Posted on 07/29/2009 7:04:57 AM PDT by Arguendo
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahZl9asR.GX8
Prior to the Clinton administration the only players in the oil market were people in the oil business. It should be that way again.
Hmmm - a lack of curbs on investment bank speculators (via the CFMA and the Bush Admin decision to not regulate commodities trades on ICE terminals) played a major role in oil going to $148/bbl, which was HIGHLY disruptive of the lives of millions of Americans. Seems to me that the main disruption that GS is worried about is a disruption of their ability to wreak havoc with markets.
I agree. Little by little, people are starting to catch on to these guys.
And when Goldman speaks, the WH listens. Hell, Goldman practically runs the USG with all of appointments from Goldman Obama has made to staff his administration.
Don’t curb them, but no margins allowed and losses are like professional ganbling losses for tax purposes; nor can a corporation deduct them.
Watch the commodities stabilize, because while civilization craves stability, speculative traders profit on volatility.
I don’t begrudge their profit, but why should we subsidize their losses?
Remind them that Cash is King.
You don’t believe anyone who has the money should be able to buy and sell oil? Why shouldn’t the oil market be a free market?
That used to be General Motors, but look what happened to them.
We're not subdizing them. Corporate losses are corporate losses; they should always be deductible if you want an income tax. If you want a punitive tax that all but bans speculation, then your plan makes sense.
It ain't a free market when a handful of companies such as GS can control a large percentage of a given market when they are neither a producer or consumer of the product. There are reasons for position limits on exchanges such as NYMEX.
Last year we saw the practical limits of free market doctrine. Some people, apparently, are too wound up in dogma to learn from those events.
and we have all discovered... what is good for Goldman, is good for “the market”- since they appear to be one and the same since late 2008. maybe earlier
Goldman Sachs = a corporate Bernie Madoff with a proprietary computer trade program
Speculating on Energy should be banned, period. The very idea of trading energy as a commodity is absolutely absurd, all it leads to is corruption. Its just way to easy to create greed tax on inelastic and vital goods.
Today, a bbl of oil should be $25 to $35 at the top end, even when it was trading at well over $100 a bbl it was only a $35 to $45 a bbl product. Every penny over that that is being spend is nothing more than greed tax feeding corrupt greed of players who should be in jail.
Position limits are one thing. I was responding to a call to ban financial players altogether, which is obviously idiotic.
What on earth leads you to that conclusion? Energy is obviously a commodity (and will be traded globally as one, whether we like it or not), so how else would we trade it?
Today, a bbl of oil should be $25 to $35 at the top end, even when it was trading at well over $100 a bbl it was only a $35 to $45 a bbl product.
And you pulled those numbers out of where?
Yeah... and then I heard that USB and other banks are prohibiting their investors from buying ultra short funds... this latest market rally isn't going to end well...
Bush also staffed his administration with ex GS guys
Remember Henry Paulsen? Josh Bolton? among others
http://www.commondreams.org/headlines06/0820-06.htm
and Clinton before him
check this out- Matt Tabibi on GS “coup”
http://www.youtube.com/watch?v=Ep70LT5ssXE
Unfettered Capitalism breeds corruption.
Capitalism is no more intrinsically moral to the individual than any other ism, a persons worth is only what others deem it to be in a completely unfettered capitalist system. The only difference between an unfettered capitalist society and a socialist or communist society is who engages in the oppression. Unfettered capitalist society its the people with money who engage in the oppression, in socialist and communist its government officials and birthright.
Capitalism must have an moral oversight in order to have a truly free society, and like it or not folks that oversight is government. Capitalism itself is simply amoral, money doesn't give a crap if it killed, raped or abused someone to flow into the hands of another. It doesn't have a morality. Sure the PR campaign is that it is intrinsically moral, and that's just not the case.
Money, is amoral, it assumes the morality of the people who control it, and if there is nothing to keep the people that control it in check, it will be used to oppress just like any other power left unchecked.
The market isn’t rallying, its in a dead cat bounce. We haven’t remotely worked out the crap that has already hit the fan, let alone the crap that’s still coming down the pike.
