finance-how-to-beat-the-auto-dealers

Finance - How To Beat The Auto Dealers

Writen by Michael Russell

Finance. Pretty broad term. If you look up the word finance in the dictionary you will find the following definitions.

Noun

1. The science of the management of money and other assets. 2. The management of money, banking, investments, and credit. 3. finances Monetary resources; funds, especially those of a government or corporate body. 4. The supplying of funds or capital.

Verb

1. To provide or raise the funds or capital for: financed a new car. 2. To supply funds to: financing a daughter through law school. 3. To furnish credit to.

Certainly more than enough material to cover. An associate of mine in the early years of his career after graduating college with a finance degree spent a good number of years in this field. He certainly has a wealth of knowledge to share on a variety of financial topics. So in this first of a 3 part series he is going to enlighten you on the verb side of this equation. More specifically definition number 1. To provide or raise the funds or capital for. Like financing that brand new car of yours. He offers this observation and advice.

Financing anything can be a costly proposition especially if you don’t know what you’re doing. This is especially prevalent in one area especially, financing a new car.

Rather than bore you with a lot of information that you don’t need I am going to provide you with what information you DO need so that when going to finance that brand new luxury sedan it doesn’t end up costing you a fortune.

1. The first thing you have to do is determine your financial situation. How much can you afford to pay each month? Financing a car is a long term proposition. Most new car loans run for about 60 months, or 5 years. That’s 5 years of your life that you need to be prepared to meet a financial obligation or your car ends up repossessed So don’t finance a payment that is more than what you can afford each month.

2. Decide what car you want and what you’d be willing to accept. Maybe you want that new Lexus but at $1200 a month financing it’s just way beyond your means. Maybe that $500 a month Chrysler is more in your pocket book range. Sometimes we have to settle for what we can afford. Remember, a car is a means of transportation. You spend less time in your car than in your place of employment or your home. Maybe you just want to get something that will get you to where you want to go.

3. Do your homework. There are a boat load of car dealerships out there. Don’t just settle for the first one you see. Shop around. Compare prices of competing dealers. Many times if you bring an ad in from a dealer that is offering the car you want for less money you can get an even better deal from the second dealership. Don’t worry. Everybody does it.

4. Don’t settle for the rate the dealer gives you when financing your car. Ask him what the buy rate is from the finance company. If you think that rate is too high tell him you want him to try another finance company. If you’re still not happy with the rate then try your local bank. Many times you can get a better rate just by looking around.

5. Don’t let the dealer load you up with things you don’t need like a tow package, undercoating, rust proofing and a lot of other junk. This will just add to the price of the car and the amount being financed.

6. Put down as much as you can afford. This will lower the amount financed and therefore lower your monthly payments.

If you follow these simple 6 steps you will find that you end up leaving the dealership with a monthly payment you can live with.

love-marriage-and-money

Love, Marriage and Money

Writen by Johnette Duff

The f-word. Finances. Combining love and money may be the biggest stumbling block on the path of true love, creating more rifts in relationships than in-laws, drug and alcohol addiction, or infidelity.

Financial power struggles challenge even the most solid partnership. Unfortunately, money too often equates to control in a relationship. The delicate balance of power between you is dependent on the successful combination of love and money.

In the majority of relationships today, both members contribute financial resources. Despite the strides women have made toward financial equality on the job, though, men still have greater earning power. In general, with more disposable income, men invest more money and take greater risks than women. Women as a whole are more conservative in their investments because it takes them longer to earn the money. Money attitudes are also influenced by age, family upbringing, religion, and each person’s own unique financial trials and errors.

Everyone has opened a bank account, paid the rent or mortgage, kept the telephone and electricity turned on. When you make the decision to share your life with someone, though, such mundane issues suddenly become complicated.

Do you keep separate bank accounts or do you put all the money in one account? How do you split monthly expenses? Do you each pay a portion or do you pay bills out of a joint account? Should you be able to sign on your partner’s bank account? Did one of you bring assets to the relationship that the other uses, such as a car or a home, for which expenses should be shared?

Financial advice for couples over fifty varies significantly depending on age, economic status and dependents. Every situation is different, but the following is general advice for everyone.

