The news that Dynegy is to abandon its energy trading business must cast grave doubt on the future of the entire US electricity market, which replaced vertically integrated regulated monopolies in the 1990s. The earlier collapse of Enron was seen by some optimists as the product of firm-specific fraud, but it’s now clear that the whole energy trading market was based on underestimation of the risks involved. And without energy trading those risks are shifted either back to generators or forward to retailers and consumers. I say a bit more about this here.

Update: Another nail in the coffin
Further update: And another