts — the equivalent combined output of four large coal-fire plants — the production of the completed Pampa facility will double the wind energy output of the United States.
In addition to creating new construction and maintenance jobs, thousands of Americans will be employed to manufacture the turbines and blades. These are high skill jobs that pay on a scale comparable to aerospace jobs.
Plus, wind turbines don't interfere with farming and grazing, so they don't threaten food production or existing local economies.
A cheap new replacement for foreign oil.
The Honda Civic GX Natural Gas Vehicle is the cleanest internal-combustion vehicle in the world according to the EPA.
Natural gas and bio-fuels are the only domestic energy sources used for transportation.
Cleaner
Natural gas is the cleanest transportation fuel available today.
According to the California Energy Commission, critical greenhouse gas emissions from natural gas are 23% lower than diesel and 30% lower than gasoline.
Natural gas vehicles (NGV) are already available and combine top performance with low emissions. The natural gas Honda Civic GX is rated as the cleanest production vehicle in the world.
According to NGVAmerica, there are more than 7 million NGVs in use worldwide, but only 150,000 of those are in the United States.
The EPA estimates that vehicles on the road account for 60% of carbon monoxide pollution and around one-third of hydrocarbon and nitrogen oxide emissions in the United States. As federal and state emissions laws become more stringent, many requirements will be unattainable with conventionally fueled vehicles.
Since natural gas is significantly cleaner than petroleum, NGVs are increasing in popularity. The Ports of Los Angeles and Long Beach recently announced that 16,800 old diesel trucks will be replaced, and half of the new vehicles will run on alternatives such as natural gas.
Cheaper
Natural gas is significantly less expensive than gasoline or diesel. In places like Utah and Oklahoma, prices are less than $1 a gallon. To see fueling stations and costs in your area, check out cngprices.com.
Domestic
Natural gas is our country's second largest energy resource and a vital component of our energy supply. 98% of the natural gas used in the United States is from North America. But 70% of our oil is purchased from foreign nations.
Natural gas is one of the cleanest, safest and most useful forms of energy — residentially, commercially and industrially. The natural gas industry has existed in the United States for over 100 years and continues to grow.
Domestic natural gas reserves are twice that of petroleum. And new discoveries of natural gas and ongoing development of renewable biogas are continually adding to existing reserves.
While it is a cheap, effective and versatile fuel, less than 1% of natural gas is currently used for transportation.
The Mechanics
 |  |  |
We currently use natural gas to produce 22% of our electricity. Harnessing the power of wind to generate electricity will give us the flexibility to shift natural gas away from electricity generation and put it to use as a transportation fuel — reducing our dependence on foreign oil by more than one-third.
How do we get it done?
The Pickens Plan is a bridge to the future — a blueprint to reduce foreign oil dependence by harnessing domestic energy alternatives, and buy us time to develop even greater new technologies.
Building new wind generation facilities and better utilizing our natural gas resources can replace more than one-third of our foreign oil imports in 10 years. But it will take leadership.
On January 20th, 2009, a new President will take office.
We're organizing behind the Pickens Plan now to ensure our voices will be heard by the next administration.
Together we can raise a call for change and set a new course for America's energy future in the first hundred days of the new presidency — breaking the hammerlock of foreign oil and building a new domestic energy future for America with a focus on sustainability.
Thursday, July 3, 2008
Wall-e is Right
Wall-e goes so far beyond the usual robot-with-a soul film that it transcends the medium.
It's social satire and commentary at the same time. A quirky little trash compactor, Wall-e loves old musicals, collects lots of spare parts and fills his days piling junk into skyscraper-high mountains. The earth at this point is virtually uninhabitable, save for his best friend (a cockroach) and one plant.
But wait, it gets grimmer. Once a scouting robot named Eve comes to search the earth for life, he falls in love with a seemingly unattainable beauty with disappearing arms and a nasty temper. She can fly, blow up ships and is rather testy. Nevertheless, Wall-e is smitten and follows her to the end of the universe.
They end up in a cruise ship where the passengers are so obese that they have lost the ability to walk. Fed by junk food supplied by the evil corporation that has sold them an unhealthy lifestyle for every waking hour, the corporation keeps them fat and stupid. Sound familiar? At this point, the satire became commentary.
It's only when Wall-e and Eve enter this space that they start to re-discover their humanity.
There are some musical homages to "2001: A Space Odyssey" and even "Hello, Dolly" enroute to an outright revolt against mindless consumerism and waste. It's a surprisingly moving film that sends its message along with charm and visual impact.
Director Andrew Stanton and the Pixar crew have shown us how little, lonely robots can nudge indolent couch potatoes into fighting for their humanity. This movie will have impact long after we cease to be amazed at computer animation, robotics or even space ships. As such, it's the best movie of this summer.
It's social satire and commentary at the same time. A quirky little trash compactor, Wall-e loves old musicals, collects lots of spare parts and fills his days piling junk into skyscraper-high mountains. The earth at this point is virtually uninhabitable, save for his best friend (a cockroach) and one plant.
But wait, it gets grimmer. Once a scouting robot named Eve comes to search the earth for life, he falls in love with a seemingly unattainable beauty with disappearing arms and a nasty temper. She can fly, blow up ships and is rather testy. Nevertheless, Wall-e is smitten and follows her to the end of the universe.
They end up in a cruise ship where the passengers are so obese that they have lost the ability to walk. Fed by junk food supplied by the evil corporation that has sold them an unhealthy lifestyle for every waking hour, the corporation keeps them fat and stupid. Sound familiar? At this point, the satire became commentary.
It's only when Wall-e and Eve enter this space that they start to re-discover their humanity.
There are some musical homages to "2001: A Space Odyssey" and even "Hello, Dolly" enroute to an outright revolt against mindless consumerism and waste. It's a surprisingly moving film that sends its message along with charm and visual impact.
