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The Commodity Futures Trading Commission plans to issue a report next month suggesting speculators played a significant role in driving wild swings in oil prices -- a reversal of an earlier CFTC position that augurs intensifying scrutiny on investors.
What was all that jazz some of you folks were talking about...
Further, in what is becoming depressingly normal, the firm of Goldman Sachs was smack dab in the middle of it.
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If you use the WSJ, you're only going to get the corporate dance and not the real story:
Deregulation of the Energy Markets caused the oil spike.
The Enron Loophole in particular, which is still wide open.
Deregulation seem to be the root of many of America's problems. Deregulation was the trigger that turned our economy into a fantasy land. Well, reality bites doesn't it
Further, in what is becoming depressingly normal, the firm of Goldman Sachs was smack dab in the middle of it.
Along with George Soros.
Quote:
You see, the SEC requires all money managers with over $100 million in assets to disclose their U.S.-traded stocks, options and convertible bonds each quarter. And Wednesday, Soros’s hedge fund firm, Soros Fund Management LLC, made its holdings public.
Turns out he increased his stake in one company by roughly 16 million shares, or 74%. And since April, he’s more than tripled his stake in this company to 36.8 million shares, up from 11.4 million.
Deregulation seem to be the root of many of America's problems. Deregulation was the trigger that turned our economy into a fantasy land. Well, reality bites doesn't it
The governments job was to oversee this. It had nothing to do with deregulation. No laws were passed saying turn the other cheek. In fact this is just another thing the government screwd up.
The Role of Speculators
The media and many in Congress have seized upon the role that financial market participants
– hedge funds, commodity index funds, and other “speculators” – have played
in the run-up of oil prices. A great deal has been made of the fact that participants who
do not operate directly in the oil industry have been taking larger financial positions in
oil futures markets. This, the argument goes, has driven up prices well in excess of those
justified by supply and demand fundamentals.
Back then, we referred to these assertions as the “tail wagging the dog” theory of markets. In this theory, trading activity, particularly speculative trading, in the relatively small futures market could carry enough weight to drive prices in the relatively large cash security markets to unreasonable levels. Today we see many of the same charges being leveled. This time the charge is that excessive speculative trading in the energy futures and over-the-counter (OTC) markets is leading to higher prices and volatility in the physical energy markets.
The idea that a group of speculators can simply enter the market, buy up futures positions, and sustain a long term manipulation of the market, defies logic.
Shipping brokers in Tokyo say that Morgan Stanley has joined a growing international scramble to secure an oil supertanker and use it to store millions of barrels of crude in what commodity dealers believe may be the “trade of the year”...
...The same brokers said that, in addition to the commodities trading arm of Citigroup, at least two other Wall Street names had recently expressed interest in procuring a supertanker for use throughout the year as a giant floating oil container.
Further, in what is becoming depressingly normal, the firm of Goldman Sachs was smack dab in the middle of it.
They have always been in it..just not out front in the MSM stories.
JP Morgan is another big one too but doesn't make headlines too much.
Very interesting stories surrounding JPMorgan and Bear Sterns as well as JP Morgan and Lehman.
The competition has been wiped out. The two remaining are very powerful and are free from any government oversight after paying back their TARP.
JPM is the biggest derivative player on Wall Street now.
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