Many modern couples keep their finances separate, while others opt to pool all their funds. Making the decision on the day-to-day handling of what was formerly “his” and “her” money can be a tough one.

There are benefits to keeping separate property funds separate and maintaining certain assets in one name only, which we’ll explain in more detail in the next chapter. Keeping other monies separate may create logistical problems, though, along with a diminished sense of common goals for the future. Combining your funds also gives a couple greater borrowing and investment power.

Determining a financial plan that works might take months; many couples struggle for years before reaching a balance. Defining and discussing your money styles is the first step, setting goals is the second.

Review your financial picture. Are you both satisfied with your knowledge and control of “your” money and “our” money? Are you both knowledgeable about banking, insurance, investments, credit cards?

The routine business of a new life together should include the following:

• Reevaluation of life, health, auto and other insurance coverage

• A change of beneficiary on insurance policies and company pension plans

• Notification to social security of your marriage to ensure eligibility for your spouse’s benefits and change of W-4 withholding

• An assessment of the impact of remarriage on alimony or pension/retirement benefits from a prior marriage

• A consultation with an accountant to learn the impact your marital status will have on your federal or state income tax obligations

• In a remarriage, be aware that the income of a new spouse may impact eligibility for financial aid of college-age children from a prior marriage.

You may need to consult your banker, your employer, your insurance agent, your accountant, your attorney or other professionals to accomplish these tasks.

Your goal in tying the fiscal knot is to protect your spousal rights and save money. Begin your research before the wedding and make sure you follow through. Loveandthelaw.com should be your first stop - it’s an easy and inexpensive way to stay informed.

bankruptcy-bill

Bankruptcy Bill

Writen by Stuart Simpson

The Senate is trying to overhaul the bankruptcy laws. Credit card companies and retailers have been pushing for reform since 1997. Hopefully, the new law will come into effect by mid-March.

What have they been battling over?

They rejected an amendment that would allow older people to get a special “homestead exemption” that would allow them to keep their homes if they file bankruptcy. Currently, this is determined by each state. Six states currently have unlimited homestead exemptions. This means that rich people can file bankruptcy and keep their big houses. Doesn’t sound fair.

They also wanted to have credit card statements show how long it would take to pay off the debt by making only the minimum payment and what the interest charges would be.

One proposal would allow people to keep at least $150,000 equity in their home. The second proposal dealt with medical bills. If the medical bills exceeded 25% of their income, then they were exempted from the new test.

This new test measure income and assets to determine if debts can be discharged. Bankruptcy judges currently have to decide if debts can be discharged.

Some people say this would remove a safety net for people who lost their jobs or have insurmountable medical bills.

business-checks

Business Checks

Writen by Marcus Peterson

Business checks are generally beneficial to people issuing more than 1000 checks a year. A business check is designed specifically for the needs of businesses. Normally when a business account is opened with a bank, a business checkbook with 100 checks is issued to the customer. An automated ordering system ensures that new check books are sent to the customer well before the old ones run out. Business check is basically a tool to counter check fraud. Check frauds are growing challenges facing business and financial institutions today, something the banks are increasingly getting aware about. Bank checks allow business owners and financial controllers to carefully reduce the potential for check fraud.

A business check actually enables a customer to spend more time managing the business with the convenience of a check book for his or her daily banking requirements. The main features include arranging for the direct credit of regular payments to a customer’s account. Also regular debits such as loan repayments can be made automatically by such a check. Business checks have therefore a critical importance to every modern business. They come with all security features also.

Business checks are very always good in quality and are recognized by all banks. Such checks ideally meet the American Banking Association standards for security. Business checks are available in many popular styles and designs. We have three-on-a-page manual checks and executive desktop checks or laser checks as good examples of business checks. Free 50-leaf “butt style” check books and duplicate deposit books are also considered examples of business checks.

presenting-financial-figures

Presenting Financial Figures

Writen by Michael Russell

Numbers are essential tools used in the decision-making process in a company. Effective management entails the proper use of financial figures. But a lot of people have a fear of numbers stemming from unpleasant experiences with them during their school years. In order to understand and use numbers fear must be overcome first. Understanding will then follow; you will know what numbers can tell and what they can not tell. You will know when it is appropriate to use them and when it is not. You will come to know their limitations. Only at this time will figures become a useful tool for making decisions and enhancing the quality of decisions.