Director Andrew Stanton and the Pixar crew have shown us how little, lonely robots can nudge indolent couch potatoes into fighting for their humanity. This movie will have impact long after we cease to be amazed at computer animation, robotics or even space ships. As such, it's the best movie of this summer.
Monday, June 23, 2008
I Miss George Carlin Already
George Carlin may have left the planet, but he hasn't left our consciousness.
One of my rites of passage was listening to his famous "seven words" routine, which every teenager knew as the "seven dirty words." To this day, mainstream broadcast TV and radio will not allow these words, even though you can hear them on most rap songs on your ipod.
On a New York radio station, they played the routine again, which eventually resulted in a 1978 Supreme Court ruling upholding the government’s authority to sanction stations for broadcasting offensive language.
“So my name is a footnote in American legal history, which I’m perversely kind of proud of,” he told The Associated Press earlier this year.
Carlin should be more of a footnote. He was the natural heir to Lenny Bruce, who often expanded the boundaries of humor and satire, simply by telling the truth. Keep in mind I'm not confusing pushing the comedic envelope with good taste or that vulgarity is always funny. It's not and there are far too many comics and writers who feel that it's their divine right to invoke potty and body function jokes on a regular basis.
Carlin took taboos and smashed them around with his microphone. He was a genuine wit and laser-guided social observer. He could make fun of anything with a good spirit and keen eye.
One of my favorite Carlin routines was the strung-out "Hippy-Dippy Weatherman."
"Tonight's forecast --- dark!"
We need more George Carlins to test the limits of the 1st Amendment. There's no need to go without him, though. Here are some of his top jokes, as cited by innocentenglish.com:
One of my rites of passage was listening to his famous "seven words" routine, which every teenager knew as the "seven dirty words." To this day, mainstream broadcast TV and radio will not allow these words, even though you can hear them on most rap songs on your ipod.
On a New York radio station, they played the routine again, which eventually resulted in a 1978 Supreme Court ruling upholding the government’s authority to sanction stations for broadcasting offensive language.
“So my name is a footnote in American legal history, which I’m perversely kind of proud of,” he told The Associated Press earlier this year.
Carlin should be more of a footnote. He was the natural heir to Lenny Bruce, who often expanded the boundaries of humor and satire, simply by telling the truth. Keep in mind I'm not confusing pushing the comedic envelope with good taste or that vulgarity is always funny. It's not and there are far too many comics and writers who feel that it's their divine right to invoke potty and body function jokes on a regular basis.
Carlin took taboos and smashed them around with his microphone. He was a genuine wit and laser-guided social observer. He could make fun of anything with a good spirit and keen eye.
One of my favorite Carlin routines was the strung-out "Hippy-Dippy Weatherman."
"Tonight's forecast --- dark!"
We need more George Carlins to test the limits of the 1st Amendment. There's no need to go without him, though. Here are some of his top jokes, as cited by innocentenglish.com:
* Think of how stupid the average person is, and realize half of them are stupider than that.
* Swimming is not a sport; swimming is a way to keep from drowning. That’s just common sense!
* A house is just a place to keep your stuff while you go out and get more stuff.
* If it’s true that our species is alone in the universe, then I’d have to say that the universe aimed rather low and settled for very little.
* The reason I talk to myself is because I’m the only one whose answers I accept.
* Religion has convinced people that there’s an invisible man…living in the sky. Who watches everything you do every minute of every day. And the invisible man has a list of ten specific things he doesn’t want you to do. And if you do any of these things, he will send you to a special place, of burning and fire and smoke and torture and anguish for you to live forever, and suffer, and burn, and scream, until the end of time. But he loves you. He loves you. He loves you and he needs money.
* If a pig loses its voice, is it disgruntled?
* Why do croutons come in airtight packages? It’s just stale bread to begin with.
* The IQ and the life expectancy of the average American recently passed each other in opposite directions.
* When someone asks you, “A penny for your thoughts,” and you put your two cents in, what happens to the other penny?
* Ever notice that anyone going slower than you is an idiot, but anyone going faster is a maniac?
* Isn’t it a bit unnerving that doctors call what they do “practice?”
* I don’t like to think of laws as rules you have to follow, but more as suggestions.
* Here’s a bumper sticker I’d like to see: “We are the proud parents of a child who’s self-esteem is sufficient that he doesn’t need us promoting his minor scholastic achievements on the back of our car.”
* Have you ever wondered why Republicans are so interested in encouraging people to volunteer in their communities? It’s because volunteers work for no pay. Republicans have been trying to get people to work for no pay for a long time.
* In America, anyone can become president. That’s the problem
* Atheism is a non-prophet organization.
* I’m always relieved when someone is delivering a eulogy and I realize I’m listening to it.
* The reason they call it the American Dream is because you have to be asleep to believe it.
* Most people work just hard enough not to get fired and get paid just enough money not to quit.
* The Golden Gate Bridge should have a long bungee cord for people who aren’t quite ready to commit suicide but want to get in a little practice.
* I think I am, therefore, I am. I think.
* Capitalism tries for a delicate balance: It attempts to work things out so that everyone gets just enough stuff to keep them from getting violent and trying to take other people’s stuff.
* What was the best thing before sliced bread?
* Life is a zero sum game.
* I have as much authority as the Pope. I just don’t have as many people who believe it.
* The main reason Santa is so jolly is because he knows where all the bad girls live.
Thursday, June 19, 2008
iMoney: The best selling mutual fund book
I've been out of the blogosphere for a while as I complete a book on the housing crisis entitled The Cul-de-Sac Syndrome: Revitalizing the American Dream, which will be published by Bloomberg Press early next year.
I'll be blogging more on that subject in the future.
But first, let me introduce you to my latest project, which I co-authored with my friend investment adviser Tom Lydon. It's entitled iMoney: Profitable ETF Strategies for Every Investor (FT/Prentice Hall). I'm proud to say that this book came out of nowhere to the top of amazon.com's mutual fund bestseller list. You can buy it online or in bookstores in July. It's only been out for a few days, but the first print run is sold out and new books will ship in about a week.
