Posted on 02/20/2010 7:34:50 AM PST by milwguy
Forget CDOs and other inventions of the great credit bubble. That’s all old hat. Investment bankers are moving on to an area of securities trading that is potentially even more lucrative, and what’s more, even has a social value – saving the planet. Or supposedly so, anyway. I’ve long had my suspicions about the great carbon trading bubble, and I’ve had them pretty much confirmed by a brilliant article which has been drawn to my attention by one Mark Schapiro in Harper’s magazine.
According to Mr Schapiro, carbon trading is now the fastest growing commodities market on earth. Since Kyoto signatories bought in to the cap and trade concept in 2005, there have been more than $300bn carbon transactions, prompting several investment banks, including Goldman Sachs and Barclays, to set up their own carbon trading desks. But that’s just the start. If President Obama and his supporters can institute a cap-and-trade system in the United States – and that’s a big if for this increasingly marooned presidency – demand could explode into a $2 to $3 trillion market.
(Excerpt) Read more at blogs.telegraph.co.uk ...
I posted an article about this many months ago....here is what I said back in June of 2009........
While watching CNBC this morning the whole cap and tax scheme crystalized in my mind. They had a guest host there from UBS and the he was espousing the Messiah’s economic plans. He went into the whole green jobs thing, and then two Congressmen came on. The one anti cap and tax Congressmam pointed out how ludicrous the UBS bankers arguments about green jobs was. Like the Spanish study just out from their ‘green economy’ showing for every green job created, two regular ones are lost. Also that it took subsidies of 750K per job to create each job.
The whole time the UBS guy on split screen just sat there and smiled, his smile getting bigger the longer the Congressman spoke. The UBS guy knows what the MSM and most Americans do not, and this came to me like a bolt of lightning as I watched the UBS guy smile.
Cap and Trade is the replacement for Subprime and securitized mortgages. The 50 to 1 leverage the banks used the last 10 years, etc. made Wall St rich. Without a housing bubble, the only way the bankers can continue to make money at our expense is cap and trade. Why? BECAUSE THEY WILL BE RUNNING THE MARKET FOR CARBON OFFSETS!!! The UBS’s, Goldman Sachs, etc of the world will game the system the same way they made liar loans, 110% mortgages, etc.
Cap and Tax is the bankers next big thing, and the main reason Enron went down and the Jeff Skilling and Andy Fastows of the world were hauled off to jail was cap and tax, not manipulating the energy prices.
Kenny Lay, Skilling and company actually met with Clinton in the White House to start this ball rolling. Once the bankers found out about this, they had to stop them by any means necessary to keep the pot of gold for themselves.
The smile on the UBS bankers face was like the cat who caught the canary, he can taste the money they will make by selling nothing but air. No cost, 100% profit. To the corrupt bankers, it does not get better than that.
Here is another link which discusses Matt Taibbi’s articles in Rolling Stone where he exposes Goldman Sachs involvement in this scam.
http://business.theatlantic.com/2009/06/is_goldman_sachs_the_root_of_all_evil.php
What’s the price of carbon credits doing?
Somewhere I read that the price had fallen from $7 to $0.10 per unit. Was someone just speculating on a price drop?
Not a first.
Enron traded “unique” commodities. Seems like I remember one article or TV broadcast about the trading AIR.
[Snip] As for the details about how it makes money, Enron says that’s proprietary information, sort of like Coca-Cola’s secret formula. Fastow, who points out that Enron has 1,217 trading “books” for different commodities, says, “We don’t want anyone to know what’s on those books. We don’t want to tell anyone where we’re making money.” [Snip] (from http://www.uic.edu/classes/actg/actg516rtr/Readings-M/04-Is-Enron-Overpriced-Mar-05-01-Fortune.htm)
Guess this is Round 2. Or is it Round 3. Beginning to lose track.
This just seems to be an investment in a government’s (or taxation authority’s) ability to collect tax revenue from carbon emitting companies. The government adds no value and only acts as a drag on wealth producing companies. With time, those companies will become less productive and produce less revenue and lead the government to raise more taxes which will lead to less revenue.
Aside from an initial rise due to false expectations, this seems like a bad idea. Perhaps there will be a short fund.
A Carbon Offset is derives it’s value from promises of future government coercion.
With China and India begging out, and the US looking like there will be no legislation for now it doesn’t look so good in the carbon coercion market.
Until every last demoncrap is out of office and IN JAIL, this blood-sucking zombie will NOT DIE.
By the way, book burning is an excellent idea when it comes to TIME, NEWSWEEK, USA TOADY (sic), New York Times, Washington Post, etc. If those went totally and completely OUT OF BUSINESS, the world would be a much better place.
When you see such an item in a waiting room, stealthly escort it to the restroom garbage, where it belongs. It's a small thing, but it adds up...
It took you this long? Just the thought of Green Jobs is laughable. Trading Carbon Credits has been a joke from the start. We had that here for a long time with pollution credits, you know acid rain, right, or the famous Jimmy Carter synfuel credits. My current employer made big profits in the 80's and 90's because of the syn fuel credits, it was a joke. When they went away they had to figure out a way to make real money based on real production.
People investing in these Carbon Offsets are in for a great big bath when this thing comes crashing down.
Bumped. Bookmarked.
milwguy you are spot on, carbon credits are the new derivatives or phantom securities, not worth a cr@p, but packaged and leveraged to fleece the stooges who end up holding them. Big money has played this tune several times since the 1990’s and the sheep line up to be sheared.
I think the bubble is already bursting. It will soon be time again to invest in traditional oil and gas industries.
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