A Few Speculators Dominate the Vast Market for Oil Trading
How is speculation driving up the price of oil? Ask Goldman Sucks (You could ask Enron but they’re dead, yet their legacy lives on!). [Jesse’s Café Américain]
“Regulators had long classified a private Swiss energy conglomerate called Vitol as a trader that primarily helped industrial firms that needed oil to run their businesses.
“But when the Commodity Futures Trading Commission examined Vitol’s books last month, it found that the firm was in fact more of a speculator, holding oil contracts as a profit-making investment rather than a means of lining up the actual delivery of fuel. Even more surprising to the commodities markets was the massive size of Vitol’s portfolio — at one point in July, the firm held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange.”
Even a broken clock is right twice a day
Myron Scholes (Long Term CapitalManagement) predicted “the yearlong credit squeeze will inflict more pain on the world economy and financial markets.” [Bloomie]
“The crisis is ‘not over and I’m not exactly sure when it’s going to end,” Scholes said today at a conference in Lindau, Germany, featuring 14 Nobel laureates in economics. McFadden said in an interview ‘that as the crisis continues you will see a lot of business failures.’ “
No, ya think? Way to call ’em as you see ’em, Mr. Nobel Laureate. Even I could see this coming 2-1/2 years ago, and I ain’t got no formal ecumenical edumacation in the arts of debt money thievery intelligent markets highly efficient markets dollar cost averaging borrowing money because I don’t have any today to buy things I don’t really need to impress people I don’t even know financial engineering alchemy.
Myron, if I may be permitted to use the familiar tone your laureate-ship, I think this guy is wise, you should listen to him:
“It’s not over until it’s over.” -Yogi Berra
Oil, Dollar Lead Commodities Index Toward Biggest Weekly Gain in 33 Years [Bloomie]
Jim “commodites get me hard” Rogers interview [Money Morning]
America: playing musical deck chairs on the Titanic since 2000.