Decision-making in a company usually involves presenting financial figures to several managers, not all of whom have backgrounds in finance. The objectives of presenting financial figures to them are to educate and inform them of the financial performance of the company and convince them of future trends that must be considered in order to give direction to the company. This means that the presentation must be clear and comprehensible to the audience. It is not enough to print out financial statements, hand them out and discuss them line by line. This will not accomplish understanding and clarity. Doing away almost completely with figures and financial terms and steering away from technical discussions is tempting because it may seem easier and simpler, but neither will it achieve the goals of educating, informing and convincing the audience.

A better approach to presenting financial figures is to try to level the financial understanding of the attendees. He should put himself in their shoes and think of ways to incorporate financial terms and figures in his presentation in an easily understandable manner, explaining along the way the terms that can not be replaced with layman’s terms.

To prepare for the challenge of presenting financial figures, the presenter must first select the most critical numbers, making sure that all assumptions or basis for each are explained. Decide also which financial terms and concepts are needed for the presentation and how these terms can be explained in layman’s terms.

It is a good idea to develop an outline of your presentation showing the objectives, critical financial concepts or principles and critical figures. This will serve as a guide for the flow of your presentation.

The presentation should start with an explanation of the objectives. Tell the audience what you wish to accomplish and give them a summary of the discussion points. Establish clearly the importance of understanding the critical concepts that you are including in your presentation. Tell the audience why they need to understand the concepts. To explain the concepts, you can relate them to some familiar and ordinary situations. Analogies can be used as a tool to accomplish this. To maintain your audience’s attention throughout the presentation, keep referring back to your familiar and ordinary situations that you used as examples so that your audience can keep up with the story that you are trying to tell. Take short breaks to let the audience absorb the ideas and figures and encourage them to ask questions.

what-are-structured-settlements

What Are Structured Settlements?

Writen by Mark Lambie

When someone has won a structured settlement that has arisen from a lawsuit, they expect they will have to wait a year or more just to receive the money, this is not true. There are many companies available to you that exist to purchase your settlement from you. These types of companies will pay you cash in exchange for the structured settlement or any portions of your periodic settlement that is remaining. What does this mean for you? Well this essentially means that you will receive a lump sum payment from the company who will purchase your structured settlement and have the ability to use it for anything they desire rather it be paying for college, purchasing a new home, paying off debts, investing into the future, anything you desire.

Generally, a structured settlement is the result of a lawsuit, this is an agreement made between you and the responsible party that you will accept specified payments from them in a specified period of time, as a result you will release them of any liability named in your lawsuit. There are a variety of payment methods you can choose from such as annual installments that come over several years or in payouts that come every few years. Other types of structured settlements include winnings from situations where the awards are of a substantial amount such as contests or lotteries.

Structured settlements are tax-free and used to provide financial security over the long term; however, many people choose to sell their settlement in order to gain the money right away. You have many options when it comes to selling your settlement, you can sell as little or as much as you want and fits your needs and wants. This is an option that many people take advantage of when they have receive a structured settlement of any type. They often like the advantage of having all the monies right away instead of having to wait years and years, which could hinder any plans of purchasing large ticket items such a home. Sometimes the payments will not be large enough to make any sort of significant investment without the need of saving for several years. This is where selling your structured settlement to a reputable company that has a high track record and solid integrity will do some good.

will-cameco-supply-the-uranium-for-the-proposed-enrichment-facility-in-new-mexico

Will Cameco Supply the Uranium for the Proposed Enrichment Facility in New Mexico?

Writen by James Finch

Guess what? Our recent investigation shows the uranium to be enriched in the LES/Urenco proposed enrichment facility in Lea County, New Mexico may come neither from uranium properties in New Mexico nor anywhere else in the United States. Just as New Mexico’s nuclear/uranium mining renaissance was ready to get underway, a deal may have already been cut to enrich uranium mined in a foreign country. Louisiana Energy Services (LES), through the consortium’s general partner Urenco Ltd., may have struck a deal with Canadian-based Cameco Corp. Will this uranium come from Canada or Kazakhstan?