Exchange-traded Funds are hot and have gone from almost nothing five years ago to more than $612 billion in assets. They are not stocks, like dot.coms, and I believe they will be around for a long time. They are bundles of securities, currencies and commodities that trade on stock exchanges. They are like mutual funds, except that they are completely transparent and need to be bought through brokers. Their prices are constantly updated throughout the day and you can do everything from buy foreign currencies to small slices of the biotechnology sector.
I recommend ETFs for your portfolio. You can buy all of the US stock and bond markets in just two funds. In fact, the most basic portfolio you could own would be
-- Vanguard Total Stock Market Index ETF
-- Vanguard Total Bond Market Index ETF or iShares Lehmann Aggregate Bond ETF
Oh, and did I mention that these fixed portfolio index funds cost half as much to manage as their mutual-fund counterparts? That's another plus. They are fairly simple to understand until you get to some of the more complex products that allow you to benefit from downward swings in specific markets. That means you can bet against, or short, these funds and make money during price declines.
So far, the book has been well received and buyers starved for a readable book on this subject are flocking to it. It's full of stories from Tom and I and we had fun doing it. Now we are promoting it. If you invest or know someone who invests, please have them take a look at it. There's more information at etftrends.com or at johnwasik.com.
Here's some basic information from amazon.com:
From the Back Cover
The Up-to-the-Minute Guide to ETF Investing: Pick the Right ETFs for Your Unique Goals!
“The authors cover the ETF waterfront. Whether you are a young investor just starting out or a seasoned stock veteran looking for new investment opportunities, this book is a valuable resource.”
-- Sam Stovall, Chief Investment Strategist, Standard & Poor’s Equity Research
"Finally! Lydon and Wasik objectively analyze exchange traded funds for the average person. We particularly liked iMoney's comparisons with more familiar mutual funds, the clear discussions about risks, and the varying viewpoints from some of the industry's smartest minds."
-- Alan Lavine and Gail Liberman, syndicated columnists for Marketwatch.com and authors of Quick Steps to Financial Stability.
Smart investors have made ETFs today’s hottest investment. iMoney is the only ETF investment guide with up-to-the-minute advice that reflects today’s ETF marketplace: advice that is fully customized to your specific investment goals.
The authors explain exactly how ETFs fit into today’s investment universe. Even better, they present specific roadmaps, strategies, and model portfolios for a wide range of investors, from recent college graduates through retirees.
You’ll learn how to build and monitor your ETF portfolio; choose among the fast-growing array of ETFs; and profit from changing global market trends. The authors discuss domestic and foreign stock ETFs; sector, commodity, and currency ETFs; fixed income ETFs, long/short ETFs, and even “actively managed” ETFs. They preview emerging industry trends, and objectively assess the key criticisms that have recently been leveled at ETFs.
· Tomorrow’s ETF book, not yesterday’s! Reflects the newest ETFs and strategies, and prepares you for emerging market trends
· By two of the world’s leading ETF experts...
...Tom Lydon, founder of ETFTrends.com, the nation’s #1 consumer ETF site, and John F. Wasik, global personal finance columnist
Provides specific strategies and portfolio recommendations
Not just theory! Discover what to buy, based on your unique investment profile
Covers every major type of ETF...
...including overseas, sector, commodity, currency, and bond ETFs...even long/short ETF strategies!
Happy Investing!
I'll be blogging more on that subject in the future.
But first, let me introduce you to my latest project, which I co-authored with my friend investment adviser Tom Lydon. It's entitled iMoney: Profitable ETF Strategies for Every Investor (FT/Prentice Hall). I'm proud to say that this book came out of nowhere to the top of amazon.com's mutual fund bestseller list. You can buy it online or in bookstores in July. It's only been out for a few days, but the first print run is sold out and new books will ship in about a week.
Exchange-traded Funds are hot and have gone from almost nothing five years ago to more than $612 billion in assets. They are not stocks, like dot.coms, and I believe they will be around for a long time. They are bundles of securities, currencies and commodities that trade on stock exchanges. They are like mutual funds, except that they are completely transparent and need to be bought through brokers. Their prices are constantly updated throughout the day and you can do everything from buy foreign currencies to small slices of the biotechnology sector.
I recommend ETFs for your portfolio. You can buy all of the US stock and bond markets in just two funds. In fact, the most basic portfolio you could own would be
-- Vanguard Total Stock Market Index ETF
-- Vanguard Total Bond Market Index ETF or iShares Lehmann Aggregate Bond ETF
Oh, and did I mention that these fixed portfolio index funds cost half as much to manage as their mutual-fund counterparts? That's another plus. They are fairly simple to understand until you get to some of the more complex products that allow you to benefit from downward swings in specific markets. That means you can bet against, or short, these funds and make money during price declines.
So far, the book has been well received and buyers starved for a readable book on this subject are flocking to it. It's full of stories from Tom and I and we had fun doing it. Now we are promoting it. If you invest or know someone who invests, please have them take a look at it. There's more information at etftrends.com or at johnwasik.com.
Here's some basic information from amazon.com:
From the Back Cover
The Up-to-the-Minute Guide to ETF Investing: Pick the Right ETFs for Your Unique Goals!
“The authors cover the ETF waterfront. Whether you are a young investor just starting out or a seasoned stock veteran looking for new investment opportunities, this book is a valuable resource.”
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Tuesday, May 13, 2008
Kevin Phillips, Bad Money and the Consumer Price Index
It's always a real ego boost to be quoted twice in a bestselling book. Kevin Phillips did me the honor by noting my revulsion over the Labor Department's Consumer Price Index.
I'll be straight with you: the CPI goes beyond the government's expedient fabrications on the economic conditions of everyday Americans. The index is a bald-faced whopper on a scale of Pecos Bill and Paul Bunyan. It's so mythological in scope that just about any Disney movie is
much more credible.
