Deregulation is working: beneath the controversy, the market is pointing at a solution. (Editorial).(economic analysis, forecasts for energy market)(Editorial)

Full disclosure: My wife and I joke about our ability to make money by picking stocks. When we need a tax write off, we call a brother-in-law for a tip so we can lose money quickly, without any of the irksome up ticks that we might get if we used a broker. Deep down, I know we would do better stuffing money in a mattress.

So, you should be fully confident when I say that the deregulated energy market is working, despite predictions of bankruptcies and defaults haunting the major energy traders and merchant generators in the U.S. In return for your confidence in me, I promise a stock tip for those who read through to the end.

Background

Just over a year ago, Enron's stock was free falling from the dizzying heights its energy trading operation had helped it achieve in an increasingly deregulated environment. Surely, investors thought, other companies would profit from Enron's fall, because the country's insatiable demand for power was already leading to energy shortages in places like California, Nevada, and New York.

Merchant generators hurried to buy existing plants and complained that expedited siting laws in states like New York were still too cumbersome, even with record numbers of new plants under construction.

While we marveled at Enron's flameout, and then Arthur Andersen's, the fundamentals began to shift:

* Load growth had slowed.