Today people are queuing up for hybrids for a host of reasons. More mileage, cleaner emissions, less dependence on imported oil and the likes.
So how do conventional cars really match up to hybrids. Well here's a look.
As far as fuel efficiency goes the odds are clearly in favor of hybrids. You could get savings of 20%-25% on your gasoline bills if you are driving a hybrid. But before you get rid of your gas guzzler and rush off to the nearest Toyota/Honda dealer there are some things you must consider.
There is a lot of hype about the fuel efficiency of a hybrid. In fact the mileage that you actually get may be lower than what is advertised. This is because driving conditions in which the battery of a hybrid gets recharged fastest is by deceleration and regenerative braking. This simply may not always happen, resulting in a noticeable difference between the advertised and the actual mileage.
Then there is the premium that you pay for a hybrid: It shouldn't be anything less than $2,000 . If you consider the fuel that you save then at the current gas prices you will need to drive about 150,000 miles before you recover the initial difference in cost. If you don't drive too much it could be at least a ten year wait. What's more hybrid's store energy in large battery packs. These are costly to replace, more than $2,500. Although they last a long time, the cost of replacement is certain to drive down the resale value of used vehicles.
Again mixing of electric power and traditional internal combustion engines requires a lot of fine tuning. Then there are risks associated with handling powerful batteries. Small hiccups may mean a trip to sophisticated garages rather than the mechanic round the corner. The result, more money spent on maintenance.
However inspite of these apparent drawbacks it seems hybrids will win in the long run. As their production increases, prices are bound to come down because of economies of scale. Then the federal government offers a tax credit for buying a hybrid, which is about $2,000 for a 2007 Honda Civic. Additionally some companies also offer cash incentives to employees buying hybrids.
All in all, no matter what your calculator tells you now , hybrids are the cars of the future. Even today the extra dollars spent on one are a small price to pay for preserving the environment.
Japanese vs.US Hybrid Cars-Why the Difference?
Hybrids are the fastest growing segment of the American car market.In 2006 the sales of hybrids rose to 1% of total car sales ,an increase of 22%over the previous year.This high rate of growth looks set to continue with the public growing increasingly concerned about depleting world oil resources and the environmental impact of fossil fuels.
The figures speak for themselves.Hybrids can cut fuel consumption by up to as much as 40%.As far as cleaner environment goes the new Ford Escape Hybrid produces less than one pound of smog producing pollutants in a 15,000 mile drive.Its significance can be understood only when you consider that for non hybrid passenger vehicles the corresponding figure is 67 pounds!
It was Toyota which first demonstrated the hybrid-electric concept at the Tokyo Auto Show in 1995.At that time Toyota set an aggressive development schedule to bring the Prius to the Japanese market in two years time in an effort to be the first car company in the world to offer a production hybrid-electric car for sale.And succeed they did.The Prius was offered to the Japanese public in 1997 before the signing of the Kyoto Protocol.
The Prius went on sale in the US in 2000 and was an instant success.The first hybrid electric model in the US market,however, was the Honda Insight in 1999.The Honda Civic hybrid went on sale in 2002.
The year 2004 will be remembered for the launch of the second generation Prius.In addition the first full size pickup hybrids the Dodge Ram and the Chevy Silverado as well as the first SUV hybrid the Ford Escape hit the streets this year.
The success of the 2004 Prius led some experts to call it the most successful car model of all times.At one time it sold at a premium of $2000 over its sticker price!Even today the Prius sells more than all the other models combined.
So what did Toyota and the other Japanese automakers get right which the US automakers got wrong?Nothing really because it was just a question of focusing on a particular area.US automakers concentrated all along on pure electric cars and hydrogen fuel cars.While electric cars were introduced in the market they did not become popular because of limitations of size,speed and range.The hydrogen fuel car is still under development although GM hopes to introduce it in the market by 2010.
Of late the US manufacturers have sought to duplicate the success of the Prius.Encouraged by the success of the Ford Escape they have directed their energies into developing an American hybrid.But unlike the Ford escape which has been built under a licensing agreement with Toyota,GM's forthcoming Chevy Tahoe hybrid is st to be a very important event for the American auto industry.
Why so?The Prius recharges its battery pack through deceleration and regenerative braking.Thus while it improves fuel economy significantly in the city its results are not so spectacular on the highways.The USA is a huge country with a vast highway network.The Tahoe hybrid and all GM dual mode hybrids offer some additional tricks on the highway, which is very important in the US.