The CPI grossly understates the largest expense for most Americans: home ownership costs. Instead the blind stat-lovers at the Bureau of Labor Statistics embrace a goofy measure called "Owner Equivalent Rent," that is, what would your home cost if you rented it out? It gets better. The government uses the CPI for the basis of cost-of-living increases for Social Security, so older folks on fixed incomes are getting hosed. What about rising property taxes, home maintenance or even adjustable-rate mortgages? Taken at look at your utility bills lately? The government doesn't want to know about it. Its "core" CPI even strips out food and energy, which, as you know are rising at double-digit clips with no end in sight.
Although the government can certainly cap what it pays seniors getting Social Security, the monthly expenses of the elderly keep going up. Did you know that Medicare only covers about 40 percent of out-of-pocket medical care for those over 65? There are large gaps in coverage, not to mention dental care and a host of things that aren't covered. And with fewer and fewer companies paying defined-benefit pensions -- it's a 401k world now in W's "ownership society -- it's unlikely that the CPI measures anything important about the true cost of living.
So when Kevin Phillips noted my ire over this phony stat, I was happy to see it in his bestselling Bad Money, an indictment of the financial system and how debt is this huge anchor weighing the whole system down. Will it collapse under the huge burden of personal, corporate and government debt? We know that the Medicare and Social Security system have run up trillions in unfunded liabilities, that is, nobody has socked away the money to cover future payments.
We also have no way of knowing how derivatives, or what Warren Buffet calls "financial weapons of mass destruction" are poised to wreck future havoc with the thousands of debt securities the government and corporate sector have floated in the last decade.
While Phillips's book sounded the alarm on not only the rising level of debt on every level, it highlighted the inability of elected government officials to act on this unfolding fiscal nightmare.
To me, one of the greatest fiscal lies foisted on the American people is the pretension that anything has been done to cover the future liabilities for Medicare and medical expenses in general. The Medicare program alone may be bust within 10 years unless some major program cuts or tax increases are put in place. No candidate dares to step within 10 feet of this issue, Ironically, a single-payer national health program, wouldn't even begin to fix this problem.
Here's Kevin's Huffington Post piece, headlined "Washington's Great No Inflation Hoax" (May 8)
I'll be straight with you: the CPI goes beyond the government's expedient fabrications on the economic conditions of everyday Americans. The index is a bald-faced whopper on a scale of Pecos Bill and Paul Bunyan. It's so mythological in scope that just about any Disney movie is
much more credible.
The CPI grossly understates the largest expense for most Americans: home ownership costs. Instead the blind stat-lovers at the Bureau of Labor Statistics embrace a goofy measure called "Owner Equivalent Rent," that is, what would your home cost if you rented it out? It gets better. The government uses the CPI for the basis of cost-of-living increases for Social Security, so older folks on fixed incomes are getting hosed. What about rising property taxes, home maintenance or even adjustable-rate mortgages? Taken at look at your utility bills lately? The government doesn't want to know about it. Its "core" CPI even strips out food and energy, which, as you know are rising at double-digit clips with no end in sight.
Although the government can certainly cap what it pays seniors getting Social Security, the monthly expenses of the elderly keep going up. Did you know that Medicare only covers about 40 percent of out-of-pocket medical care for those over 65? There are large gaps in coverage, not to mention dental care and a host of things that aren't covered. And with fewer and fewer companies paying defined-benefit pensions -- it's a 401k world now in W's "ownership society -- it's unlikely that the CPI measures anything important about the true cost of living.
So when Kevin Phillips noted my ire over this phony stat, I was happy to see it in his bestselling Bad Money, an indictment of the financial system and how debt is this huge anchor weighing the whole system down. Will it collapse under the huge burden of personal, corporate and government debt? We know that the Medicare and Social Security system have run up trillions in unfunded liabilities, that is, nobody has socked away the money to cover future payments.
We also have no way of knowing how derivatives, or what Warren Buffet calls "financial weapons of mass destruction" are poised to wreck future havoc with the thousands of debt securities the government and corporate sector have floated in the last decade.
While Phillips's book sounded the alarm on not only the rising level of debt on every level, it highlighted the inability of elected government officials to act on this unfolding fiscal nightmare.
To me, one of the greatest fiscal lies foisted on the American people is the pretension that anything has been done to cover the future liabilities for Medicare and medical expenses in general. The Medicare program alone may be bust within 10 years unless some major program cuts or tax increases are put in place. No candidate dares to step within 10 feet of this issue, Ironically, a single-payer national health program, wouldn't even begin to fix this problem.
If the government wanted to do something useful, it should publish a consumer retrograde index. This gauge would measure how much people are falling behind. It's simple: Subtract personal income growth (or declines) from the increase in household expenses. I want to see some negative numbers out there, because after inflation and taxes, most families are in the hole these days. Wage growth hasn't kept pace with the cost of living in this century.
With home values dropping -- 75% of home prices across the country dropped this year -- there's no home equity to prop up falling real wages. The stock market is just about where it was before the credit crunch. If we're heading into a recession or facing stagflation (stagnant economic growth with inflation), forget about Wall Street bailing anyone out. They have problems of their own these days.
This whole economic drama is called falling behind. My index would also account for how much more employees have to pay to cover lost benefits. In an ownership society, corporate America has phased out the guaranteed defined benefit pension for the unguaranteed 401(k). You fund it. You pay the expenses. You learn about investing. If you come up short at 65, tough luck.
Now corporate chieftains and MBAs who are walking away with record pay packages are whittling away at employer-provided health benefits.
Here's Kevin's Huffington Post piece, headlined "Washington's Great No Inflation Hoax" (May 8)
Billionaire California bond manager Bill Gross calls it "a haute con job." Bloomberg News columnist John Wasik describes it as "a testament to the art of economic spin." More and more shoppers and consumer simply disbelieve it.