According to New Mexico State Senator Carroll H. Leavell, the uranium ore to be enriched at the facility near Eunice, New Mexico facility would be coming from outside the United States. Senator Leavell told StockInterview, “The uranium ore will be coming out of Saskatchewan.” When we asked if the uranium to be enriched in New Mexico would come from the Athabasca Basin, an area hosting the world’s richest grades of uranium and which is also located in northern Saskatchewan, Senator Leavell claimed he wasn’t sure where the Athabasca Basin was. But he told us that Urenco Ltd informed him the uranium was coming from that western Canadian province.

We can only speculate the uranium producer might be Cameco Corp. On July 22, 2002, Cameco signed a Memorandum of Agreement with LES, along with Urenco Ltd, Westinghouse Electric Company, Fluor Daniel and the affiliates of U.S. utilities: Exelon, Duke and Entergy. In an email response to our inquiry, earlier this week, Netherlands-based Urenco Ltd Communications Coordinator April Wildegose-Mistry informed us, “Cameco Corp was part of the original LES project. They pulled out around March 2003 as they needed to focus on other business issues.”

We have also asked to interview Urenco’s CEO. Perhaps he may clarify this matter for us. One industry insider told us Cameco stated its continued support for the LES initiative after it withdrew as a partner. However, the recent joint venture company, Enrichment Technology Company, formed by Areva and Urenco may open the possibility the uranium could also come from Areva’s uranium interests in Athabasca. AREVA is a Paris-based company offering technological solutions for nuclear power generation, and electricity transmission and distribution.

This development could further irritate at least one New Mexico legislator. State representative John A. Heaton from Carlsbad, New Mexico, and who also sits on New Mexico’s Energy and Natural Resource Committee, was adamant about U.S. independence from foreign energy sources. He told StockInterview, “We need to use the assets we have and not be dependent upon foreign countries. I worry a lot about the dependence we have on other countries.”

In this instance, Heaton might be getting a double-whammy of foreign dependence. Not only is Urenco Ltd a foreign-owned and controlled company (a Dutch/ British/German consortium), but the uranium its New Mexico facility would be enriching could come from at least one foreign source, Canada. Because the uranium ore might be sourced from Cameco, yet another country’s uranium could be supplying the New Mexico enrichment facility: Kazakhstan.

Cameco plans to boost uranium mining in this former Soviet country to a level which might approach its uranium production in the Athabasca Basin. Kazakhstan recently joined the “Putin Alliance” of uranium-producing countries. On June 22nd, Kazakhstan signed a contract worth $1 billion to supply Russia’s Tekhsnabexport to supply Russians with uranium through the year 2020. The Economist Magazine’s Economic Intelligence Unit recently issued a caution on this country.

We asked our uranium industry analyst, David Miller, about this new twist in the LES/Urenco story. Miller is a third-term Wyoming legislator, who is an original member of the Wyoming Energy Commission and a past member of the National Council of State Legislator’s (NCSL) Energy Committee., now serving on a NCSL-related committee. Miller is also president of Strathmore Minerals, a company which is now advancing its properties through the permitting process in New Mexico. Miller told us, “The State of New Mexico may miss out on the hundreds of millions of dollars of tax revenues from potential severance, ad valorem, sales and other taxes the domestic industry would pay the state to mine uranium in New Mexico. Instead, the foreign uranium pays zero taxes to enter the state for enrichment.” In other words, Cameco or another may be getting a free ride on taxes.

Ominously, Miller asks these questions, “The real question for New Mexico is this: What happens to the part of the uranium that does not go onto the fabrication plant? Does it stay in New Mexico? Is it shipped back to Russia, Kazakhstan or Saskatchewan?” This gave us pause for thought. After it leaves New Mexico, how do we know it would be used for civilian energy purposes? Could it be transported elsewhere and be more highly enriched? That’s just speculation.

Miller recommended that New Mexico legislators demand the LES plant be fed uranium mined in New Mexico, not in Canada or Kazakhstan. “If this were to happen,” Miller wrote in an email to us, “thousands of new mining jobs would be created in areas of New Mexico which need the most economic development.” Once the world’s leading uranium producer, New Mexico’s Grants Uranium Belt is again being explored by more than a dozen companies. Some hope to permit and operate new uranium production centers in New Mexico. We trust this latest wrinkle will awaken New Mexico’s legislators and help them protect uranium mining developments in their states. Perhaps their voters, who might be looking for higher paying jobs, would appreciate that.

collecting-overdue-debt-a-course-of-action

Collecting Overdue Debt: A Course of Action

Writen by Jeremy Maddock

If you are a business owner, you will likely encounter overdue debt on a very routine basis. A huge number of customers - both individuals and other businesses - will inevitably forget, not bother, or refuse to pay their bills.