The year 2008 therefore promises to be an interesting one for the US hybrid industry.While none of the models are going to match the efficiency of Toyota,US automakers are clearly back in the reckoning.
The figures speak for themselves.Hybrids can cut fuel consumption by up to as much as 40%.As far as cleaner environment goes the new Ford Escape Hybrid produces less than one pound of smog producing pollutants in a 15,000 mile drive.Its significance can be understood only when you consider that for non hybrid passenger vehicles the corresponding figure is 67 pounds!
It was Toyota which first demonstrated the hybrid-electric concept at the Tokyo Auto Show in 1995.At that time Toyota set an aggressive development schedule to bring the Prius to the Japanese market in two years time in an effort to be the first car company in the world to offer a production hybrid-electric car for sale.And succeed they did.The Prius was offered to the Japanese public in 1997 before the signing of the Kyoto Protocol.
The Prius went on sale in the US in 2000 and was an instant success.The first hybrid electric model in the US market,however, was the Honda Insight in 1999.The Honda Civic hybrid went on sale in 2002.
The year 2004 will be remembered for the launch of the second generation Prius.In addition the first full size pickup hybrids the Dodge Ram and the Chevy Silverado as well as the first SUV hybrid the Ford Escape hit the streets this year.
The success of the 2004 Prius led some experts to call it the most successful car model of all times.At one time it sold at a premium of $2000 over its sticker price!Even today the Prius sells more than all the other models combined.
So what did Toyota and the other Japanese automakers get right which the US automakers got wrong?Nothing really because it was just a question of focusing on a particular area.US automakers concentrated all along on pure electric cars and hydrogen fuel cars.While electric cars were introduced in the market they did not become popular because of limitations of size,speed and range.The hydrogen fuel car is still under development although GM hopes to introduce it in the market by 2010.
Of late the US manufacturers have sought to duplicate the success of the Prius.Encouraged by the success of the Ford Escape they have directed their energies into developing an American hybrid.But unlike the Ford escape which has been built under a licensing agreement with Toyota,GM's forthcoming Chevy Tahoe hybrid is st to be a very important event for the American auto industry.
Why so?The Prius recharges its battery pack through deceleration and regenerative braking.Thus while it improves fuel economy significantly in the city its results are not so spectacular on the highways.The USA is a huge country with a vast highway network.The Tahoe hybrid and all GM dual mode hybrids offer some additional tricks on the highway, which is very important in the US.
The year 2008 therefore promises to be an interesting one for the US hybrid industry.While none of the models are going to match the efficiency of Toyota,US automakers are clearly back in the reckoning.
Is The U.S. Justice System Flawed?
A report released recently informs us that almost 2.2 million people are in US jails. This marks an eight fold rise in the number of Americans in prison since 1970.It costs the taxpayer about $65 billion annually. The report has been produced by the JFA Institute a Washington criminal justice research group.
The impact of such a large number of people in prison is awesome.Once you include the families the prisoners leave behind,the prison guards and the prison administration, the lawyers and the justice system, it would seem that the system affects almost everybody.
The benefits of the present system are clearly visible. The streets are definitely safer.The homicide rate in the 1990's fell by 43% and continues to decline. The value of a safe neighborhood certainly outweighs the costs of imprisonment.
On the flip side, the prison population is set to increase by almost 200,000 over the next five years and it will cost another $27.5 billion to build and run the additional prisons that will be needed.Such a judicial system also serves to deepen the divide between the privileged and the disadvantaged.This is because the disadvantaged, the less skilled and the less educated are more likely to end up in jail.Spending their productive years in jail not only reduces their lifetime earnings but also adversely affects the prospects of re-employment upon their release.It also certainly affects the financial prospects of the families they leave behind.Critics also argue that in spite of such a harsh system the crime rate is where it was in 1973.
So what needs to be done about it. Before attempting an answer it is necessary to understand the reasons that lie behind this prison boom.It happened because crime increased and there seemed to be no way to control it except by imposing tougher penalties.This resulted in longer jail sentences being handed out with fewer chances of an early release.The war on drugs led to the arrest of a large number of small time users and drug dealers.Presently almost 60% of prison inmates are in for drug offenses.Supreme Court Justice Anthony M. Kennedy remarked:'Our resources are misspent, our punishments too severe, our sentences too long.'
Maybe it's time to give the entire system a re look.To start with, prison sentences for petty crimes could be shortened and prisoners could be made eligible for early release in deserving cases.Alternate forms of punishment also need to be considered.There is also a case for being a bit lenient on 'soft drugs.'Debates on legalizing marijuana for medical use seem to indicate that this option is being seriously considered.
