Archive for August, 2010

William (Bill) Black – Wall Street’s “Perverse Incentive Structures” Guarantee Another Crisis

Saturday, August 14th, 2010

There’s a lot of stuff going on right now in the economy, I’ll post some more soon, but for now let’s take a listen to one of the few coherent voices out there, William Black.

The Obama Administration says the recently signed Dodd-Frank Law, the biggest bank overhaul in decades, will ensure against another financial crisis.  William Black Associate Professor of Economics and Law at the University of Missouri-Kansas City couldn’t disagree more.

“They haven’t dealt with any of the fundamental perverse incentive structures that cause these recurrent, intensifying crises,” he tells Tech Ticker. In other words, the incentive to take excessive short-term risk in exchange for a multi-million dollar bonus is still very much intact. “Your pay should be based on long term performance instead of short term results which are easy to gimmick through accounting,” he says. 

Excessive pay on Wall Street, which Black says is the biggest culprit of the financial crisis, is just one reason we’re likely to witness another crisis in the not so distant future. Financial regulation reform also fails to deal with the “professional compensation” structure, says Black, a former federal regulator during the Savings & Loan Scandal. By that, he means the continued reliance on lawyers, appraisers, rating agencies and auditors ensures these professionals will remain the “most valuable allies to the frauds.”

We’re also no safer with the Dodd-Frank law than without it simply because, as a whole, the financial system doesn’t believe in regulation, Black observes. “It’s the ideology [which says] ‘you can never regulate effectively’, so why bother to try.” Finally, Black says, the law fails to end ‘Too Big to Fail’. As long as this policy exists we’re guaranteed to face more bailouts. “Why would we allow these systemically dangerous institutions to continue?,” he wonders.
Wall Street’s “Perverse Incentive Structures” Guarantee Another Crisis, Says Bill Black
by Peter Gorenstein – Yahoo

Uranium – the missing ingredient for a global switch to nuclear energy + thorium information

Monday, August 9th, 2010

I’m just going to quote this in-depth. Even though the person being interviewed is promoting his own interests, nothing he is saying as far as i can tell is inaccurate, and I’ve read the same thing elsewhere, repeatedly.

See:

So without further ado, here’s part of an interview with Bill Powers (please note that this appears to be an automatically generated transcription, ie, it’s not very accurate):

Interviewer: A whole lot of newsletters cover oil and gas, but you picked uranium, which hardly anyone was covering until recently?

Bill Powers: I feel the uranium market right now could be the world’s most unbalanced commodity market. Inside a sense, the planet, by means of the nuclear power industry, consumes approximately 172 million pounds of uranium per year, as well as the planet only produces about 92 million pounds of uranium per year. The supply deficit is produced up through above-ground inventories, which are becoming worked down pretty quickly. Individuals numbers were supplied by Uranium Info Center. A great deal of my information arrives through the U.S. Department of Energy (DOE) or the Nuclear Regulatory Commission. For example, I discovered from them that the U.S. made, through the 1980s, about 43.seven million pounds of uranium. And by 2002, the U.S. only created about 2.34 million pounds of uranium.

Interviewer: Exactly where is uranium being created in the United States?

Bill Powers: Wyoming. There’s also a uranium facility in Nebraska. I think there are two in-situ leach plants in Wyoming and an additional 1 in Nebraska. There are a couple of phosphate farmers in Florida who generate uranium. I believe there can be a facility in Texas that also produces uranium. For that most part, the uranium business in New Mexico has just about been wiped out. The extremely low rates that we’ve seen, for about twenty years, have pretty a lot wiped out the entire U.S. uranium market. To go from over 43 million pounds to less than 2.five million pounds, it has truly only allowed the most productive, highest margin and most efficient mines in the nation to continue operating in that environment.
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