Juggling Dynamite

The sun produces enough energy in one hour to power the world for a year. Let that settle in for a moment.

The race to harness and store the sun is the race to free, clean energy for generations to come. Imagine how much cash flow globally will be freed up for other needs and productive investment.   Yes we can.

“Solar energy could be the top source of electricity by 2050, aided by plummeting costs of the equipment to generate it, a report from the International Energy Agency (IEA), the West’s energy watchdog, said on Monday.

IEA Reports said solar photovoltaic (PV) systems could generate up to 16% of the world’s electricity by 2050, while solar thermal electricity (STE) – from “concentrating” solar power plants – could provide a further 11%.”

See: Solar power could be world’s top electricity source

It is impossible for regulators or anyone else to control mammoth financial conglomerates that are designed to maximize risk-taking without personal consequences to the actors involved. The answer is not more regulation, but smaller institutions that separate deposit taking utilities from investment banking/speculating. See: UBS Restructuring shows need for banking’s simpler future.

Breaking up the conglomerates and demanding they build up self-insuring capital buffers within their risk-seeking arms is critical and will increase their cost of capital, reduce free cash flow and lower earnings for shareholders and executives. And that is as it should be.

Andrew Huszar, senior fellow at Rutgers Business School, discusses revelations of the Federal Reserve Bank of New York’s handling of Goldman Sachs in secret recordings and how the role of regulation has changed in the banking industry since the financial crisis. Here is a direct video link.

“Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio) are both calling for Congress to investigate the New York Federal Reserve Bank after recently released secret recordings show the central bank allegedly going light on firms it was supposed to regulate.

Warren and Brown, both members of the Senate Banking Committee, called for an investigation of the New York Fed after Carmen Segarra, a former examiner at the bank, released secretly recorded tapes that she claims show her superiors telling her to go easy on private banks. Segarra says that she was fired from her job in 2012 for refusing to overlook Goldman’s lack of a conflict of interest policy and other questionable practices that should have brought tougher regulatory scrutiny.

After Segarra made the tapes public in a joint report with ProPublica and This American Life on Friday, Warren was quick to call on Congress to take action.” See: Secret tapes of Fed meetings

In case you missed it, here is a link to the Segarra interview and tape sampling from last week.