Electric Car Company Building Vehicles in Finland After Obtaining US Gov't Loan From Obama Administration

The Obama Administration and Department of Energy are defending a $529 Million loan to Anaheim, CA-based electric car manufacturer Fisker after a report from ABC News on Thursday highlighted the fact that two years ago, the Administration approved the company shifting production overseas to Finland.

Vice President Joseph Biden heralded the Energy Department's $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the company's manufacturing jobs are still limited to the assembly of the flashy electric Fisker Karma sports car in Finland.

"There was no contract manufacturer in the U.S. that could actually produce our vehicle," the car company's founder and namesake told ABC News. "They don't exist here."

Henrik Fisker said the U.S. money has been spent on engineering and design work that stayed in the U.S., not on the 500 manufacturing jobs that went to a rural Finnish firm, Valmet Automotive.

The loan to Fisker is part of a $1 billion bet the Energy Department has made in two politically connected California-based electric carmakers producing sporty -- and pricey -- cutting-edge autos. Fisker Automotive, backed by a powerhouse venture capital firm whose partners include former Vice President Al Gore, predicts it will eventually be churning out tens of thousands of electric sports sedans at the shuttered GM factory it bought in Delaware. And Tesla Motors, whose prime backers include PayPal mogul Elon Musk and Google co-founders Larry Page and Sergey Brin, says it will do the same in a massive facility tooling up in Silicon Valley.

Fisker is more than a year behind rolling out its $97,000 luxury vehicle bankrolled in part with DOE money. While more are promised soon, just 40 of its Karma cars (below) have been manufactured and only two delivered to customers' driveways, including one to movie star Leonardo DiCaprio.

A department of Energy spokesman defended the loan to Fisker, saying that the company also plans on producing a $50,000 hybrid called the Nina at a shuttered General Motors plant in Delaware.

"The Department's funding was only used for the U.S. operations," Energy Department spokesman Dan Leistikow wrote. "The money could not be, and was not, spent on overseas operations. The Karma also relies on an extensive network of hundreds of suppliers in more than a dozen U.S. states."

He said the first part of the loan, $169 million, supported engineering work at Fisker's U.S. facilities as the company "developed the tools, equipment and manufacturing processes for Fisker's first vehicle" -- though that work so far has not contributed to a production line in the U.S.

But Leistikow said the rest of the loan is still supporting U.S. production of another vehicle line called the Nina.

"Fisker is using this funding to bring a shuttered General Motors plant in Delaware back to life and employing more than 2,500 workers. Fisker was attracted to this site in part by the opportunity to rehire some of the trained, dedicated workers who lost their jobs when that plant closed," Leistikow said.

However, industry sources are claiming that Fisker's production of the Nina at the Delaware site has been pushed back to mid-2013. Fisker claims that the car has been designed and built, but remains under wraps to maintain a competitive edge.

Moreover, according to a recent Forbes article, once off its electric motor (reportedly good for 32 miles) the Fisker's Karma hybrid actually gets worse gas mileage than a late model Ford Explorer SUV

Does anybody else remember the various factory and workshop tours that President Obama embarked upon during 'Recovery Summer' last year? All of them seemed to pivot around so called 'Green Jobs'- factories that made electric vehicle components, solar panels or batteries for hybrids. And it seems that this wasn't really by accident, either.

Holy Crap Carp! Startup Illinois Firm Successfully Marketing Invasive Fish Species to China

Ruled an invasive species by the US Fish & Wildlife Service in 2007, the Asian Silver carp was thought to have been introduced into the Midwest's ecosystem after an isolated pond containing them was flooded by the Mississippi River. While the fish doesn't prey on local species, it has a voracious appetite for plankton and no known natural predators in the USA and reproduces quickly, forcing out native species. Moreover, they can grow quite large- up to 20 pounds- and jump out of the water when spooked, knocking over unsuspecting boaters and fishermen.

