Fears are mounting of a bubble in funds investing in renewable energy stocks as asset management companies rush to launch funds to tap into the environmental zeitgeist.
In the first seven months of 2007, 15.2 per cent of net inflows into equity funds across Europe, some €4.6bn (£3.2bn, $6.5bn), went into ecological or environmental funds specialising in areas such as alternative energy, according to data from Lipper Feri, up sharply from 2.6 per cent of flows in 2006 and 0.6 per cent in 2005.
Comments on this article courtesy of PM.
Clearly the markets have sensed that the falsehoods the wind industry are constantly banging on about are gaining traction with the general public, and smell a profit. The quip about growth being "underpinned by regulation" speaks volumes.
The trouble with such "City Institutions" is that their thirst for profit seems to cloud any common sense they may have once had. Believe me I work in this industry and the players care not a jot about anything except their own profits and bonuses.
The current "credit crunch" was caused by this kind of pumping the regulations and investors. Banks were willing to sidestep traditional capital adequacy ratios, whereby they did not lend more than their deposits. Banks then had a great idea, get the liabilities "off balance sheet". That meant they sold them on, "sliced and diced" to other banks (who by all accounts were doing the same) or used "conduits" - separate companies owned by the bank but that did not appear in their accounts.
In effect, a bank swept it's dodgy loans under the carpet of another bank, whilst simultaneously allowing other banks to sweep theirs under it's carpet.
In this way the risk was "dispersed" and lessened. Except the stupid idiots have no idea what the total liabilities amount to and where they now lie, so they cannot trust each other anymore to lend. This is how we got into the credit crunch.
It is the British Tax payer, thanks to the generosity of Gordon Brown, who will be left picking up the tab and clearing up the mess.
They will do the same with the "green funds" bubble too, and it will not be the "brightest and best" who lose – no, they will get their huge profits and bonuses. In an equity bubble, it is likely our pensions that get hit.
So what can we do to stop the investment bankers have a feeding frenzy around renewables and thereby destroy our countryside and our retirement funds? Here are a few ideas:-
1. Ensure your pension provider is aware you do not want any of your savings invested in wind power and other false "green initiatives" such as carbon trading schemes.
2. Lobby your MP, MEP, ministers and your local councils to remove the disgusting subsidies.
3. Buy stocks in the energy companies, and ensure you have voting rights by holding your shares yourself. Go to the AGMs and make your point. It is a strange truth, that because of CREST, many institutional investors do not have voting rights. Many activist fund managers do this kind of thing and can exercise influence control with only a minority holding.
4. Change energy suppliers away from those who have Wind Plant operations.
The suggestion of an activist fund approach is a good one and FirstMistake believes we should start a private equity anti-wind activist fund.
Check out www.firstmisatake. org for an up and coming article on this.
PM
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