The subject of this scorn is the federal government's vaunted Consumer Price Index or CPI. Americans are now beginning to understand that this indicator has its own share of gimmicks not unlike a sub-prime mortgage or the six pages of fine print that accompanies your credit card agreement.
Some of these CPI ingredients -- product substitution weightings, "hedonics" (price reductions for added product quality or satisfaction), and use of owner's equivalent rent (instead of home ownership costs) -- have a comic aspect suitable to mockery by Bill Maher, Stephen Colbert or Jon Stewart. But in a larger sense, they're not remotely funny. That's because the federal minimalization and misrepresentation of inflation, pursued statistically over the last 25 years, has been the main buttress of Washington's over-favorable and self-serving portraiture of the U.S. economy.
Distortions aplenty have followed. Some of the most pernicious include the shortchanging of federal pension and Social Security obligations and cost of living increases, a parallel shortchanging of cost-of-living increases in wage contracts tied to the federal CPI, the suppression of equitable interest payments on bank accounts and certificates of deposit, and the camouflaging of weak U.S. economic growth through inadequate adjustments for inflation. The benefits to the executive branch in Washington jump out -- huge annual federal savings on Social Security and pension outlays, as well as on the amount of interest paid on the federal government's multi-trillion-dollar debt. Some $250 billion a year could be involved.
If many individuals are losers, many businesses and financial institutions have been winners. Minimal cost-of-living increases favor corporations, while low interest rates make money cheaper to the financial sector. In particular, the gargantuan $10 trillion increase in financial-sector debt since 1994 could become unmanageable if mounting inflation forced borrowing costs up to 8% or 9%. And it is axiomatic regarding equities that when rates rise in the bond market, that competition usually undercuts stock market values.
In short, there have been three big gainers from understatement of U.S. inflation: the federal government, wage-paying businesses and the institutions and markets of the swollen U.S. financial sector. But skeptics have a weighty counter: Okay, it's easy to understand how they all might profit from understating inflation. But if the understatement is patently false, how can they hope to get away with it?
In fact, the belief by many conservative U.S. economists that inflation is under control, despite global indications to the contrary (including soaring commodity and energy prices), has a major ideological component -- their fidelity to monetarist economic principles (that only money supply expansion can create inflation) and to the Efficient Markets Hypothesis (that markets process all available information, so that if inflation were serious, markets would have reacted already). As late as January, monetarists on the Federal Reserve Board, notably Chairman Ben Bernanke and colleague Frederic Mishkin, believed in the new-version CPI and argued that U.S. inflationary expectations were safely "anchored."
Financial economists and money managers generally agree. A late April survey of 120 U.S. institutional money managers by Barron's, the financial weekly, found that on average, they predicted a CPI inflation rate of 2.72% in December 2008 and just 2.79% in December 2009. Elsewhere in the world, central bankers and politicians are worrying about another wave of commodity inflation akin to that in the 1970s, but U.S. money managers take comfort in the Efficient Market Hypothesis and in the wisdom and sanctity of the CPI.
Critics, by contrast, smell a potential disaster. Oil is up over 80 percent in the last twelve months. The New York Times' consumer reporter, W.P. Dunleavy, wrote on May 3 that his own groceries now cost $587 a month, up from $400 a year earlier. That's a 40 percent increase. Reports in the financial press make frequent reference to foreign investors who distrust the U.S. dollar because they calculate true U.S. inflation at 6% to 9% including food and energy.
California economist John Williams, who runs an organization called Shadow Statistics, contends that if Washington still used the CPI measurements applied back in the 1970s, inflation would be in the 10 percent range. My own analysis, set out in much more detail in an article in the May issue of Harper's, comports with that of the cynical foreign investors.
Therein lies the danger. If the current inflation rate is really 6-9 percent instead of the 2-3 percent claimed by government and most U.S. money managers, then Washington's official estimates that the economy still grew at a rate of some 0.6 percent in the first quarter of 2008 become nonsense. Subtracting a 6-9 percent inflation rate from nominal GDP growth would identify an economy that was deteriorating and shrinking, not growing. Concerned foreign dollar-holders would become even more concerned.
In theory, a vigilant Congress might want to hold hearings, but in practice I suspect not. Democratic presidents (notably Bill Clinton) have been involved in the numbers game along with Republican administrations. Neither party has clean hands. Far more likely that any serious investigation will be mounted clandestinely by central banks or sovereign wealth funds in places like China, Singapore and Saudi Arabia as part of their ongoing study of just how much longer they can continue to support a deteriorating U.S. dollar. It is not a happy prospect.
Kevin Phillips's new book Bad Money: Reckless Finance, Failed Politics and the Global Crisis of American Capitalism was published by Viking in April. His article on untrustworthy government statistics ("Numbers Racket") appears in the May issue of Harper's.
Thursday, May 8, 2008
Smart Home: Green + Wired Revisited
Up for some real, world class green homebuilding?
Head on down to the Museum and Science and Industry to see the Smart Home, which was designed by Michelle Kaufmann. Not only is every detail green, but it's modular. I saw them bring it up on flatbed trucks and install it with cranes.
This is my second visit to the home. When I was out two months ago, I saw a crew hoist the five modules onto the foundation. It only took a few hours. The finished product is a cubist interpretation of a two-story city home. It feels much larger than its 2,000-odd square feet. While exquisitely modern, it's not a post-industrial eyesore. "Nanowalls" are accordian doors that open up the home to exterior courtyards and patios. The outside is embraced in this light and airy manufactured home, yet it doesn't sacrifice any intimacy.
Ironically, the home stands in the footprint of a Frank Lloyd Wright Usonian Home. The house itself is nestled in a courtyard of burr oaks that Frederick Law Olmsted himself must have seen and left alone when he was planning the World's Columbian Exposition -- in 1893. Landscape designers have built in bioswales and permeable paver bricks to let the water seep into the soil. Having seen the "before" and "after," I can tell you this is a remarkable project.
