27. August 2009 by Dan Walkow, CFA, CMT.

All good fads come to an end and so it goes with the alternate energy sector. There is a glut of solar panels on the market with prices dropping around 40% year over year with the outlook for more supply and even lower prices.

Biofuels ( remember not more than a year ago the stories about people boiling bio-mash in there garages ) are not far behind. To wit from the WSJ:

The biofuels revolution that promised to reduce America’s dependence on foreign oil is fizzling out.

Two-thirds of U.S. biodiesel production capacity now sits unused, reports the National Biodiesel Board. Biodiesel, a crucial part of government efforts to develop alternative fuels for trucks and factories, has been hit hard by the recession and falling oil prices.

The global credit crisis, a glut of capacity, lower oil prices and delayed government rules changes on fuel mixes are threatening the viability of two of the three main biofuel sectors — biodiesel and next-generation fuels derived from feedstocks other than food. Ethanol, the largest biofuel sector, is also in financial trouble, although longstanding government support will likely protect it. Read more here.

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27. August 2009 by Dan Walkow, CFA, CMT.

Some ETFs have gotten so big regulators are looking to cap them as ETFs like the US Natural Gas Fund is so big that they having trouble executing on the futures market and have to go to the shady swap market to trade. On the other hand there are more than 500 new ETFs on the launch pad with minimal seed funding.

Read the article here at the WSJ.

I have been a long time investor and advisor on ETFs but with these latest developments I am wary of them at this juncture. Not all but certainly the levered ones as well as he commodity ones.

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