Dr. Donald Chambers, Professor of Finance at Lafayette College in Easton, PA, recently spoke at AIER about modern finance theory and investing in a time of uncertainty. He has been published in over forty articles and several books on investments, corporate finance and risk management. His lecture, featured below, is divided into 9 video segments.

Today’s record-low mortgage rates offer stunning and unexpected bargains. If you have thoughts of buying or refinancing, it’s worth shopping around now.

Sometimes we do get second, third and fourth chances, and anyone who missed out on a dirt cheap mortgage during the past couple of years now has another, unexpected opportunity as rates hover at record lows.

Whether you are mortgage-shopping for a home purchase or thinking of refinancing an older loan, the changing conditions raise a number of questions about the best option to pursue. A few borrowers may even profit by challenging the common wisdom, which says the traditional 30-year, fixed-rate loan is the best deal around.

Those 30-year deals, which carry the same interest rate and monthly payment for as long as you have the loan, are charging a record low of about 4.6 percent, down from 5.3 percent a year ago, according to Freddie Mac, the government authorized mortgage-investment firm. If you had an older loan at 7 percent, the going rate two years ago, refinancing could save you $152 a month for every $100,000 borrowed, reducing the payment to $513 from $665.

Though still expanding, some of our statistical indicators show troubling signs of weakness.

Weakness among the primary leading indicators of business-cycle conditions shows that the recovery has not gained much momentum in recent months. Although all but one of the leaders are appraised as either expanding or probably expanding, more than half of the most recent data points show them falling or flat.

There are some positive signs among the leaders. New orders for core capital goods rose by 3.8 percent due to increased demand for machinery. (This series and other dollar-denominated series are adjusted for price inflation.) This indicates that manufacturers may be planning to increase production in the coming months. Supporting this view is the steady increase in the ratio of manufacturing and trade sales to inventories, which has now almost rebounded back to its pre-recession level.

New housing permits increased by over 2 percent, primarily due to increases in permits for apartment buildings in the Northeast. Meanwhile, permits for singlefamily homes—which account for nearly three-fourths of all permits—fell to a 14-month low. The federal home buyer credit was extended, with some restrictions, to September 30, which could help boost demand.

Now that a financial reform bill (all 2,300 or so pages of it) has been signed into law, the question is whether regulators will have any more success the next time things get out of hand. Professor Edward J. Kane of Boston College, a speaker in AIER’s 2010 summer program, has his doubts.

As he put it in a talk at AIER in June, “The U.S. and the EU need to rework the incentive structure of private and government supervisors and not focus merely on eliminating gaps in the web of regulation.” In other words, the problem is not the rules but the regulators’ failure to enforce the rules. Here are more excerpts from his talk:

The financial industry and the regulators are aligned against the taxpayers. We really have a very durable political reality. The industry and the regulators have common interests against the taxpayers.

What we’ve seen is a layered breakdown of private market discipline and government supervision.

Of course, this is a failure not only of government. The accounting profession and real estate appraisers did a very bad job. Investment bankers and derivatives dealers designed deceptive deals.

The basic underlying problem is an ethical vacuum in the financial industry. I believe that the watchword of the financial industry is “Never give a sucker an even break.” The taxpayer is the sucker.

The Gulf oil spill disaster and April’s deadly coal mining accident in West Virginia have reminded us that the great scale of our energy use entails risks and costs beyond what we pay for a gallon of gas or a month’s worth of electricity.

They have also added urgency to calls to develop an energy policy to wean the U.S. away from fossil fuels and towards cleaner energy sources. Almost everyone hates Big Oil (or at least BP) and worries about the environmental costs of producing and consuming fossil fuels and the geopolitical costs of importing oil from unfriendly or politically unstable countries. Against these concerns, the vision of a “green” economy fueled by wind and the sun is powerfully appealing.

But there is a huge disconnect between this vision and the reality of our current energy use.