A lot of what is being done in this home can be done anywhere. A big exception is that all of the lighting is LED-based. While that's extremely expensive now ($90 a bulb!), the power consumption was such that the home's thin-film Unisolar panels were generating more power than the house was consuming -- and this was during a downpour! New PV technologies create electricity from several spectrums of light, even during an overcast day.
How do I know how much power was being generated? I saw the whole-house energy monitor on a big-screen TV in the living room. The home's Lutron energy system was so comprehensive, it was able to automatically open and close shades and turn off HVAC in rooms that weren't being occupied. The actual high-velocity air ducts, by the way, were roughly the diameter of jelly jar lids. The higher speed air reduces the need for air conditioning. The energy monitor will tell you when ComEd is producing cheaper, off-peak power, so you can program your appliances to run at 3am, when juice is less dear. (A ComEd representative was only too happy to point this out, although the vast majority of homes they serve can't do this now, but should).
I know Michelle spent incredible attention to the materials she used in this home. There were no VOCs in any of the coatings, so the house lacked that "new house" smell of volatile chemicals (really bad for asthma sufferers). The kitchen countertops were bamboo and recycled chardonnay bottles were used in the glass bathroom tiles.
In every space, there was some green element. The green roof was growing chives and sedum and the cistern in the crawl space was storing 5,000 gallons of water for irrigation. The garage had glass doors on either end and was as tightly insulated as the house, so you could convert it to living space at some future point, "when you don't need that second car," Michelle told me.
Such an elegant house also hummed with low-tech ideas that have been around for millenia. A stairwell served as a chimney stack because windows could pull up hot air using the Venturi effect. Chairs were made of recycled plywood. Gutters drained into the water holding tank. A graywater reservoir collected dishwater.
The only drawback is that admission is $23 for adults, $22 for seniors and $14 for kids age 3-11. Nevertheless, if you're serious about major innovations in green building, this is a must-see. The house itself is a major revolution waiting to happen not so much because of its green features, but because it's built in a factory and will be mass produced some day, bringing an eco-conscious, energy-stingy home to the masses.
I think Michelle is the Henry Ford of home designers. She will do more to restore the American Dream once we get out of this housing crisis than a capitol dome full of politicians. And you can step inside her solution to global warming and resource gluttony. That's more than I can say about the hollow talk coming out of Washington these days.
If you don't want to see the home, then partake of the many pleasures of one of world's greatest and most interesting museums. The farm exhibit has been totally revamped and is really kid friendly. A new genetics exhibit is first rate and hands on. Old chestnuts like Moore's Fairy Castle, the coal mine, the Zephyr, circus section and Crown Space Center (you can play with the Mars Rover!) are still enthralling. If you're really, really bored, there's always the IMAX movie and countless smaller exhibits. Currently there's a glass-blowing special exhibit where you can see a wide variety of glass from tiffany windows to art glass. As Walt Disney would say, "there's something for the entire family," but MSI is much more of a bargain. The u-505 submarine alone is worth the price of admission. You can also see a lunar module, Apollo and Gemini spacecraft.
Here's the press release for the Smart Home for more details. If you see it, let me know what you think. Enjoy!
Michelle Kaufmann Unveils First mkSolaire™
at the Museum of Science and Industry’s Smart Home: Green + Wired Exhibit
Chicago Exhibit Showcases the Best in Green Living and Technology
Chicago, IL—May 8, 2008--- Today Michelle Kaufmann, award-winning architect and green living expert focused on thoughtful, sustainable design, opens the doors to the first mkSolaire™ home ever built as part of the original Museum of Science and Industry (MSI) exhibit Smart Home: Green + Wired, Powered by ComEd and Warmed by Peoples Gas. The exhibit will feature a fully functioning version of the mkSolaire, the latest prefabricated, modular home configuration from Michelle Kaufmann Designs (MKD). With the help of key partner Wired magazine, the home will incorporate “smart” technologies, with a focus on energy efficiency, making greener choices and homeowner awareness. Visitors to the 2,500 sq. ft. home, will have the opportunity to learn about the future of innovative, environmentally focused architectural designs and lifestyle solutions.
“The Smart Home is an educational experience that shows visitors, adults and children alike, that an eco-friendly lifestyle is not only good for the environment, but also good for you. I hope that visitors to the Museum and residents of the city will take with them these lessons about sustainable lifestyle choices and adopt them as their own,” said Michelle Kaufmann on the goal of the Smart Home.
“To celebrate the Museum’s 75th anniversary, we brought together a world-class team to create a fully functioning home to explored the promises of green building and technology while honoring the past,” said Anne Rashford, director of temporary exhibits and events for MSI. “We chose Michelle to design the Smart Home because of her exceptional talent and tireless commitment to building and living green.”
5 EcoPrinciples: Unique Solutions for a Healthy Home + Lifestyle
When designing any space, including the Smart Home, MKD thinks of and creates sustainable design based on 5 EcoPrinciples (http://www.mkd-arc.com/company/ecoprinciples/): smart design, eco materials, energy efficiency, water conservation, and healthy environment. “We believe so strongly in each of these principles that we implement every one of them into our designs,” explained Michelle.
Revolutionary Building Techniques
Construction of the Smart Home began in December 2007 with the groundbreaking and laying of the foundation at MSI. Concurrently, the home’s various modules were constructed by All American Homes at the company’s factory in Decatur, Indiana. Within the factory the home’s entire infrastructure was built before being transported and set on the completed foundation located on the East side of the Museum. The University of Illinois Extension partnered with the team to develop the home’s native site landscape.
MKD employs prefabricated, modular building techniques in all their homes, which reduce resource consumption, waste, costs, and building time by up to 50%-75% over conventional building methods. In addition to the mkSolaire, which was designed specifically for healthy living within an urban environment, MKD offers four other prefab, modular configurations: Sunset BreezehouseTM, mkLotusTM, mkLoftTM, and GlidehouseTM, as well as custom homes and larger multi-family and community developments.
