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On Monday, 30 October 2017 21:04:00 GMT Rich Freeman wrote: |
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> On Mon, Oct 30, 2017 at 4:50 PM, Dale <rdalek1967@×××××.com> wrote: |
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> > have we profited on today'. However, when a company is public, stocks |
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> > and such, then it is about what have we made today with no one caring |
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> > about years from now. After all, the people owning the stocks may not |
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> > even own them next week. |
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> |
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> Nor should they be concerned with the long-term. |
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|
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Not all shareholders flip their stock in milliseconds to front-end retail |
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investors in market movements. There are also few(er) long term investors, |
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but they have been crowded out by big banks and hedge fund algo desks. |
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> This should be the |
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> role of the regulator. If the regulator wants spare capacity, then |
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> they should take bids for companies to have spare capacity available |
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> and they get paid to just sit on their excess capacity. If the |
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> regulator wants more redundancy in the transmission network then they |
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> should set specifications for what is desired and take bids from those |
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> able to build it out. If the regulator wants everything to be |
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> replaced within a certified lifetime based on testing then they should |
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> specify this, and take bids from those willing to maintain the grid to |
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> this standard. |
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The problem is the regulator is typically a toothless entity, a paper tiger, |
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put in place to apply soft touch intervention by issuing corrective notices, |
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when step-in required to curtail the abusive behaviour of market participants |
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is long overdue. |
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The regulator does not hold the budget, central government departments do and |
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the regulator cannot (or will not) control abnormal profits privatised |
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utilities are making year after year. However, the regulator will engage |
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enthusiastically in the a theatre of regular reviews of market conditions, in |
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an attempt to convince consumers and tax payers the most gratuitous abuse of |
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power is kept in check. |
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> The problem is that the general public does not see the value in |
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> infrastructure, so they don't think about it when they're voting. |
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> Instead they vote based on whatever fringe issues the politicians want |
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> them to focus on instead. |
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> |
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> If a company is going to get paid the same whether they build for |
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> extra reliability or not, they're going to opt not to. Not only does |
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> this give them more profits, but it makes their bids more competitive |
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> vs some other company that would just undercut them for |
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> "over-providing." |
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Even worse, on the usual design-build-operate contracts they are often |
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motivated to undercut reliability for a more competitive price, hoping to bail |
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out of the operate part just as the infrastructure is about to fall apart. |
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> Lax regulation just punishes conscientious market participants. |
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On tenders evaluated on a quality:price ratio basis this does not happen as |
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often, although it is hard to change entrenched behaviours among competitors. |
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-- |
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Regards, |
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Mick |