Posted on 04/16/2010 3:36:40 PM PDT by Faketan
Oil prices plunged on Friday after the U.S. Securities and Exchange Commission charged Goldman Sachs with fraud in its marketing of certain subprime mortgage securities, amid a general sell-off in financial and commodity markets.
The allegations against one of the biggest market makers in virtually every markets dampened speculation heading into the weekend. Much like the volcanic eruption in Iceland spewed a cloud of dust over northern Europe that grounded all air travel, the SEC charge cast a pall over financial markets.
The May contract for West Texas Intermediate, which expires next week, settled down $2.27 or 2.7% at $83.24 after briefly dipping below $83 in the wake of the SEC announcement. The benchmark contract settled at $84.92 a week earlier.
Goldman Sachs had no immediate comment. Prices had been drifting lower in equities and other markets prior to the announcement, but fell sharply afterwards, led by a plunge of more than 10% in Goldman shares.
Some analysts speculated that prices could rebound on Monday once the dust has settled, but market participants remained uncertain about the long-term impact of the SEC charge on Goldman’s business and on that of other major banks.
In the past, Goldman has rejected charges of misleading investors when it sold securities that it subsequently shorted in its own trading, asserting that that is the role of a market maker. Goldman is one of the biggest participants in the energy futures markets. Full article at: Goldman Sachs & Energy Markets
Is it just me, or is a bit silly to make allusions to a volcano in Iceland and Goldman Sachs in the same news story?
LOL -- Scrap the volcanoes. I would be more concerned about the usage of Iceland and Goldman Sachs in the same sentence.
I track oil price normalized by the value of the dollar on a daily basis. Today’s drop in both price and normalized price was a regression to the mean, so to speak. Today’s GS news seemed to cause oil’s price to drop, but it was dropping before the SEC announcement and was due to drop, for technical and supply reasons, if nothing else.
Well, Iceland’s evidently got a lot of geothermal energy. Maybe that’s what’s killing oil prices!
Is this the prelude to Obama taking over Goldman Sachs?
LOL again! -- Meltdown of oil prices, meltdown of Icelandic glaciers and meltdown of Iceland's economy.
Don’t know about you, but I lava good mixed metaphor.
But the SEC says Goldman did not tell investors that a hedge fund paid them millions of dollars for the right to select which mortgages would go into the securities. The fund allegedly then set up complex transactions that would pay them well if the securities defaulted.
http://www1.voanews.com/english/news/usa/US-Regulators-Charge-Goldman-Sachs-With-Fraud--91047789.html
Again, very good. I have one for you. Did Cromagma man originate in Iceland?
That one’s painful!
So easy a caveman could do it?
“I track oil price normalized by the value of the dollar on a daily basis.”
Interesting. Is there an easy way to do that? Nat gas held up quite well today, to my delight.
http://finance.yahoo.com/q?s=DX-Y.NYB
There are number of sites that will give oil prices -- I have a widget/gadget on my desktop.
I saw that Nat Gas did well. I did well with that late last year, but my positions now, which are small, are under water.
I divide the price of oil by the dollar index to get the normalized price of oil. I also do the same thing for the stock market. These, plus a few other data points, help me with my technical trading.
What else besides natgas are you following?
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