Anyone can visit Michelle’s blog (http://blog.michellekaufmann.com) to get an insider’s perspective on the entire building process with insightful entries, detailed images, and engaging videos.
The Smart Home: Green + Wired exhibit is a true celebration of the future of architecture, design, and technology. This is a must-see exhibit for anyone who is interested in learning about how to incorporate smart and simple solutions to create a healthier and more environmentally friendly lifestyle. The exhibit is open to the public beginning May 8, 2008 through January 4, 2009. Tickets are available at www.msichicago.org.
Smart Home: Green + Wired, powered by ComEd and warmed by Peoples Gas, is also sponsored by American Honda Motor Co., Inc.; Dominick’s; and the Motorola Foundation as part of the Museum’s 75th Anniversary.
About Michelle Kaufmann Designs
Michelle Kaufmann Designs (MKD) is a full service design/build architectural firm that specializes in sustainable, innovative, high-quality modular architecture. The goal of her company is to make it easier for people to build green and live a more sustainable lifestyle. MKD was founded in 2002 and is headquartered in Oakland, CA. MKD owns and operates its own factory, mkConstructs, located just outside Seattle, WA. mkConstructs builds homes for California, Washington, Oregon and Hawaii. Michelle Kaufmann Designs works with key factory partners to handle increasing volume and expanded territories. More information can be found at www.michellekaufmann.com
About the Museum of Science and Industry
The Museum of Science and Industry’s mission is to inspire the inventive genius in everyone by presenting captivating and compelling experiences that are real and educational. The Museum first opened its doors on June 19, 1933.
In 2008—more than 175 million guests later—the Museum commemorates its 75th Anniversary with a year-long celebration. Located at 57th Street and Lake Shore Drive, the Museum is open every day of the year except December 25. Regular Museum hours are 9:30 a.m. until 4 p.m., Monday through Saturday, and 11 a.m. until 4 p.m. on Sunday. Extended summer hours, until 5:30 p.m. each day, will be offered from May 24 to Sept. 1. The Museum offers indoor parking and is accessible by CTA and Metra. The Museum is supported in part through the generosity of the people of Chicago through the Chicago Park District. For more information, visit the Museum’s Web site at www.msichicago.org or call (773) 684-1414 or (800) GO-TO-MSI outside of the Chicago.
Head on down to the Museum and Science and Industry to see the Smart Home, which was designed by Michelle Kaufmann. Not only is every detail green, but it's modular. I saw them bring it up on flatbed trucks and install it with cranes.
This is my second visit to the home. When I was out two months ago, I saw a crew hoist the five modules onto the foundation. It only took a few hours. The finished product is a cubist interpretation of a two-story city home. It feels much larger than its 2,000-odd square feet. While exquisitely modern, it's not a post-industrial eyesore. "Nanowalls" are accordian doors that open up the home to exterior courtyards and patios. The outside is embraced in this light and airy manufactured home, yet it doesn't sacrifice any intimacy.
Ironically, the home stands in the footprint of a Frank Lloyd Wright Usonian Home. The house itself is nestled in a courtyard of burr oaks that Frederick Law Olmsted himself must have seen and left alone when he was planning the World's Columbian Exposition -- in 1893. Landscape designers have built in bioswales and permeable paver bricks to let the water seep into the soil. Having seen the "before" and "after," I can tell you this is a remarkable project.
A lot of what is being done in this home can be done anywhere. A big exception is that all of the lighting is LED-based. While that's extremely expensive now ($90 a bulb!), the power consumption was such that the home's thin-film Unisolar panels were generating more power than the house was consuming -- and this was during a downpour! New PV technologies create electricity from several spectrums of light, even during an overcast day.
How do I know how much power was being generated? I saw the whole-house energy monitor on a big-screen TV in the living room. The home's Lutron energy system was so comprehensive, it was able to automatically open and close shades and turn off HVAC in rooms that weren't being occupied. The actual high-velocity air ducts, by the way, were roughly the diameter of jelly jar lids. The higher speed air reduces the need for air conditioning. The energy monitor will tell you when ComEd is producing cheaper, off-peak power, so you can program your appliances to run at 3am, when juice is less dear. (A ComEd representative was only too happy to point this out, although the vast majority of homes they serve can't do this now, but should).
I know Michelle spent incredible attention to the materials she used in this home. There were no VOCs in any of the coatings, so the house lacked that "new house" smell of volatile chemicals (really bad for asthma sufferers). The kitchen countertops were bamboo and recycled chardonnay bottles were used in the glass bathroom tiles.
In every space, there was some green element. The green roof was growing chives and sedum and the cistern in the crawl space was storing 5,000 gallons of water for irrigation. The garage had glass doors on either end and was as tightly insulated as the house, so you could convert it to living space at some future point, "when you don't need that second car," Michelle told me.
Such an elegant house also hummed with low-tech ideas that have been around for millenia. A stairwell served as a chimney stack because windows could pull up hot air using the Venturi effect. Chairs were made of recycled plywood. Gutters drained into the water holding tank. A graywater reservoir collected dishwater.
The only drawback is that admission is $23 for adults, $22 for seniors and $14 for kids age 3-11. Nevertheless, if you're serious about major innovations in green building, this is a must-see. The house itself is a major revolution waiting to happen not so much because of its green features, but because it's built in a factory and will be mass produced some day, bringing an eco-conscious, energy-stingy home to the masses.
I think Michelle is the Henry Ford of home designers. She will do more to restore the American Dream once we get out of this housing crisis than a capitol dome full of politicians. And you can step inside her solution to global warming and resource gluttony. That's more than I can say about the hollow talk coming out of Washington these days.