BTW, anyone who thinks we can actually ban oil speculation is delusional. There’s a global market for oil, and if someone really wants to speculate in it they can form an off-shore hedge fund and sign a futures contract with one of any number of foreign oil-producing nations. Not much we can do about that.
I take it you haven't read the expose in the Rolling Stones earlier this month?
If you haven't, you should read the full article and pay particular attention how GS manipulated the oil trading market last year...
Here's a hint: when we were all paying over $4 a gallon of gas, at that moment in time... the demand for oil was declining and the supply of oil was increasing... if the oil trading market was working correctly... then the price of oil should have gone down... it didn't, it went up instead.
Historical values based on historical supplies and demands prior to the insane hedge fund/speculative influx into the market in the last 5 years. Oil right now is $25-$35 a bbl, even at its peak it was a $35 to $45, everything over that is nothing but speculative greed tax.
In terms of energy trades as a commodity, yea, might want to actually go and read some history on energy being traded like it is now.. didn’t exist all that long ago. All you do when you set up this sort of system is allow people who have no underlying interest in the product or its production or the consumers of it to play with the price. Its a scam.
Exactly, speculators are there as a bridge in the markets. If the potential spreads were not there, they would not be. Also at that point the average business person will not go where the speculators go as they will not assume the risk/return payouts.
Free market where all can participate give us people the best price every time as competition takes the price to where it belongs. The minute you start crimping the players, the markets lose efficiencies which creates similar symptoms again same problems.
The more people in the markets the better it is.
Yes, but you can prevent speculators from distorting normal market forces driven by producers and consumers. The exchanges exist for the needs of industry, not as a playground for speculators.
“You don’t believe anyone who has the money should be able to buy and sell oil? Why shouldn’t the oil market be a free market?”
Heck...I’d like to buy ALL my gasoline and heating oil when I choose...just give me a magnetic stripe-credit-card-like card to use at any gas station....to make my withdrawal...
I love how the GS pom-pom wavers call critics ignoramisses when it was all the Wall Street rocket scientists who helped tank the financial system and then went begging to the government to bail them out.
check this out- Matt Tabibi on GS “coup”
I have read lots of stuff by Taibbi (vice Tabibi) with my subscription to Rolling Stone. He has a definite political agenda and has little journalistic credibility with me, even if I agree with his thesis. Glenn Beck did a show and tell on GS as well showing how GS has infiltrated the USG in many key positions.
Extreme to say the least. Are you one of those 17th-centruy pre-Blackstone "conservatives"?
The fundamental difference between the market and the government is you have no choice but to deal with the government; if you don't like it they can put you in jail or kill you. Absent an monopoly in some essential (and we can argue about whether some level of trust-busting is pro-free market or not), you always have a choice about whether to deal with a market participant. The alternatives may be unsavory at times if you don't have much else going for you, but that's life, it's not the fault of the market.
“Capitalism must have an moral oversight in order to have a truly free society, and like it or not folks that oversight is government.”
and what makes a government “moral”? North Korea has a government. Iran has a government. Stalin and Mao and Saddam Hussein all lead governments. Were these governments more “moral” than what you call “unfettered capitalism”?
I believe our Founders, with their European perspective of history, were far more apprehensive of government than of capitalism. They would contend that unfettered government bred corruption and tyranny.
Have you read Michael Novak’s defense of capitalism?
“The Spirit of Democratic Capitalism”
Might check it out for another philosophical perspective.
http://www.michaelnovak.net/index.cfm?fuseaction=Bookshelf.welcome
Oh, spare me. When you have investment banks taking large positions, well in excess of normal position limits to which other speculators are subject, you get market distortions. The likes of GS are not interested the least in the efficiencies of markets and the movement of goods between producers and consumers.
Correct the Carl Max Capitalists at Goldman want to rule the world.
If the republicans go along with this crap they will never be in charge again.
How? If an off-shore hedge fund wants to buy a futures contract with a foreign oil producer, what can we do about it? And obviously that futures contract will affect the domestic oil market as well.
