If you're an economist, like David H. Wang, you wake up some days muttering, "What has happened to the industrial base in the U.S. economy?"

The auto companies are practically on life support, and other sectors are paring-back operations, even as international competition mounts. Hundreds of thousands of jobs have been lost. How did this happen? Eight more years of industrial base decline without a viable plan to counteract it? And now, as a result of the financial crisis and de-leveraging, the prospect of a period of less-available credit threatens to delay economic recovery.

Well one remedy for the above, Wang argues, is to invest in the industrial sector via investing in the United States' infrastructure. And what's one project worthy of consideration? Investor T. Boone Pickens' plan to substantially increase domestic wind power via his Pickens Plan, Wang argued.

Pickens' investment fund has fallen on tough times, as of late. His BP Capital investment fund has shrunk by 60%, due to energy sector losses, and will drop to about $500 million after redemptions, by week's end, Pickens told CNBC Thursday. Pickens, who sees oil sector consolidation, expects the price of oil to recover to $100 per barrel in 2009. Oil Thursday closed down $1.81 to $65.69 per barrel.

Pickens Plan: a better investment than AIG?

Wang is less certain about a $100 oil price in 2009, but he is certain about the merit and benefits from investing in Pickens' project, and his argument is compelling. (Wang added that he does not have an investment stake in any power/energy company.)

Memo to T. Boone Pickens: before you write another book about the art of the comeback, make sure your comeback is complete and that your career is on stable ground.

On September 2, Pickens' book The First Billion Is the Hardest: Reflections on a Life of Comebacks and America's Energy Future hit the stores. Now he's in need of another comeback as a huge pullback in energy prices and investor withdrawals have sent the value of Pickens' hedge fund assets down to less than $500 million. When his fund peaked in June, he was managing $2 billion.

With the market in the toilet and investors fleeing for the exits, Pickens has reportedly moved the fund almost entirely into cash -- perhaps a sign that he has abandoned his long-term bullish outlook on oil prices.

However, Pickens' contributions to America now go beyond wealth-building. While he initially made his name as a Carl Icahn-style corporate raider back in the 1980s, he's moved on to finding solutions to our dependence on foreign oil. The Pickens Plan has garnered the support of the Sierra Club, former Clinton Chief of Staff John Podesta, and even Senator Barack Obama -- an impressive feat given that Pickens is an ardent Republican.

And he's not out money yet. Apparently he just gave $63 million to Oklahoma State to pay for a football stadium.

With deregulation, globalization, and the emergence of junk bond financing, the 1980s turned into the era of dealmaking. It seemed like no company was immune from hostile takeovers. And, one of the key players in this era was George Keller, who died this week. He was 84 years old.

Of course, his marquee deal happened in 1984, when he was the chairman of Standard Oil Co. of California. At the time, rival Gulf Oil was involved in a nasty hostile takeover with T. Boone Pickens (who had the support of Mike Milken's junk bonds). Gulf thought such a deal would be harmful for the long-term and result in massive layoffs. So, why not find a white knight?

Enter Keller.

Basically, he saw an opportunity to boost Socal's reserves significantly. What's more, the price tag looked fairly good (when crunching the numbers): $13.3 billion. The end result was a company called Chevron (NYSE: CVX).

Yes, it was considered a staggering deal. But it was forward-looking. Since then the oil industry has undergone tremendous consolidation -- and the Gulf deal became a model on how to do it.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

The large hedge fund run by Texas energy king T. Boone Pickens has lost $1 billion this year. He bet that oil would go up. Instead, it went down. That makes his push for wind power and the use of natural gas to run cars look a little silly.

According to The Wall Street Journal," the downturn in energy has blindsided the industry veteran, leaving one of his hedge funds that focuses on energy stocks down almost 30% through August." Pickens says that oil will move back up unless the global economy goes into a very deep recession.

The loss make Pickens look like a fool. He has been lobbying both in Congress and in public that high oil prices are killing the U.S. economy. The U.S., he says, needs to move its energy consumption to natural gas and wind energy. His big push is to cut America's dependence on foreign oil.