Wildlife officials have resorted to poison and electrocution to halt the advance of the species to the Great Lakes, where they fear the species could flourish unchecked and force out even more indigenous species and disrupt the food chain.

After a failed attempt to market the fish to markets in China by an Illinois state trade envoy, an American refrigeration supplier selling equipment to Chinese customers named David Shu was approached by a Chinese customer who had heard about the problematic carp in Illinois.

"Why would they kill these great, tasty fish?" the customer asked Shu.

Shu contacted [former Illinois State Trade Director Ross] Harano, who by then was in the private sector. Illinois carp needed a marketing hook, they decided. The "wild-caught" slogan sounded good.

Asian carp have a habit of jumping out of the water, sometimes knocking fishermen from their boats. That nasty habit became a second slogan, "So much energy they jump."

Instead of targeting Chinese housewives, they would target upscale restaurants.

Chinese carp is raised on fish farms and in polluted rivers. It tastes "muddy," says Harano, who says Illinois fish taste better.

Shu and Harano secured a supply from Big River Fish, where both men now work, with Shu representing the company in China.

They interested a Chinese food distributor, who sent a fish expert to the Big River plant in Pearl.

"He pulled a fish out of the package and put the gill in his mouth, Smith said. "'This fish is two days old.' He tasted another one and said, 'This one's fresh — caught today.' He really knew fish."

Fortified by a $2 million grant from the state of Illinois, Smith is now planning to move into an 80,000-square-foot fish processing plant. The number of employees should jump from 12 to 61.

Big River is housed in a small former chicken slaughterhouse. These days, tons of carp arrive at the plant's door, are gutted and sent to a freezer. There, temperatures of 30 below zero and a 20-mile-per-hour wind freeze them solid.

[OK- the $2 million grant going to a former state official for a startup smacks of more than just a little of crony capitalism, but aisde from that, I thought it was a pretty good idea- NANESB!]

The 30 million pound order from Big River Fish co seems to be part of a trend of American companies managing to find a niche to serve Chinese markets and manufacturers after losing ground over the last decade.

Although the invasive Silver Carp seems to be finding a its place among China's noveau riche as a freshly served delicacy, there is no word yet on whether wealthy or famous Chinese such as Gong Li (above, in modified cheongsam at a movie premiere- yay cheongsams!) have given their seal of approval

Another Day, Another Heavily Subsidized 'Green Energy' Plant Shuts Down

This time it's in California by the San Francisco Bay area. Employees working the evening shift at Solyndra's Fremont, CA plant were met by the CEO who gave them the news as they were coming off of their shift Wednesday morning.

Solar-cell maker Solyndra announced Wednesday that it will close its remaining Fremont factory, lay off its 1,100 employees and file for bankruptcy.



The news marked an abrupt end for a company once considered among the most innovative in a fast-changing industry. The bankruptcy also represents a high-profile failure for a federal stimulus program that gives loan guarantees to green-tech manufacturers.



Solyndra was the first company to win one of the guarantees, receiving $535 million in 2009 to build its second factory in Fremont less than a mile from the company's original plant. Both President Obama and former Gov. Arnold Schwarzenegger toured the new plant, citing it as a symbol of the nation's economic recovery and commitment to a green economy.



But Solyndra, whose solar modules are thin tubes rather than flat panels, struggled to compete against a flood of low-priced solar cells pouring out of heavily subsidized factories in China

Solyndria had backed out of a proposed IPO on 2010 as well. As far back as February, Congress had been probing into how exactly Solyndria secured the $535 million in financeial aid.



Earlier this month, Evergreen Solar- which had recieved more than $58 million in financial aid from the State of Massachusetts- filed for bankruptcy.

How President Obama Spent The Summer- Not to Mention Our Precious Money and TIme

After the unprecedented sovereign credit rating downgrade from Standard & Poors earlier this month, President Obama took it upon himself to allay concerns over the economy and high unemployment rate by embarking upon a multi-state 100% NOT-a-campaign-tour "listening tour" through the Midwest.



