I sent the information below out to my email lists on 12/08/2009:
Chicago Climate Exchange (CCX) operates North America’s only cap and trade system for all six greenhouse gases, with global affiliates and projects worldwide. http://www.chicagoclimatex.com/content.jsf?id=821
The carbon-trading racket
Hot Air ^ | December 8, 2009 | Ed Morrissey
http://hotair.com/archives/2009/12/08/the-carbon-trading-racket/
Posted on Wednesday, December 09, 2009 2:02:23 PM by Ernest_at_the_Beach
http://www.freerepublic.com/focus/f-news/2403896/posts
If one wants to see why carbon-trading schemes retain so much popularity among the political class, this Times of London exposé explains it well. Britain’s richest man, Lakshmi Mittal, stands to get even richer over the next few years, thanks to the efforts of politicians in handing Mittal’s companies a raft of carbon credits. Mittal’s companies can’t possibly use them all for several years, and so Mittal’s production firms can continue their emissions levels while making a fortune on the futures markets:
LAKSHMI MITTAL, Britain’s richest man, stands to benefit from a £1 billion windfall from a European scheme to curb global warming. His company ArcelorMittal, the steel business where he is chairman and chief executive, will make the gain on “carbon credits” given to it under the European emissions trading scheme (ETS).
The scheme grants companies permits to emit CO2 up to a specified “cap”. Beyond this they must buy extra permits. An investigation has revealed that ArcelorMittal has been given far more carbon permits than it needs. It has the largest allocation of any organisation in Europe.
The investigation has also shown that ArcelorMittal and Eurofer, which represents European steel makers at European level, have lobbied intensively in Brussels. This has included threatening to move plants out of Europe at a cost of 90,000 jobs, and asking European commissioners to meet Mittal.
ArcelorMittal is now free to sell its surplus permits on the market or to hoard them for future use. The latter would allow it to avoid cutting greenhouse gas emissions for years, effectively undermining the point of the scheme.
Either way, the company will have gained assets worth around £1 billion by 2012.
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Woman Who Invented Credit Default Swaps is One of the Key Architects of Carbon Derivatives
Zero Hedge ^ | 12/7/09 | George Washington
http://www.freerepublic.com/focus/f-news/2402958/posts
I have written hundreds of articles documenting that unregulated, speculative derivatives (especially credit default swaps) are a primary cause of the economic crisis.
And I have pointed out that (1) the giant banks will make a killing on carbon trading, (2) while the leading scientist crusading against global warming says it won’t work, and (3) there is a very high probability of massive fraud and insider trading in the carbon trading markets.
Now, Bloomberg notes that the carbon trading scheme will be centered around derivatives:
The banks are preparing to do with carbon what they’ve done before: design and market derivatives contracts that will help client companies hedge their price risk over the long term. They’re also ready to sell carbon-related financial products to outside investors.
[Blythe] Masters says banks must be allowed to lead the way if a mandatory carbon-trading system is going to help save the planet at the lowest possible cost. And derivatives related to carbon must be part of the mix, she says. Derivatives are securities whose value is derived from the value of an underlying commodity — in this case, CO2 and other greenhouse gases...
Who is Blythe Masters?
She is the JP Morgan employee who invented credit default swaps, and is now heading JPM’s carbon trading efforts. As Bloomberg notes (this and all remaining quotes are from the above-linked Bloomberg article):
Masters, 40, oversees the New York bank’s environmental businesses as the firm’s global head of commodities...
As a young London banker in the early 1990s, Masters was part of JPMorgan’s team developing ideas for transferring risk to third parties. She went on to manage credit risk for JPMorgan’s investment bank. Among the credit derivatives that grew from the bank’s early efforts was the credit-default swap. Some in congress are fighting against carbon derivatives:
“People are going to be cutting up carbon futures, and we’ll be in trouble,” says Maria Cantwell, a Democratic senator from Washington state. “You can’t stay ahead of the next tool they’re going to create.”