It’s easy enough to deal with the forgetful procrastinators with a couple of firmly worded overdue notices, but for those who still don’t pay, there is a time to turn things over the a debt collection agency.

When it becomes clear that a customer doesn’t intend to pay you of their own free will, turning things over to another party probably isn’t a bad idea. For example, customers that flatly deny owing you money, despite your records, are very difficult to deal with without help.

A customer making repeated, groundless claims and complaints for the sole reason of getting out of a payment, is another tell-tale sign that your business may have a problem on its hands. In cases like this, it is a good idea to send a final warning notice, attempting to create a fair repayment plan. If no action is taken by the other party, it is then time to seek help from professional debt collectors.

Another obvious sign of trouble is when a delinquent debtor changes their address or telephone number without notifying you or providing forwarding information. In cases like this, you should immediately get assistance from an agency that is willing to track down the customer and act upon the debt.

can-refinancing-a-loan-really-save-you-money

Can Refinancing A Loan Really Save You Money

Writen by Joseph Kenny

You have heard that refinancing a loan might be able to save you some money, but do you know how it could? This article will show you how you might be able to benefit by refinancing your mortgage, and showing you how you could end up saving some money - with a better deal.

If you have any thought at all that you wish your payments could be a little lower, then this article is for you. Many mortgages were made at a time when the economy was doing better than it is right now. So you may be one of those people who, because the economy was good, got a variable interest rate on your mortgage. It was good when you got it because it helped you get that house you wanted, but now you may be faced with a higher payment soon - in fact, possibly a much higher payment than you had before. Refinancing may provide you with a real good solution.

Combine Your Debt

If you have more than one form of debt, and are paying a hefty rate of interest on some of it, then refinancing will give you the opportunity to combine the debt, and get a better rate of interest. Combining them all together makes it so much easier to write one check, too.

Reduce Your Term Length

With many mortgages, the term length allows the lender to tack on to the loan a whole lot of extra interest. The longer the term length, the more interest you are paying. By reducing the term length, and combining your loans, you can pay more on the principal quicker, thus reducing the overall amount that you owe.

Get Better Interest Rates

Having more than one type of debt may mean that you have at least one of them with a higher rate of interest. By getting a loan when the interest rates are down, you can definitely save some money. Refinancing your debts, however, is only valuable to you if you can get a lower interest rate than you have now. If one or more of your debts have a lower rate than the one you are getting, keep them separate and enjoy the low rate, but bring down your overall debt interest where possible.

Get Smaller Payments

By refinancing your mortgage, you have opportunity to get a smaller loan, and this could give you smaller payments, too. You will want to make sure, however, that there is not any penalty for paying off the loan quicker than the term length of the loan. Take advantage of the smaller payments, as much as possible, and make larger than the minimum payments each month to be able to get out of debt as soon as possible. If you cannot pay more than you were before, at least pay as close as possible to the same amount - which will enable you to pay it all off sooner.

Get Some Extra Cash

By refinancing, you may also get a little extra money for one or more projects around the house, too. If money is tight, though, you may want to hold the extra projects until the debt is reduced some and you build up some equity in the new loan - if the project can wait.

uxc-president-to-us-utilities-buy-american

UxC President to U.S. Utilities: Buy American

Writen by James Finch

Summary: In the face of Asian competition and possible supply shocks to the uranium market, UxC president Jeff Combs urges U.S. utilities to “support the expansion of production in the United States.” He believes there’s a good chance for $50/pound uranium this year. “Any shock to supply could send prices much, much higher.”

StockInterview: How would you sum up the uranium market right now?

