Thursday, May 21, 2009
YP-Blog Relocated
We have now incorporated the blog into our website, where we can provide better features and functionality. You can find the relocated blog at: www.yellowstonepartners.com/ypblog
Wednesday, May 20, 2009
Economic Outlook- The Ted Spread
Throughout this recent economic malaise, much has been said about a “credit crunch,” an unwillingness of banks to lend to one another because of concern over the value of toxic subprime mortgage assets.
The way we measure the level of confidence between banks, and thus the willingness to lend and eliminate the frozen credit market, is by comparing the rate that banks charge one another to lend on a short term basis, to what the government charges to lend. The spread between these two rates is referred to as the TED Spread.
Historically, the trend has been a spread of .50 to 1.00. As you can see in the chart above, distrust reached its peak in October of 2008, when Lehman Brothers failed, and the spread leapt to over 4.00. In recent weeks as companies have reported earnings and the market has begun to rally, we’ve seen significant “thawing” in the credit market, and the spread has eased to .57. This has positive implications for the financial sector and for the economy overall.
The way we measure the level of confidence between banks, and thus the willingness to lend and eliminate the frozen credit market, is by comparing the rate that banks charge one another to lend on a short term basis, to what the government charges to lend. The spread between these two rates is referred to as the TED Spread.
Historically, the trend has been a spread of .50 to 1.00. As you can see in the chart above, distrust reached its peak in October of 2008, when Lehman Brothers failed, and the spread leapt to over 4.00. In recent weeks as companies have reported earnings and the market has begun to rally, we’ve seen significant “thawing” in the credit market, and the spread has eased to .57. This has positive implications for the financial sector and for the economy overall.
Wednesday, May 13, 2009
Idea Log-Advanced Batteries
The following article is an interesting evaluation of GE's plans the the advanced battery arena. Of particular interest is GE's stake in 123 Systems, Inc, a lithium battery manufacturer.
We have been following lithium trends since late 2008 and continue to believe that there is significant opportunity as demand for lithium shifts to larger and larger applications and the scope of applications broadens.
GE sees $1 billion potential in advanced batteries
By Scott Malone Scott Malone
NISKAYUNA, New York (Reuters) – General Electric Co (GE.N) plans to invest $100 million in a factory to build high-tech batteries for heavy equipment, which it believes could be a $1 billion business over the next decade.
The largest U.S. conglomerate plans to seek federal stimulus money to fund construction of the factory, near Albany, New York. Initially the factory will make batteries for GE's forthcoming hybrid railroad locomotive.
"We've always viewed the battery space would have to be something that GE is basic in, that we have competitive technology in and that could be a big growth business for us over time," said Jeff Immelt, chief executive of the world's largest maker of jet engines and electricity producing turbines.
"We've invested about $150 million so far in this innovation, this technology," Immelt said.
This is the first GE project to seek funding from the Obama administration's two-year, $787 billion economic stimulus program, of which alternative energy is a cornerstone.
Immelt said he hoped GE would seek federal funds for other ventures related to clean energy and healthcare information technology, though he noted that the Fairfield, Connecticut-based company will continue to invest in these areas regardless of government money.
The company's other investments on the battery front include a $55 million stake in A123 Systems Inc, which Detroit automakers General Motors Corp (GM.N) and Chrysler have chosen to supply batteries for their next-generation electric vehicles.
The move is part of GE's "Ecomagination" green business push, which it launched in 2005. Last year that venture generated $17 billion of revenue, ranging from sales of products such as electricity-producing wind turbines and high-efficiency jet engines to compact-fluorescent lightbulbs and highly efficient refrigerators.
Immelt said that GE expects to generate $20 billion in Ecomagination revenue this year and hit $25 billion in 2010. He added that he expects battery revenue to hit $500 million by 2015.
"The economy clearly gives us headwind, but we still see a fair amount of interest globally for these types of products," Immelt told Reuters in an interview.
A123 is focused on lithium-ion based batteries, while GE's new factory will produce batteries based on a sodium-metal halide technology. GE believes that lithium-ion batteries are better-suited for short bursts of intense power, such as are required to start a vehicle moving, with sodium-metal halide a better option when large amounts of power are needed over a long period of time.
"Hybrid locomotives, and the battery technology on board, could be an important part of how we ship goods by rail in the future," said Matthew Rose, CEO of No. 2 U.S. railroad Burlington Northern Santa Fe Corp (BNI.N), in a statement.
GE announced the move at its main research center in Niskayuna, New York, about 160 miles north of New York City. It expects the plant to open by 2011 and employ about 350 people.
(Reporting by Scott Malone; Editing by Brian Moss and Matthew Lewis)
We have been following lithium trends since late 2008 and continue to believe that there is significant opportunity as demand for lithium shifts to larger and larger applications and the scope of applications broadens.
GE sees $1 billion potential in advanced batteries
By Scott Malone Scott Malone
NISKAYUNA, New York (Reuters) – General Electric Co (GE.N) plans to invest $100 million in a factory to build high-tech batteries for heavy equipment, which it believes could be a $1 billion business over the next decade.
The largest U.S. conglomerate plans to seek federal stimulus money to fund construction of the factory, near Albany, New York. Initially the factory will make batteries for GE's forthcoming hybrid railroad locomotive.
"We've always viewed the battery space would have to be something that GE is basic in, that we have competitive technology in and that could be a big growth business for us over time," said Jeff Immelt, chief executive of the world's largest maker of jet engines and electricity producing turbines.
"We've invested about $150 million so far in this innovation, this technology," Immelt said.
This is the first GE project to seek funding from the Obama administration's two-year, $787 billion economic stimulus program, of which alternative energy is a cornerstone.
Immelt said he hoped GE would seek federal funds for other ventures related to clean energy and healthcare information technology, though he noted that the Fairfield, Connecticut-based company will continue to invest in these areas regardless of government money.
The company's other investments on the battery front include a $55 million stake in A123 Systems Inc, which Detroit automakers General Motors Corp (GM.N) and Chrysler have chosen to supply batteries for their next-generation electric vehicles.
The move is part of GE's "Ecomagination" green business push, which it launched in 2005. Last year that venture generated $17 billion of revenue, ranging from sales of products such as electricity-producing wind turbines and high-efficiency jet engines to compact-fluorescent lightbulbs and highly efficient refrigerators.
Immelt said that GE expects to generate $20 billion in Ecomagination revenue this year and hit $25 billion in 2010. He added that he expects battery revenue to hit $500 million by 2015.
"The economy clearly gives us headwind, but we still see a fair amount of interest globally for these types of products," Immelt told Reuters in an interview.
A123 is focused on lithium-ion based batteries, while GE's new factory will produce batteries based on a sodium-metal halide technology. GE believes that lithium-ion batteries are better-suited for short bursts of intense power, such as are required to start a vehicle moving, with sodium-metal halide a better option when large amounts of power are needed over a long period of time.
"Hybrid locomotives, and the battery technology on board, could be an important part of how we ship goods by rail in the future," said Matthew Rose, CEO of No. 2 U.S. railroad Burlington Northern Santa Fe Corp (BNI.N), in a statement.
GE announced the move at its main research center in Niskayuna, New York, about 160 miles north of New York City. It expects the plant to open by 2011 and employ about 350 people.
(Reporting by Scott Malone; Editing by Brian Moss and Matthew Lewis)
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