An editorial in The Washington Times said that prisoners deserve punishment.'But we shouldn't forget that a vast majority will also be returned to society, which has as much at stake in their rehabilitation as they do.'
The impact of such a large number of people in prison is awesome.Once you include the families the prisoners leave behind,the prison guards and the prison administration, the lawyers and the justice system, it would seem that the system affects almost everybody.
The benefits of the present system are clearly visible. The streets are definitely safer.The homicide rate in the 1990's fell by 43% and continues to decline. The value of a safe neighborhood certainly outweighs the costs of imprisonment.
On the flip side, the prison population is set to increase by almost 200,000 over the next five years and it will cost another $27.5 billion to build and run the additional prisons that will be needed.Such a judicial system also serves to deepen the divide between the privileged and the disadvantaged.This is because the disadvantaged, the less skilled and the less educated are more likely to end up in jail.Spending their productive years in jail not only reduces their lifetime earnings but also adversely affects the prospects of re-employment upon their release.It also certainly affects the financial prospects of the families they leave behind.Critics also argue that in spite of such a harsh system the crime rate is where it was in 1973.
So what needs to be done about it. Before attempting an answer it is necessary to understand the reasons that lie behind this prison boom.It happened because crime increased and there seemed to be no way to control it except by imposing tougher penalties.This resulted in longer jail sentences being handed out with fewer chances of an early release.The war on drugs led to the arrest of a large number of small time users and drug dealers.Presently almost 60% of prison inmates are in for drug offenses.Supreme Court Justice Anthony M. Kennedy remarked:'Our resources are misspent, our punishments too severe, our sentences too long.'
Maybe it's time to give the entire system a re look.To start with, prison sentences for petty crimes could be shortened and prisoners could be made eligible for early release in deserving cases.Alternate forms of punishment also need to be considered.There is also a case for being a bit lenient on 'soft drugs.'Debates on legalizing marijuana for medical use seem to indicate that this option is being seriously considered.
An editorial in The Washington Times said that prisoners deserve punishment.'But we shouldn't forget that a vast majority will also be returned to society, which has as much at stake in their rehabilitation as they do.'
Move Over G.M.-The Honda FCX Clarity Is Here!
Honda may have found the answer to $4 plus gas.It has started production of the FCX Clarity fuel cell car that goes on lease in California this year. It is the first regular production fuel cell car aimed at individuals. The others have been aimed at fleet operators. The response has been overwhelming. People have been literally falling over themselves to get a chance to drive the sleek four door car, and Honda has drawn a lottery to decide who will be among the around 100 lucky ones who get to drive it.Mind you, this is when leasers will have to pay $600 a month as lease charges plus extra for fuel. The $600 a month however includes both collision insurance and maintenance.Even then it is a bargain as each car is estimated to cost more than $300,000 to build.A gallon of hydrogen fuel costs about the same as as a gallon of gasoline, but you get two to three times the mileage with hydrogen. Although GM has about a six month start with its Chevy Equinox fuel cell vehicle, Honda has come up with a much more attractive car.
The car's V-flow fuel cell has been developed in-house by Honda. It uses hydrogen to generate electricity, which powers the 134hp electric motor. The car is a front wheel drive, and travels 270 miles on a full tank of hydrogen. It has a top speed of 100mph, and goes from 0-60mph in 10 seconds. Honda intends to develop up to 300 FCX Clarity models over the next three years.
But presently there is a big negative to using hydrogen as a fuel. Making hydrogen takes more energy than hydrogen produces. It is proposed to produce hydrogen from natural gas and the world's reserves of natural gas are limited. Till such time that hydrogen can be produced from sea water, the days of really cheap fuel are still far away.
The car's V-flow fuel cell has been developed in-house by Honda. It uses hydrogen to generate electricity, which powers the 134hp electric motor. The car is a front wheel drive, and travels 270 miles on a full tank of hydrogen. It has a top speed of 100mph, and goes from 0-60mph in 10 seconds. Honda intends to develop up to 300 FCX Clarity models over the next three years.
But presently there is a big negative to using hydrogen as a fuel. Making hydrogen takes more energy than hydrogen produces. It is proposed to produce hydrogen from natural gas and the world's reserves of natural gas are limited. Till such time that hydrogen can be produced from sea water, the days of really cheap fuel are still far away.
