Cash for Caulkers

by Larry Levin

In the latest idiotic idea to "get the economy moving," President Obama will soon be introducing the latest way the government can remove money from your wallet to give to someone else. CNN called this latest dimwitted idea "cash for caulkers."


http://money.cnn.com/2009/12/08/news/economy/president_energy/


NEW YORK (CNNMoney.com) -- President Obama proposed a new program Tuesday that would reimburse homeowners for energy-efficient appliances and insulation, part of a broader plan to stimulate the economy.

The administration didn't provide immediate details, but said it would work with Congress on crafting legislation. Steve Nadel, director at the American Council for an Energy-Efficient Economy, who's advising on the bill, said a homeowner could receive up to $12,000 in rebates.

This could cost a LOT of money when this boondoggle is over.

We know energy efficiency "creates jobs, saves money for families, and reduces the pollution that threatens our environment," Obama said. "With additional resources, in areas like advanced manufacturing of wind turbines and solar panels, for instance, we can help turn good ideas into good private-sector jobs."

This will create few jobs, COST families thousands of dollars, and reduce little to no pollution.

The plan will likely create a new program where private contractors conduct home energy audits, buy the necessary gear and install it, according to a staffer on the Senate Energy Committee and Nadel at the American Council for an Energy-Efficient Economy.

Can you see FRAUD coming? I sure can!

Big-ticket items like air conditioners, heating systems, washing machines, refrigerators, windows and insulation would likely be covered, Nadel said.

Hmm, so if you can't afford it President Obama is (bless his heart) ready, willing, and able to take from you to give your neighbor. Should your neighbor buy used appliances? Should he buy a smaller home so he can afford new appliances? Should he rent and let the landlord pay for these upgrades since he can't afford them? HELL NO! If you still have money/wealth to be had, our president will take it and pass it out like free samples at Costco.

Based on earlier bills, consumers might be eligible for a 50% rebate on both the price of the equipment and the installation, up to $12,000, said Nadel. So far, there is no income restriction on who is eligible. That would mean a household could spend as much as $24,000 on upgrades and get half back.

Didn't it say this would SAVE money? Not so much.

On Mish's blog a reader quickly sends in a cost analysis.

Here is a present value calculation on spending $12k out of pocket to improve efficiency.

Average home KW/hr usage: 10,656 KW/hr
Average KW/hr cost: $0.113 KW/hr
Average yearly cost: $1,204
Estimated 20% savings: $240
Residential Energy Inflation: 3.3%
Full Program cost to household: $12,000
Discount rate: 7%

At the end of 20 years you have a Present Value of ($8614). Homeowners would have to save ~$850/yr from year one on their energy bills for this to make sense!

Uh-huh, saves money does it?


Previous Day's Trading Room Results:

Trade Date: 12/15/09

E-Mini S&P Trades*
(before fees and commissions):


1) B/away sell @ 8:32am at 1104.50 = b/e (1 lot)

2) OTF buy @ 10:42am at 1107.50 = b/e (1 lot)

3) FT sell @ 2:54pm at 1103.25 = +0.25 (1 lot)

4) Algorithm positions (3)

5) "Reading the Tape" positions (1) ...combined Secret's, Algo, & "Reading the Tape" total...-0.25



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