His plan relies on converting the auto industry's manufacturing process to one that builds cars that use natural gas. The industry is moving toward electric power. He also wants to set up windmill farms all over the U.S. How these will connect into the current electricity power grid still has to be worked out. In other words, it may not work at all.

If oil prices keep going down, oil may still be the least expensive way to power cars and industry. The huge cost of turning the nation's infrastructure to operating on other energy sources is simply too great. And Pickens is losing his credibility as an energy expert if he can't even forecast the price of crude.

Douglas A. McIntyre is an editor at 247wallst.com.

"We've looked at several ways to play anticipated growth in wind energy; we've also considered titanium makers for that industry's ties to the production of lightweight, modern aircraft," notes Bill Martin.

In his BullMarket.com, he explains, "While the two trends might not appear to have much in common at first glance, Hexcel Corp. (NYSE: HXL) offers a way to play both the aircraft and wind markets.

"The connection is the lightweight, composite materials Hexcel makes that are used by producers in both sectors. Hexcel develops and manufactures advanced structural materials.

"It is the largest U.S. producer of carbon fiber; the world's largest weaver of reinforcement fabrics; and the number-one producer of composite materials.

"Its product was initially developed for the aerospace industry, but is now used in a wide range of applications -- from golf clubs to satellite arrays, and from the rotor blades of wind turbines to life-saving monocoques for Formula 1 race cars.

"It's been a rollercoaster ride for Hexcel's stock in the past 12 months. The shares hit their one-year peak of $27.19 in December 2007; by January 22nd they had plummeted to $17.. The shares rebounded through May, only to fade again. Year to date, HXL is off about 15%.

T. Boone Pickens does not care if the price of oil is falling. His opinion is that most of the drop is over and that his plan for wind energy is still viable and necessary for future U.S. independence from crude imports.

Pickens could not be described as faint-hearted. Rumors are that his $7 billion BP Capital hedge fund took a 35% haircut in July by betting the wrong way on oil and gas. It is a paper loss, but must sting nonetheless.

Some argue that Pickens is old and monumentally rich so gambles on wind and oil don't mean much for his own fortune. That could indicate that his conviction about wind-powered energy is not based on greed. Since he has spent his life aggressively accumulating wealth, that is not likely.

What is likely is that he thinks oil prices may stay very high and that his alternative energy will do remarkably well because it is infinitely renewable. If so, it is too bad his hedge fund cannot invest a few billions into wind technology. He can't afford another 35% loss. At some point his convictions may put him in the poor house. At least as it would be viewed by a billionaire.

Douglas A. McIntyre is an editor at 247wallst.com

Billionaire oilman T. Boone Pickens has launched a new campaign to substitute at least a portion of the U.S. imported oil with domestic natural gas.

Pickens would like renewable energy sources, wind power chief among them, to run electric power generation plants currently run by natural gas/coal, and use that natural gas to fuel natural gas vehicles.

Economist Glen Langan told BloggingStocks Thursday the PickensPlan is commendable for a number of reasons (it would lower the trade deficit, create domestic jobs, and decrease greenhouse gas emissions), but investors and readers should not view it as a panacea for the nation's transportation energy bill. "It could be a part of the solution, but it won't address the entire imported oil problem," Langan said.

Another oil saver: better engines

What's another key to reducing both imported oil and U.S.-produced oil consumption? Something that the U.S. auto sector has under-emphasized for more than a decade: technology-driven increases in car/vehicle efficiency, Langan said.

Langan said vehicle weight reduction, transmission/drive train improvements, enhanced aerodynamics, and the biggest factor -- increased engine efficiency -- "have the potential to reduce oil imports by almost as much as the Pickens Plan, and the changes won't take 10 years to see the results."

Further, many of the mpg-enchancing technologies already exist, Langan notes; he suggested an additional federal tax credit for automakers to help them incorporate the changes sooner.

"The fleet [all vehicles driven in the U.S.] should average 25-27 miles per gallon right now. Currently we're at about 20 miles per gallon. With appropriate federal tax credits we could be at 30-32 miles per gallon in five or seven years," Langan said.