Jeff Combs: There’s a very tight supply/demand situation that exists now for deliveries over the next several years. If you were going out today to buy uranium for 2007, 2008, and 2009, there’s not that much available supply. The supply/demand balance is very tight, and I think that’s going to be reflected in prices continuing to rise for a while as utilities seek to fill demand for those delivery years. Since most contracting in uranium is done on a term basis, you’re always looking out several years. By the time you reach 2009, for example, you’re looking to fill needs in 2012 and beyond. By that time, supply might have responded sufficiently, or even “over-responded.” Of course, whether or not the supply/demand balance is tighter then depends on how nuclear power expansion is progressing at that point and what happens with respect to the HEU deal. But, in the meantime, production will have had more time to react to higher prices, and this could alleviate some of the supply/demand pressures.

StockInterview: How are escalating market-related contracts impacting the uranium price?

Jeff Combs: It’s pretty much a sellers’ market right now. You have escalating floor prices that are maybe not too much lower than the current spot price. If you have ceiling prices, they’ll be much higher than the current price, and those will also escalate. In some cases, you don’t even have ceiling prices. In rare cases, you don’t have either ceiling or floor prices. Most producers are looking to sign market-related contracts and not fix the price even on an escalated basis in the future, although they would want floor protection. To a large extent, the utilities don’t have too much choice in the matter except to wait and hope that the competitive landscape changes in the future. However, in many cases they need to procure uranium now and can’t afford to wait. Thus, they must accept what is being offered.

StockInterview: Do you continue to see a speculative frenzy in the market?

Jeff Combs: There’s still some speculative activity in the market, but I wouldn’t call it so much a frenzy. The importance of this speculative buying has been somewhat over-blown. Total hedge fund/investor volume to date is about 11 million pounds. This buying started towards the end of 2004. The bulk of it was during 2005, and it has continued into this year. It will be much less over the first part of this year versus the first part of 2005; about a half a million pounds so far this year versus 5.5 million pounds through May of 2005. There is probably too much emphasis put on the role of hedge funds or investment funds in the market. If you look at the market, the price - especially the long term contract prices - has been leading the spot price up. The speculators really aren’t involved in that part of the market.

Over the same time the hedge funds/investor funds were buying, you’ve probably had a third of a billion pounds transacted under long-term contracts. If you go forward several years from now, you see a very tight supply/demand situation in the market. If you wanted a pure base-escalated contract, the base price for this might be close to $50 today, a good bit higher than the spot price and about a third or so higher than the long-term price at the beginning of the year.

StockInterview: We’ve been led to believe the HEU deal with Russia will not be renewed. What is your feeling?

Jeff Combs: You need to consider how much things have changed from when the current HEU deal was signed. At that time, the Russian economy was struggling, as was Russia’s nuclear power program. Now Russia’s economy is much more robust, thanks to energy exports. Russia is experiencing a nuclear power renaissance of its own. From this perspective, I think it’s quite unlikely that the HEU deal will be renewed. When I say that, I’m referring to the deal between an agent acting for the Russian Government and an agent acting for the U.S. Government. I don’t think that necessarily means that there will not be any HEU blended down after the current deal is over, but that could be done for internal consumption in Russia or be used as supply for countries where Russia is exporting fuel for Russian-supplied reactors.

StockInterview: The trading volume on the spot uranium market has fallen off after what transpired in 2005.

Jeff Combs: The volume now is certainly less than what it was last year. Volume so far for the year is 6.3 million pounds on the spot market. If this rate were maintained, it would put volume close to 20 million pounds for the year. This would make it more of a typical market in terms of volume from the standpoint of recent history before 2005. Whether or not volume is higher than this depends a lot on the extent to which utilities that are out in the long term market, right now, are able to get offers to cover requirements in 2007, 2008, and 2009. If they’re not successful, they might come back into the spot market. That could boost spot buying somewhat later in the year. Also, some producers have been buying on the spot market. If this buying picks up, it could add to volume as well

StockInterview: Do you believe we’re going to see $50/pound uranium in the near term?

Jeff Combs: Oh yes, I think there’s a good chance that we’ll see $50 per pound uranium this year, more likely in terms of long term contracts. I think the highest prices may be reached within the next couple of years. I think that’s when supply will be the tightest. In our uranium market report, we develop three price scenarios - a base case, a high-price case, and a low-price case. Price spikes or overshoots its long-run equilibrium in all three scenarios. In the high case, which would be the most dramatic spike, I would say it would be somewhere in the $60 - $70 range. Price certainly could be higher than this if the wheels come off the wagon. I think you’re definitely looking at price going into the $50s. It’s not too difficult to see a scenario where price goes into the $60s. And then it would come down from there.