Hedge Fund Owner Cheats Investors Of $450 Mill,, Vanishes
Samuel Israel, founder of the Bayou hedge fund group has disappeared the day he was to begin a 20 year prison term for defrauding investors of $450 million. Police have put out 'Wanted' posters, and describe him as 'armed and dangerous.'
Founded in 1996, the fund raised about $300 million from investors, promising them that the fund would grow to $7.1 billion in ten years. The fund however never seems to have made any money and got along by overstating gains, or reporting gains where there were losses. In 1998, about three years after the fund was launched, international financial markets were in turmoil following the Asian crisis, and in America things were made worse by the threatened collapse of Long Term Capital Management. The fund made huge losses. In order to cover their losses the group approached investors for fresh money. In order to attract investors , Israel allowed them to join by bringing in a minimum of only $250,000, which is much smaller than the amounts typically demanded by hedge funds. He also waived his management fees and charged only 20% of the fund's profits as his remuneration. Simultaneously he hired a fresh firm of auditors who were willing to fake accounts to hide the mountain of losses the firm was saddled with.
But it was these very practices that started making people suspicious. As news got around about the true state of affairs, investigations were started, and in September 2005 the Commodity Futures Trading Commission filed a complaint in court alleging misappropriation and fraud.
In April of this year, Israel was sentenced to 20 years in prison and ordered to pay a fine of $300 million after pleading guilty to defrauding investors. On the 10th of June he vanished just hours before he was to begin serving his sentence. It could be suicide, but people suspect that he has faked his death and is on the run.
Founded in 1996, the fund raised about $300 million from investors, promising them that the fund would grow to $7.1 billion in ten years. The fund however never seems to have made any money and got along by overstating gains, or reporting gains where there were losses. In 1998, about three years after the fund was launched, international financial markets were in turmoil following the Asian crisis, and in America things were made worse by the threatened collapse of Long Term Capital Management. The fund made huge losses. In order to cover their losses the group approached investors for fresh money. In order to attract investors , Israel allowed them to join by bringing in a minimum of only $250,000, which is much smaller than the amounts typically demanded by hedge funds. He also waived his management fees and charged only 20% of the fund's profits as his remuneration. Simultaneously he hired a fresh firm of auditors who were willing to fake accounts to hide the mountain of losses the firm was saddled with.
But it was these very practices that started making people suspicious. As news got around about the true state of affairs, investigations were started, and in September 2005 the Commodity Futures Trading Commission filed a complaint in court alleging misappropriation and fraud.
In April of this year, Israel was sentenced to 20 years in prison and ordered to pay a fine of $300 million after pleading guilty to defrauding investors. On the 10th of June he vanished just hours before he was to begin serving his sentence. It could be suicide, but people suspect that he has faked his death and is on the run.
U.S. Economic Slowdown Threatens Deflationary Spiral.
When the subprime crisis first broke in August of last year, few anticipated the extent and depth of the crisis. At that time it was estimated that subprime related losses would be about $140 billion. The situation was bad but not impossible and Bernanke rightly assumed that simple adjustments to interest rates would take care of the situation. But the banks and financial institutions had hidden their risky investments too well in off balance sheet entities, to avoid regulatory supervision, as a result of which losses were grossly underestimated. As the magnitude of the crisis unfolded, there was panic all round and the Fed's primary task became one of saving the financial system, never mind inflation or the value of the dollar.
In order to prop up the financial system an unprecedented amount of money has been pumped into the market. It is this growth in money supply which lies at the root of inflation, although it has become fashionable to blame emerging market growth and commodity prices for it. Inflationary pressures coupled with falling home prices, have finally taken their toll on consumer sentiment. A near stagnant economy, together with falling asset prices and the devaluation of the dollar has impoverished the American people.
The economic numbers released lately paint a picture of the economy which is not as grim as expected, which has prompted many experts to stick their necks out and predict that the worst is over. But this may not be the case, and in fact the worst may just be about to begin. This is because in order to fight inflation the Fed will have to increase interest rates sharply, although it may choose to wait till after the November elections to do so. Central banks all over the world are expected to follow the Fed in raising interest rates to tame runaway prices. The impact of rising interest rates on an economy already teetering on the brink of recession is almost a foregone conclusion. Economic activity in the US is expected to decline further. These recessionary conditions will put further pressure on asset prices and they are expected to fall across the board. Bond prices will fall as interest rates rise, as will stocks, as higher interest rates eat into corporate profitability and falling demand reduces their ability to raise prices. Home prices are already projected to continue falling till the end of the year at the very least.