If you don't want to see the home, then partake of the many pleasures of one of world's greatest and most interesting museums. The farm exhibit has been totally revamped and is really kid friendly. A new genetics exhibit is first rate and hands on. Old chestnuts like Moore's Fairy Castle, the coal mine, the Zephyr, circus section and Crown Space Center (you can play with the Mars Rover!) are still enthralling. If you're really, really bored, there's always the IMAX movie and countless smaller exhibits. Currently there's a glass-blowing special exhibit where you can see a wide variety of glass from tiffany windows to art glass. As Walt Disney would say, "there's something for the entire family," but MSI is much more of a bargain. The u-505 submarine alone is worth the price of admission. You can also see a lunar module, Apollo and Gemini spacecraft.
Here's the press release for the Smart Home for more details. If you see it, let me know what you think. Enjoy!
Michelle Kaufmann Unveils First mkSolaire™
at the Museum of Science and Industry’s Smart Home: Green + Wired Exhibit
Chicago Exhibit Showcases the Best in Green Living and Technology
Chicago, IL—May 8, 2008--- Today Michelle Kaufmann, award-winning architect and green living expert focused on thoughtful, sustainable design, opens the doors to the first mkSolaire™ home ever built as part of the original Museum of Science and Industry (MSI) exhibit Smart Home: Green + Wired, Powered by ComEd and Warmed by Peoples Gas. The exhibit will feature a fully functioning version of the mkSolaire, the latest prefabricated, modular home configuration from Michelle Kaufmann Designs (MKD). With the help of key partner Wired magazine, the home will incorporate “smart” technologies, with a focus on energy efficiency, making greener choices and homeowner awareness. Visitors to the 2,500 sq. ft. home, will have the opportunity to learn about the future of innovative, environmentally focused architectural designs and lifestyle solutions.
“The Smart Home is an educational experience that shows visitors, adults and children alike, that an eco-friendly lifestyle is not only good for the environment, but also good for you. I hope that visitors to the Museum and residents of the city will take with them these lessons about sustainable lifestyle choices and adopt them as their own,” said Michelle Kaufmann on the goal of the Smart Home.
“To celebrate the Museum’s 75th anniversary, we brought together a world-class team to create a fully functioning home to explored the promises of green building and technology while honoring the past,” said Anne Rashford, director of temporary exhibits and events for MSI. “We chose Michelle to design the Smart Home because of her exceptional talent and tireless commitment to building and living green.”
5 EcoPrinciples: Unique Solutions for a Healthy Home + Lifestyle
When designing any space, including the Smart Home, MKD thinks of and creates sustainable design based on 5 EcoPrinciples (http://www.mkd-arc.com/company/ecoprinciples/): smart design, eco materials, energy efficiency, water conservation, and healthy environment. “We believe so strongly in each of these principles that we implement every one of them into our designs,” explained Michelle.
Revolutionary Building Techniques
Construction of the Smart Home began in December 2007 with the groundbreaking and laying of the foundation at MSI. Concurrently, the home’s various modules were constructed by All American Homes at the company’s factory in Decatur, Indiana. Within the factory the home’s entire infrastructure was built before being transported and set on the completed foundation located on the East side of the Museum. The University of Illinois Extension partnered with the team to develop the home’s native site landscape.
MKD employs prefabricated, modular building techniques in all their homes, which reduce resource consumption, waste, costs, and building time by up to 50%-75% over conventional building methods. In addition to the mkSolaire, which was designed specifically for healthy living within an urban environment, MKD offers four other prefab, modular configurations: Sunset BreezehouseTM, mkLotusTM, mkLoftTM, and GlidehouseTM, as well as custom homes and larger multi-family and community developments.
Anyone can visit Michelle’s blog (http://blog.michellekaufmann.com) to get an insider’s perspective on the entire building process with insightful entries, detailed images, and engaging videos.
The Smart Home: Green + Wired exhibit is a true celebration of the future of architecture, design, and technology. This is a must-see exhibit for anyone who is interested in learning about how to incorporate smart and simple solutions to create a healthier and more environmentally friendly lifestyle. The exhibit is open to the public beginning May 8, 2008 through January 4, 2009. Tickets are available at www.msichicago.org.
Smart Home: Green + Wired, powered by ComEd and warmed by Peoples Gas, is also sponsored by American Honda Motor Co., Inc.; Dominick’s; and the Motorola Foundation as part of the Museum’s 75th Anniversary.
About Michelle Kaufmann Designs
Michelle Kaufmann Designs (MKD) is a full service design/build architectural firm that specializes in sustainable, innovative, high-quality modular architecture. The goal of her company is to make it easier for people to build green and live a more sustainable lifestyle. MKD was founded in 2002 and is headquartered in Oakland, CA. MKD owns and operates its own factory, mkConstructs, located just outside Seattle, WA. mkConstructs builds homes for California, Washington, Oregon and Hawaii. Michelle Kaufmann Designs works with key factory partners to handle increasing volume and expanded territories. More information can be found at www.michellekaufmann.com
About the Museum of Science and Industry
The Museum of Science and Industry’s mission is to inspire the inventive genius in everyone by presenting captivating and compelling experiences that are real and educational. The Museum first opened its doors on June 19, 1933.
In 2008—more than 175 million guests later—the Museum commemorates its 75th Anniversary with a year-long celebration. Located at 57th Street and Lake Shore Drive, the Museum is open every day of the year except December 25. Regular Museum hours are 9:30 a.m. until 4 p.m., Monday through Saturday, and 11 a.m. until 4 p.m. on Sunday. Extended summer hours, until 5:30 p.m. each day, will be offered from May 24 to Sept. 1. The Museum offers indoor parking and is accessible by CTA and Metra. The Museum is supported in part through the generosity of the people of Chicago through the Chicago Park District. For more information, visit the Museum’s Web site at www.msichicago.org or call (773) 684-1414 or (800) GO-TO-MSI outside of the Chicago.
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