Posted on 05/30/2008 6:34:18 AM PDT by MNJohnnie
America's leading commodities regulator has launched an unprecedented investigation into possible market manipulation in the US crude oil market amid record prices which continue to cripple various parts of the global economy.
The Commodities Future Trading Commission (CFTC), working closely with other international regulators including the Financial Services Authority in the UK, has begun a series of detailed inquiries over concerns that energy speculators are behind the rising oil price.
Do you believe oil to be uniquely manipulated or is it across the board of commodities?
There is a whole world out there that begins to make sense. They explain why sound money (so you can compare values today, tomorrow, and next year) matters, and why fiat and loose money amplifies speculative bubbles and the resulting depression from their bursting.
Now if we could only elected you President.
I agree, you have exactly the right answers.
I'd make a horrible President...but I'd be a pretty good dictator. :>)
What drives markets for commodities up is end consumption growing faster than production.
Speculators can drive up the price of futures, but they can’t drive up demand for end use.
If you buy July Oil..come July you either have to store it or sell it on the spot market. If there weren’t enough demand to support the spot price..you can loose big time.
It only takes a little shortage to move the price a lot and bring out the speculators to drive up the futures.
Please remember that the demand in developing countries..India, China,,Indonesia etc is being fueled partly by subsidized or no tax on petroleum products.
Indonesia is no longer exporting enough oil to be in OPEC.
At the same time Russia, Venezula, and Mexico have screwed up their production.
All these investigations and congressional hearings are diversions...to keep us from blaming the US Congress and President of not having a workable energy policy.
I am disappointed in conservatives who trumpet the diversionary tactics..
And if they have I doubt there's much the CFTC can do about it. Regulations on the commodities markets are nowhere near as strict as those on the stock markets.
FIVE STAR BUMP!!!!!
If you want a list, then all you need do is take a look at yesterday's mkt action. Any market that tanked within about 15 minutes of the announcement of the CFTC proposals is clearly infected by this investment bank/pension fund cabal.
This is called 'the Cockroach Effect'. This bunch know that they're in clear violation of at minimum the spirit of the applicable regulations and statutes, and they cannot tolerate any close scrutiny. Therefore, just like cockroaches, they scatter when someone turns on the lights on their little game. In mkts, 'scattering' is equivalent to 'bailing out', which a fair number of them did yesterday after the CFTC announcement.
Masters' testimony before the Regress last week is absolutely and 100% spot on. And **someone**, presumably CFTC, had better get their act together and rein in these sleazeballs (meaning investment banks, although pension funds hardly have the cleanest hands at the dinner table, either).
I disappointed by Conservative who are so blinkered by political dogma they are unwilling to see the whole picture.
This in no wave diverts attention from the failures of the Congress to produce a sane Energy plan. It is, however, one aspect of the problem we face.
There are bad people, such as George Soro, who are more then willing to manipulate the fiscal systems for political and monetary gains. Bad people exist in every walk of life. The reason we have police forces is to catch the bad guys.
Just cause a guy sits in an office and uses a computer does not make him any less a bad guy then the thug who robs the local liquor store.
One of the basic reasons we have Govt is to protect us from force, fraud and abuse. If there is fraud going on in the Energy markets, it needs to be investigated
Excellent point. I had not considered this.
BTTT
“There is a crucial distinction between Traditional Speculators and Index Speculators: Traditional Speculators provide liquidity by both buying and selling futures. Index Speculators buy futures and then roll their positions by buying calendar spreads. They never sell. Therefore, they consume liquidity and provide zero benefit to the futures markets.”
It seems to me that by never selling, they are treating oil like a stock and not a commodity. Therefore, supply and demand are taken out of the equation.
Analysis and recommendations regarding oil and the Index Speculators
In this case all of these conditions are absent. They are exercising monopolistic power, they have information that others do not have, and commodities costs can be shifted on to the consumer whose demand is very inelastic.
This last is extremely important and not understood by folks who think only one level deep that all commodities transactions are "voluntary at the margin." Well they aren't. Losing your job because you cannot drive to work, or starving because you don't like the price of wheat this morning are not free choices that you have.
Consequently there are "externalities" and the costs of exercising monopolistic control of the commodities market is to force other trade-offs on society. I.e. with forced increases in commodities you cut your restaurant bill, or you cut your vacation, or you make other choices.
11th,
You made your post while I was compiling mine. See post 34.
If the Index Speculators are only buying and holding, it destroys the whole concept of supply and demand.
The cause is that speculators can make money.
No it is well understood. It is called exercising monopolostic/ogopolistic pricing power, just like all market manipulation. The danger of this to the functioning of commodities markets has always been understood which is why their are position limits on speculators. Index speculators have been allowed to get around this through a loophole in the classification of investment banks as commercials rather than speculators.
I understand the oil industry, I don’t know too much about trading. But I know you cannot make money if you don’t sell and future contracts expire. You don’t get your money back, you pay for the right to buy at that price and it just goes away if you don’t use it, 100% loss.
I pinged someone way more knowledgeable on trading. SAJ
can correct me if I’m wrong and provide more information if you have questions.
has Soros been implicated in any of this by name???
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