Banks and other financial institutions have already written down the value of their assets by about $389 billion, which has impacted their share prices. Reduced economic activity will impact future revenues and reduce earnings as well as valuations. The only chance of avoiding this scenario would be if by some miracle oil and commodity prices were to come down sharply. If this happens without having to raise interest rates too far, a deflationary spiral may perhaps be avoided.
In order to prop up the financial system an unprecedented amount of money has been pumped into the market. It is this growth in money supply which lies at the root of inflation, although it has become fashionable to blame emerging market growth and commodity prices for it. Inflationary pressures coupled with falling home prices, have finally taken their toll on consumer sentiment. A near stagnant economy, together with falling asset prices and the devaluation of the dollar has impoverished the American people.
The economic numbers released lately paint a picture of the economy which is not as grim as expected, which has prompted many experts to stick their necks out and predict that the worst is over. But this may not be the case, and in fact the worst may just be about to begin. This is because in order to fight inflation the Fed will have to increase interest rates sharply, although it may choose to wait till after the November elections to do so. Central banks all over the world are expected to follow the Fed in raising interest rates to tame runaway prices. The impact of rising interest rates on an economy already teetering on the brink of recession is almost a foregone conclusion. Economic activity in the US is expected to decline further. These recessionary conditions will put further pressure on asset prices and they are expected to fall across the board. Bond prices will fall as interest rates rise, as will stocks, as higher interest rates eat into corporate profitability and falling demand reduces their ability to raise prices. Home prices are already projected to continue falling till the end of the year at the very least.
Banks and other financial institutions have already written down the value of their assets by about $389 billion, which has impacted their share prices. Reduced economic activity will impact future revenues and reduce earnings as well as valuations. The only chance of avoiding this scenario would be if by some miracle oil and commodity prices were to come down sharply. If this happens without having to raise interest rates too far, a deflationary spiral may perhaps be avoided.
High Oil Prices May Cause De-Globalization!
The global economy today is more integrated than ever before. Globalization has on the whole, brought tremendous benefits to the participating nations.Among other reasons, the unprecedented worldwide economic boom witnessed in the last few years was due to manageable oil prices. I say manageable because, while oil prices which were around $30 a barrel before the start of the US led invasion of Iraq, rose to about $60 a barrel by the end of 2006, they were still well below earlier peaks after adjusting for inflation. Trade between nations has grown exponentially, particularly between the US and other Asian countries, which have been able to successfully leverage their low wage structure. In the process these Asian countries, notably China, came to enjoy sustained double digit rates of growth, which lifted a large proportion of its huge population out of poverty. The cheap goods which they exported to the US, helped in keeping inflation there in check and prevented any major increases in wages. This led to a tremendous improvement in US corporate productivity and profitability.
Now the dream is coming to an end.The cost of transporting both goods and people is rising at such a fast pace that it threatens to derail global trade. Shipping costs to the US from Asia have already tripled since 2000, and are set to rise further as oil prices show no signs of coming down.Not only is the cost of shipping goods to the US from China increasing, China finds that the cost of importing raw materials is increasing as well, which will undoubtedly impact its profitability. The rising cost of imports will further increase inflationary pressures within the US economy and will make the Fed's job of restraining inflationary pressures more difficult. The Fed is well aware of the problem that it faces, and in recent comments Bernanke has focused more on the dangers of inflation with the housing crisis taking a back seat. It has to perform a tough balancing act in the days to come. Faced with expensive imports, consumers are likely to switch their demand to locally manufactured goods, which though being good for local industry as it gives them pricing power, will certainly impact global trade. The process of de-globalization seems to have begun.
Now the dream is coming to an end.The cost of transporting both goods and people is rising at such a fast pace that it threatens to derail global trade. Shipping costs to the US from Asia have already tripled since 2000, and are set to rise further as oil prices show no signs of coming down.Not only is the cost of shipping goods to the US from China increasing, China finds that the cost of importing raw materials is increasing as well, which will undoubtedly impact its profitability. The rising cost of imports will further increase inflationary pressures within the US economy and will make the Fed's job of restraining inflationary pressures more difficult. The Fed is well aware of the problem that it faces, and in recent comments Bernanke has focused more on the dangers of inflation with the housing crisis taking a back seat. It has to perform a tough balancing act in the days to come. Faced with expensive imports, consumers are likely to switch their demand to locally manufactured goods, which though being good for local industry as it gives them pricing power, will certainly impact global trade. The process of de-globalization seems to have begun.
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