Eager to demonstrate to midwestrners that he was no out-of-touch limousine liberal, Obama left the Presidential limo back in Washington D.C. and instead embarked upon his midwest road trip with two new motorcoaches that the Secret Service ordered in July 2010 for $1.1 million apiece.







And what better way to show the people of the midwest that you are serious about the economy, American job creation and living within your means than by pulling into town in a brand new, armoured Canadian made motorcoach escorted by a 40+ vehicle motorcade?



After a terse exchange with a local Tea Part activist in Decorah, IA and botching the name of one of the companies that was hosting a town hall, it was off to Martha's Vineyard- that summertime playground of the wealthy and powerful- for some well deserved R&R! But not to worry, as President Obama would manage to find time between golf games to issue two executive orders- one was regarding diversity in the federal workplace while the other would reportedly allow nearly 300,000 illegal immigrants to avoid deportation and receive work permits- not word on whether or not this amnesty-through-executive-order will include his uncle. He also hinted at announcing a new jobs plan when Congress returned from summer recess.



When he wasn't spending time with his family or golfing on Martha's Vineyard, the President managed to work in visits to wealthy donors on the island. Alas, with Hurricane Irene's approach, the President and First Family had to cut their vacation short by about 12 hours so that Obama could swoop in and take charge at the National Hurricane Center.



Despite the strong Democrat voting bloc in the Northeastern states struck by Irene, the President has made no plans to visit those states to view the damage firsthand or meet survivors, despite Democrat lawmakers in New Jersey urging the President to visit the stricken areas. Instead, Obama will be travelling out to California for more fundraising in Hollywood and silicone valley next month.



As for that highly anticipated jobs speech that President Obama had been promising since his Midwest road trip, the Administration attempted to schedule it before both the senate and House the same night as the GOP Presidential debates next week. Speaker of the House John Boehner declined the President's initial September 7 deadline pointing out that it would be their first day back from the summer recess and offered Sept 8th as an alternative. Although the White House seems receptive to that date, that Thursday is also supposed to have the season opener for the NFL with the Saints taking on the Packers.

BUMPED 8/5: USA Loses S&P AAA Credit Rating; Dow Plummets More Than 500 Points in One Day

In it's worst single day since the 2008 Subprime meltdown, the Dow Jones fell 512 points on Thursday, wiping out their gains for the year in one afternoon. The 4.31% loss would be the market's biggest single-day loss since October 2008. Declining stocks outnumbered stocks that finished ahead on the day by a 14 to 1 margin.

Meanwhile, the NASDAQ was down 2.68 on Thursday. Gold prices pulled back slightly from an all-time high to end at $1652 an ounce while oil dropped down from $92 a barrel to $83.

The losses weren't limited to the NYSE or NASAQ either. North of the border, the TSX Composite dropped 3.4% while in Asia the Nikkei was down 3.72%, Straits Time was down 3.61% and the Hang Seng index plunged 4.29% overnight.

Analysts believe that a concerns over the economy, high unemployment numbers, the recently passed debt ceiling deal and the ongoing Eurozone crisis played a part in Thursday's selloff.

The massive selloff comes a day before the July jobs report is set to be released, but investors and analysts have even less reason to optimistic as far as that's concerned.

Curiously, a number of experts that spoke out in favor of the debt ceiling cautioned that this was exactly the scenario the markets would face if the ceiling wasn't raised.

UPDATE 8/5:: The markets closed on a mixed note Friday afternoon, with the Dow-Jones up 60 (0.54%) and the NASDAQ down 24 points (0.94%). However, that was nothing compared to the bombshell that was dropped after the markets closed on Friday afternoon.

Credit rating agency Standard & Poor's on Friday lowered the nation's AAA rating for the first time since granting it in 1917. The move came less than a week after a gridlocked Congress finally agreed to spending cuts that would reduce the debt by more than $2 trillion -- a tumultuous process that contributed to convulsions in financial markets. The promised cuts were not enough to satisfy S&P.