The advance praise on the back of Good Guys & Bad Guys: Behind the Scenes with the Saints and Scoundrels of American Business (and Everything in Between) includes this line from Jim Cramer: "Joe Nocera's the best business writer alive."

Since this book is a collection of Nocera's best work spanning the past 25 years, this is definitely one you'll want to pick up. It includes lengthy profiles of T. Boone Pickens and Steve Jobs (both more than 20 years old), the latter of which should be read by anyone who is considering an investment in Apple (NASDAQ: AAPL).

Nocera has a unique ability to put together telling profiles of some of America's most important and controversial -- like Henry Blodget and Patrick Byrne -- business minds that provide real insight without disintegrating into pseudo-psychoanalytical babble.

It would be nice to see Nocera put together a full-length book of original material but this is a good start -- if you like his New York Times columns, this is worth picking up.

When Yahoo (NASDAQ: YHOO) spurned Microsoft (NASDAQ: MSFT)'s offer to acquire the company last month, many shareholders were outraged. Carl Icahn has acquired a stake in the company and he's rattling the proxy fight saber. Meanwhile, Yahoo has been sued by a group of shareholders alleging that the company and its officers and directors breached their fiduciary duty in failing to negotiate in good faith with Microsoft.

Court documents unsealed in Delaware Chancery Court appear to be quite damaging to Yahoo's management. The papers show that Yahoo rebuffed a bid of $40 per share from Microsoft in January of 2007. Bloomberg quotes one of the company's more quotable shareholders, T. Boone Pickens: "Whoever's suing the Yahoo management and board of directors, if they had a $40 offer and didn't take it, they're going to want to cut their throats for being that stupid. Anybody who sued them has got a good lawsuit, I'd say. I'd hate to be on that board of directors right now.''

The shareholder lawsuit alleges that the company's CEO, Jerry Yang used his power "to delay, to refuse to negotiate in good faith and to erect roadblocks."

The complaint alleges that Yang ignored the counsel of compensation consultants in structuring change of control terms for employees, in a deliberate effort to make an acquisition difficult.

If all of this is true, Yang has got to go as Yahoo CEO. Even if it isn't true, the company's performance in recent years is pretty compelling evidence that change is needed. He is probably the number one CEO on the hot seat right now

Yesterday was a tough day in the markets, with the Dow falling 199 points. But, if you follow some of the legends of finance – such as Carl Icahn, T. Boone Pickens and The Blackstone Group's (NYSE: BX) Steven Schwarzman – you will notice that they are getting aggressive.

Keep in mind that these guys have been through multiple market cycles. And, if history is any worthy benchmark, it's during times of instability where the big money is made.

Pickens is focusing on the energy industry. He sees major demand/supply imbalances and is buying various stocks. He is also interested in natural gas and alternative fuels.

As for Icahn, he's doing what he does best – shareholder activism. He senses when companies are vulnerable and seems to relish an attack on corporate managements and boards. Of course, he's gearing up for a fight with Yahoo! (Nasdaq: YHOO). Interestingly enough, he persuaded Pickens to buy 10 million shares.

And, with Schwarzman, he's buying up the bank debt of companies that went private. Because Blackstone sees many deals, it has an extensive database of opportunities.

In other words, the legends of finance are confident in the long-term. They are making some big bets -- based on lots of experience and due diligence -- and not listening to the short-term noise. All in all, these are some valuable lessons for investors.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

MAJOR PAPERS:

• Barnes & Noble Inc (NYSE: BKS) is considering a bid for rival bookseller Borders Group Inc (NYSE: BGP), the Wall Street Journal reported, a move which would allow Barnes & Noble to improve profits and reduce costs. Antitrust issues could prevent a deal.
• The Wall Street Journal also reported that Carl Icahn's effort to remove Yahoo! Inc's (NASDAQ: YHOO) board has picked up new supporters, including T. Boone Pickens, who acquired a 0.75% stake. Some Yahoo shareholders believe it is still too early to predict whether Icahn will be able to carry July 3's shareholder vote.
• A Financial Times investigation discovered that Moody's Corporation (NYSE: MCO) incorrectly awarded top ratings to billions of dollars to debt products due to an error in its computer models. Moody's said it is in the process of "conducting a thorough review" of the rating of the constant proportion debt obligations, which should have been up to four notches lower.