StockInterview: What goes up must come down?

Jeff Combs: I don’t think these higher prices are sustainable in the long term. You also have the situation now where utilities are going out to buy uranium, and they’re not finding what they want over the 2007-2009 period. It might be the case that some of these newer producers, or producers in the process of expanding production, really aren’t in a position to offer the supplies in those years. Ultimately, they will have the supply to offer in maybe 2009 or 2010. Since they’re not offering it right now, price can be pushed up a fair amount, setting up the possibility for a correction in a few years when more of these supplies become available to the market. In the short term, uranium supply and demand are very inelastic. This sets up the potential for an explosive response in price, as witnessed by the recent behavior in price. I have to admit we’ve had to adjust our price projections upwards on more than one occasion.

StockInterview: What would be on your checklist of “shocks to the market” or the “wheels coming off the wagon”?

Jeff Combs: What we’ve pointed out for a while is that you have the vast bulk of supply coming from a few major production centers and blended-down HEU. If you have a problem with any one of those, it can have a large impact on the market. Obviously, we’ve already had problems at Olympic Dam and McArthur River, and now Cigar Lake, even before it gets into production. If you have problems at any of these in the future, or at Rossing or Ranger, it’s going to impact the market. If you had some problem with the HEU deal between U.S. and Russia, it could have a devastating impact on the market. In the past, these problems have been caused by fire and floods, but other factors such as trade policies or the shortage of equipment could negatively impact supplies going forward.

StockInterview: But then why did the Cigar Lake delay seem to pass by unnoticed?

Jeff Combs: It hasn’t seemed to have gotten a lot reaction in the market. I think it depends on how people look at it. I’ve heard somebody say, “Well, it just means that it just takes 2.5 million pounds of production out of the market because it gets delayed 6 months.” Unless Cameco increases the rate at which it ramps up Cigar Lake, then it’s going to take more than 2.5 million pounds out of the market, because it’s not going to get to its desired production level until half a year later. Production will be lower in the intervening years, as well. The problem is that this delay in production is coming at a time when supplies are very tight in the market, the 2007-2009 timeframe. I think it could also impact the market by increasing the levels of inventories held because you really don’t know when the next flood or next problem is going to occur. Until production expands more, any shock to supply could send prices much, much higher.

StockInterview: What should U.S. utilities do to protect their supply channels in the face of possible market shocks and especially in light of the aggressive Asian appetite for uranium?

Jeff Combs: That’s a good question. I think that U.S. utilities should support the expansion of production in the United States, in addition to maintaining their supply channels to major uranium producing countries, or perhaps developing them in the case of Kazakhstan. I think it’s more of a case that U.S. utilities should look at what all their options are, try to stimulate additional supply options, and in the process promote domestic production. Right now the market is fairly concentrated. There are not a lot of suppliers. While foreign utilities haven’t been, to date, looking at the U.S. as a supply source, they also have a desire to promote supply diversity, and could look to the U.S. for supply in the future.

StockInterview: To be blunt, are U.S. utilities going to get caught “with their pants down,” at some point during this decade?

Jeff Combs: If you had some kind of supply interruption or shock as we were talking about before, certainly that would create problems, not just for U.S. utilities, but for any utilities that were uncovered or have contract payment terms that relate to the market price with no real ceiling price protection. If you have really aggressive nuclear expansion in China, if India is allowed to play in the market, and if Russia goes ahead with its reactor expansion program, this makes the chances of price getting out of control somewhat greater down the road. We’ve been warning of these issues for a while.

I clearly don’t think we’re out of the woods yet. When I say that we’re not out of the woods yet, I still believe that some utilities may be putting too much faith in current prices in that they believe that the now higher prices will take care of the problem of future supplies. While higher prices will certainly stimulate more production, I think that you must ask the question whether these prices are the antidote for the supply problem, or whether they are more a symptom of a severe deficit of supply that the market is facing. The answer to this probably determines how proactive utilities will be in securing future supplies. We wrote an editorial in 2003 that I think pretty well captured the state of the market at that time and the market environment we have seen since.

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