JULY 28, 2009 Traders Blamed for Oil Spike
CFTC Will Pin ‘08 Price Surge on Speculators, in a Reversal From Bush Findings: http://online.wsj.com/article/SB124874574251485689.html
We can set position limits on trading either by US companies or trading initiated at terminals within the United States. If a country such as Dubai sets up an exchange without limits, end-consumer countries can apply leverage to force that exchange to impose limits consistent with other exchanges such as NYMEX. It is not in the interests of the global economic powers to have another fiasco like we saw last year.
If he can reach a different audience through Rolling Stone, I’ll let him have an agenda. Even a stopped clock can be right twice a day! Sometimes he hits one out of the park, like this one on AIG
http://www.rollingstone.com/politics/story/26793903/the_big_takeover
I prefer his journalistic integrity to that of Pegggy Noonan.
Not necessarily. Optimal prices should reflect both short-term and long-term supply and demand, and if there's good reason to believe there will be future shortages speculators are often the ones who will push up short-term prices (which will reduce demand now, allowing more supply in the future and balancing short-term and long-term prices).
As is turns out, oil may have been over-priced at $147, but it's pretty clear the speculators who pushed it up to that point were correct about the long-term trend, and I expect to see it continue to rise. By pushing up short-term prices, speculators encourage both producers and consumers to respond to this trend sooner rather than later.
In a nutshell, that captures the partisan rot in this country - both parties have their own dogmatic blind spots (driven largely by those who benefit from the dogma in question). And somewhere, any concern for the middle class has been trampled underfoot.
The GOP has one shot to return to power and influence - realize there is a place for regulation and that the GOP needs to be more concerned about the middle class and less concerned about the corporatists.
That is like searching for virtue among whores.
Given the huge profits Goldman and Sachs recently reported and given that a significant amount of said profits was based upon profits made from speculation, there should be no wonder why GOldman has come out saying such. We, the taxpayers, bailed them out, in turn, we get shafted by the same one we bailed out via their speculation ventures.....but yeah, no question they’re right....=.=
I think most people here have a very weak understanding of the microeconomics that are fundamental to any commodities market. Speculation that drives up current prices to reflect expectations about future supply and demand (assuming these expectations are reasonable), rather than simply current supply and demand, is obviously a good thing from an efficiency standpoint, but people have a hard time seeing this.
my 2 cents. goldman is evil company. speculation is not illegal manipulation is and that is what goldman does. are the margin requirements to low yes. you only need 7 grand to buy option on 7 thousand barrels of oil. just punish the manipulators
Didnt the price of oil begin to drop almost immediately after President Bush announced the US would relax restrictions on US drilling and exploration? That was about July 2008. Drill baby drill.
All initiatives now since undone by the obamites.
I’m surpised oil is as low as it is, given the radical agenda that has taken control of the USA. Economic conditions are way worse than anyone in the state-run media is admitting.
Harry Dent (”The Great Depression Ahead”) predicted a bust in commodities bubble in 2010/11. I am keeping his predictions in mind and watching for indicators...
LOL! Speaking of unfettered capitalism... whores are more transparentt than GS execs.
However, GS pushed the envelope on the oil last year... you really need to read the article... oil went from $60 to $147... at a period when demand and supply was going DOWN! Supply and demand was completely out of whack and if you were putting in 50-60 dollars each time at the pump last year... that is why. The futures market was designed as a hedge for the producers... not the speculators... and the rules were in place to prevent speculators from dominating the markets... and GS figured out a way around that... and screwed USA because we all had to pay higher prices...
We can't even stop a cartel like OPEC, and there is far more economic evidence that cartels are destructive than there is that speculation is destructive.
We understand it just fine. Y'all just don't want to re-examine the limits of free market doctrine that allows the likes of GS to distort markets.
Do you even realize commodities market basics? Such as the fact that most participants who are neither consumers nor producers are subject to position limits - but investment banks such as GS and MS were not, dating back to a rule promulgated by the first Bush Admin?
That the CFMA exempted new exchanges from regulation?
That the second Bush Admin, following the CFMA, exempted ICE terminals in the US from federal regulation?
Do you know that speculators took positions and actions on ICE that would have gotten them kicked off NYMEX?
And where do you think the NYMEX regulations came from? Hard, cold experience from what happens when speculators try to manipulate markets.
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