OTHER PAPERS:

• According to the people briefed on the matter, the New York Times reported that the buyout of Penn National Gaming Inc (NASDAQ: PENN) by Fortress Investment Group (FIG) and Centerbridge Parters may involve revised terms. The sources said the negotiations may "delay or even imperil" the deal.

Oil rocketed through $129 early Tuesday after billionaire oilman T. Boone Pickens said oil may hit $150 per barrel in 2008 due to falling oil supplies, and that speculators have nothing to do with record oil prices, CNBC reported Tuesday.

Pickens, founder and chairman of BP Capital LLC, said that global oil supply is not keeping up with demand. His view is in stark contrast to OPEC's. The cartel has repeatedly blamed speculators, the falling dollar and geopolitical tensions for oil's astounding increase and record-high price. Oil has risen about 100% in 12 months and is up 486% since 2002.

Oil rose $2.34 to $129.31 per barrel -- an all-time record -- in early Tuesday trading before easing slightly to $128.82.

Jim Dietz, independent energy trader, told BloggingStocks Tuesday T. Boone Pickens's perspective on oil wasn't the only factor in oil's rise to $129, but added that it doesn't take much to get oil moving in its recent, vertical direction.

USA Today reports that oil billionaire T. Boone Pickens is placing a $2 billion bet on wind power. Pickens' Mesa Power plans to build the Pampa Wind Project in the Texas Panhandle. It will eventually cover 400,000 acres and generate enough power for more than 1.3 million homes -- making it the largest wind farm in the world.

And Pickens is helping General Electric Company (NYSE: GE) in the bargain. That's because he's buying GE turbine technology. GE is expected to deliver 667, 1.5-megawatt wind turbines in 2010 and 2011. Jeffrey Immelt, GE Chairman and CEO said, "As America's demand for energy escalates, it is clear that wind can and will play a bigger part in meeting that need. We're excited to partner with an energy visionary like T. Boone Pickens to bring our wind technology to the marketplace."

With oil hitting $127 a barrel, I hope this project is the first of many. It will take many different sources of alternative energy to reduce U.S. demand for black gold. Wind power is certainly a good alternative. And if Pickens and GE get richer in the process, that's fine by me.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He owns GE shares.

The saga of oil in the initial decade of the globalization era continues.

Billionaire energy investor and oil guru T. Boone Pickens Thursday said he has reversed his short position and is now buying oil and he expects the world's most important commodity to hit $125 per barrel, Bloomberg News reported.

``The position is long, not short,'' Pickens told Bloomberg News. ``I covered the short position, it was a mistake on my part. We missed.''

Surging economic growth in emerging markets in Asia and Latin America, along with steady demand in developed markets has increased demand for oil during the last 4 years, and strained oil producers' capabilities to meet that rising demand. Oil is up 82% in the last 12 months and is up an astounding 350% since late 2002. Oil closed Thursday down 7 cents to $114.86 per barrel after hitting a record-high $115.54 earlier in the session.

There are many that fear the bear hasn't died. Maybe he's hibernating. But if the bear isn't gone, he's at least lost some teeth. In the last hour of trading today, the DJIA was up more than 900 points from its intraday lows seen just last Monday. Despite weaker home prices trends not seen for 20 years and despite an absolutely dismal ugly Consumer Confidence report, the market managed to do well today despite mixed index averages at the closing bell. There was not a single earnings report that can be used for "the focus" that turned the whole market. It looks like there was actually real buying interest coupled by short covering. Here are the unofficial closing bell index averages for today:

• DJIA 12,532.60 (-16.04; -0.13%)
• S&P500 1,352.99 (+3.11; +0.23%)
• NASDAQ 2,341.05 (+14.30; +0.61%)
• 10YR-TBond 3.492% (-0.03)

Monsanto (NYSE: MON) rose almost 10% to $114.54 after the agriculture giant raised guidance for both Q2 and for fiscal 2008 based on strong seed sales and all other markets firing on all cylinders.