The drop in the rating by one notch to AA-plus was telegraphed as a possibility back in April. The three main credit agencies, which also include Moody's Investor Service and Fitch, had warned during the budget fight that if Congress did not cut spending far enough, the country faced a downgrade. Moody's said it was keeping its AAA rating on the nation's debt, but that it might still lower it

Interestingly, this is the exact opposite of what Treasury Secretary Tim Geithner said would happen if a debt ceiling agreement was reached.

Not surprisingly, the Obama Adminstration has gone after the messenger by shooting it with both barrels.

WASHINGTON, Aug 5 (Reuters) - The Obama administration attacked the credibility of the analysis underlying Standard & Poor's decision to downgrade the United States' top credit rating on Friday, saying it had found a $2 trillion error.

S&P was forced to remove the number from its analysis after Treasury officials discovered that the rating agency's estimates of the government's discretionary spending was $2 trillion too high, sources familiar with the discussions said.

There was evident dismay, and some anger, within the Obama administration at S&P's decision to downgrade U.S. debt despite the errors officials said they had found in the calculations.

"A judgment flawed by a $2 trillion error speaks for itself," a Treasury spokesman said after S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about growing budget deficits.

Also unsurprisingly, Senate Majority leader Harry Reid (D-NV) used the occasion of the S&P's Downgrade announcement to call for tax increases.

[Hat tip: Jammie Wearing Fool: Sea of Syrah]

Georgia Company Offsetting the Trade Imbalance With China, One Pair of Chopsticks at a Time

In a rather curious bit of role-reversal, a Georgia company is exploiting a shortage of wood in China and abundant resources in southern Georgia to export chopsticks to Asia.

“Right now we are making about two million pairs of chopsticks per day but we are increasing," says Jae Lee, president of Georgia Chopsticks. "End of this month, we’ll have seven machines coming in, so it’ll increase to like four million per day. End of this year, we’ll produce 10 million per day.”

Lee, a Korean-American, says the global market for chopsticks is huge because about one-third of the world’s population uses them. Japan alone goes through about 23 billion pairs of the disposable utensils each year.

Most chopsticks are made in China, where several hundred manufacturers turn out 63 billion pairs annually. But they are running short of wood.

Wood is something the U.S. town of Americus - where Georgia Chopsticks is located - has plenty of.

“Rural Georgia and the cities of rural Georgia, they’re blessed with tons of natural resources," says David Garriga, who heads the local economic development council. "The Pacific Rim, especially areas of China and Japan, they’ve run out of wood, but we have an abundance of it.”

The sweet gum and poplars that are abundant throughout southern Georgia are ideal for the production of chopsticks. The straight, pliable and lightly colored wood doesn't require bleach or chemicals to modify their colors.

Every pair of chopsticks made at Lee's Cochran, GA based company is exported to Japan, China or Korea where they are sold in supermarkets. Sumter County Chamber of Commerce head David Garriga said that he has been contacted by other businesses from the Pacific Rim interested in doing business in and around Americus, GA. The most recently available figures list the unemployment rate in Sumter county in the neighborhood of 12.5% (contrasted with Georgia's 9.7%).

In recent years, there has been something of a trend where businesses from China and elsewhere in the Pacific Rim have been looking to do business in the Southeastern USA. While labor costs are higher than in China, this is offset by lower costs for the property, utilities and certain tax credits that Chinese entrepreneurs are taking advantage of. Industrial real estate in the USA can be fetch not even 25% the costs in China while maintaining a presence in the USA also helps them respond more rapidly to any number of supply-chain issues.

Korean model in cheongsam

While exporting chopsticks to the People's Republic of China is somewhat ironic and good news for the people of Sumter county, Ga, I feel that the trade imbalance with China hasn't truly been adressed until the United States begins exporting cheongsams to mainland China.