Cantwell, 51, proposed in November that U.S. state governments be given the right to ban unregulated financial products. “The derivatives market has done so much damage to our economy and is nothing more than a very-high-stakes casino — except that casinos have to abide by regulations,” she wrote in a press release... However, Congress may cave in to industry pressure to let carbon derivatives trade over-the-counter:
The House cap-and-trade bill bans OTC derivatives, requiring that all carbon trading be done on exchanges...The bankers say such a ban would be a mistake...The banks and companies may get their way on carbon derivatives in separate legislation now being worked out in Congress... Financial experts are also opposed to cap and trade:
Even George Soros, the billionaire hedge fund operator, says money managers would find ways to manipulate cap-and-trade markets. “The system can be gamed,” Soros, 79, remarked at a London School of Economics seminar in July. “That’s why financial types like me like it — because there are financial opportunities”...
Hedge fund manager Michael Masters, founder of Masters Capital Management LLC, based in St. Croix, U.S. Virgin Islands [and unrelated to Blythe Masters] says speculators will end up controlling U.S. carbon prices, and their participation could trigger the same type of boom-and-bust cycles that have buffeted other commodities...
The hedge fund manager says that banks will attempt to inflate the carbon market by recruiting investors from hedge funds and pension funds.
“Wall Street is going to sell it as an investment product to people that have nothing to do with carbon,” he says. “Then suddenly investment managers are dominating the asset class, and nothing is related to actual supply and demand. We have seen this movie before.” Indeed, as I have previously pointed out, many environmentalists are opposed to cap and trade as well. For example:
Michelle Chan, a senior policy analyst in San Francisco for Friends of the Earth, isn’t convinced.
“Should we really create a new $2 trillion market when we haven’t yet finished the job of revamping and testing new financial regulation?” she asks. Chan says that, given their recent history, the banks’ ability to turn climate change into a new commodities market should be curbed...
“What we have just been woken up to in the credit crisis — to a jarring and shocking degree — is what happens in the real world,” she says...
Friends of the Earth’s Chan is working hard to prevent the banks from adding carbon to their repertoire. She titled a March FOE report “Subprime Carbon?” In testimony on Capitol Hill, she warned, “Wall Street won’t just be brokering in plain carbon derivatives — they’ll get creative.”
Yes, they’ll get creative, and we have seen this movie before ...an inadequately-regulated carbon derivatives boom will destabilize the economy and lead to another crash.
Democrats were WARNED of Financial crisis and did NOTHING (Fannie/Freddie)
http://www.youtube.com/watch?v=LPSDnGMzIdo&feature=related
Now when I look back to late 08, I see a lot of interesting things:
September 7, 2008
McCain Moves Ahead 48-45
http://www.gallup.com/poll/110050/gallup-daily-mccain-moves-ahead-48-45.aspx
To this very day, I feel there is something strange about the Paulsen advice to Bush to do the first bailout. Paulsen is a Goldman Sachs guy and so is Schumer. (They are both Democrats) Remember Schumer caused a run on IndyMac late June of 08. I don’t think he is a dumb guy.
IndyMac: Mini Bank Run, Thanks to Schumer (late June of 2008)
http://www.housingwire.com/2008/07/01/indymac-mini-bank-run-thanks-to-schumer/
I see Goldman Sachs made out like a bandit in the outcome of all of this. I do not know for sure, but I look backward and forward to now and it all makes me wonder. I just did a Google search and found this:
http://www.thedeal.com/dealscape/2008/09/goldman_eyeing_assets_of_small.php
Is Goldman eyeing failed IndyMac?
Per Rep Paul Kanjorski, Democrat, Pennsylvania:
On Thursday Sept 15, 2008 at roughly 11 AM The Federal Reserve noticed a tremendous draw down of money market accounts in the USA to the tune of $550 Billion dollars in a matter of an hour or two. Money was being removed electronically.
Published September 23, 2008 at 2:26 PM
With Goldman Sachs Group Inc. converting itself to a bank holding company to strengthen its future, the New York-based financial institution is said to be on the prowl for deposits, but not necessarily an entire bank. Such speculation has led some in the media to ask whether Goldman could be looking to acquire the assets of failed IndyMac Federal Bank, which has fallen under the control of the FDIC.
Wednesday, September 24th, 2008 at 4:55 pm
Presidential Address: Bush on Economy
http://www.rightpundits.com/?p=2116
Wed Sep 24, 2008 12:48pm EDT
Obama ahead of McCain amid Wall St. turmoil: poll
http://www.reuters.com/article/topNews/idUSTRE48N17520080924
Glenn Beck Explains The Federal Connection,Goldman Sacks Corruption
http://www.youtube.com/watch?v=_wVQ3_ZaYB4