With tongue at least partly in cheek, I found it all too easy to come up with the top 10 reasons you know that an investment bubble is inflating around ethanol production. When the VCs who funded the dotcom bubble and telecom bubble hook up with the bankers who funded the independent power generation bubble, watch out.

10. Small cap companies start changing their names to add the word “ethanol” (Mems USA is becoming Convergence Ethanol).

9. Even investment bankers promoting ethanol admit the barriers to entry for building new ethanol plants are “scarily low.”

8. Ethanol company hires guy who helped build too many power plants to help build too many ethanol plants.

7. Hedge funds start adding the word “ethanol” to their name.

6. Dateline NBC says ethanol is going to “put the fossil in fossil fuels.”

5. 60 Minutes says people in Iowa are calling corn “green gold.”

4. Rick Wagoner says GM has been working on ethanol for “a long, long time.”

3. After one company does a hot IPO, two more companies quickly file to go public.

2. Profit margins on ethanol are at an all-time high.

1. George Bush’s lips are moving.

All we need now is a Time magazine cover story and a Paul Allen investment and it's confirmed. For a more serious review of the issue, check out the story that BW colleague Chris Palmeri and I wrote in this week's magazine.

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