Canada Elects Grown-Ups; Unemployment Rate Inexplicably Drops to 7.6% One Week Later

Barely a week after the federal elections in Canada that gave incumbent Prime Minister Stephen Harper a majority in Parliament, Statistics Canada announced that job growth had exceeded nearly three times beyond most economists forecasts for the month of April.

Employment rose by 58,300 after a March decline of 1,500, Statistics Canada said today in Ottawa. The jobless rate fell to 7.6 percent from 7.7 percent, as the labor force grew by 47,400. Economists forecast no change in unemployment and 20,000 new jobs in Bloomberg News surveys that had 24 and 25 estimates. The largest estimate was for 40,000 new jobs.

“While one can quibble with the underlying quality of the hiring, given that it was led by part time workers, the overall picture is one of an economy moving gradually back to full employment,” Avery Shenfeld, chief economist at CIBC World Markets in Toronto, wrote in a note to clients.

Most of Canada’s employment gains in April were concentrated in Ontario, the country’s most populous province, and Newfoundland, one of the smallest.

Newfoundland added 3,100 jobs in a province with a working- age population of 429,100, reducing the unemployment rate to 11.1 percent from 12.4 percent, the lowest since comparable records began in 1976.

“Firm crude oil prices and steady production levels are contributing to this impressive performance,” said Sonya Gulati, an economist at Toronto-Dominion Bank.

The province’s jobless rate has fallen 3.8 percentage points since July. The provincial government reported a C$59 million surplus for the fiscal year that ended March 31 as higher oil prices led royalty gains. Newfoundland had earlier forecast there would be a C$194 million deficit.

Ontario added 54,800 jobs in April, Statistics Canada said, and unemployment declined to 7.9 percent from 8.1 percent.

Contrast that with 'unexpected' high unemployment numbers and slow economic growth here in the USA that quite frankly, Stevie Wonder could've seen coming from a mile away.

The 30-year high for Canada's unemployment rate was in December of 1983 at 13.1% while the all time low was in September 2007 at 5.9% [1] - about a year and a half after Harper was sworn in as Prime Minister.

1- Trading Economics interactive chart

Unemployment Rates 'Unexpectedly' Rise, Sun 'Unexpectedly' Sets in the West

I'd say that we all should make a drinking game out of the most recent batch of economic news being classified by our media or government as 'unexpected', but I wouldn't want to be held liable for somebody ending up with alcohol poisoning.

An unexpected jolt in people applying for unemployment benefits last week raised the number of applications to a seasonally adjusted 412,000.

It was the first increase in three weeks, and could be a sign that people who stopped looking for work are coming back, but the 27,000 additional requests for assistance for the week ending April 9 put the jobless aid figure at its highest point since mid-February.

Applications near 375,000 are consistent with a sustained increase in hiring. Applications peaked during the recession at 659,000.

The four-week average of applications, a less volatile measure, rose to 395,750. Applications have dropped by about 6 percent over the past two months.

Companies added more than 200,000 jobs in March for the second straight month, the first time that has happened since 2006. The unemployment rate fell to a two-year low of 8.8 percent and has dropped a full percentage point since November.

However, a more sobering reason for the drop is that the number of people who are either working or seeking a job is surprisingly low for this stage of the recovery. People without jobs who aren't looking for one aren't counted as unemployed. Once they start looking again, they're classified as unemployed and the unemployment rate can go back up.

It's like I said back when this blog was only a few weeks old- insist that higher unemployment numbers will be the 'new normal' from here on out and that we're in a robust economic recovery nonetheless. Even some of the Wisconsin state Democrats who fled to Illinois attempted to justify their tactics by saying that Gov. Walker's budget proposal limiting public employee collective bargaining and requiring public workers to pay more towards their retirement and healthcare plans was unnecessary because the nation was supposedly in the midst of an economic recovery.

Yes- apparently LOTS of economic recoveries feature soaring unemployment, a cratering housing market, record high food, fuel and commodity prices and the dollar plummeting in value with each passing week.