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More election consequences

fff

Well-known member
A key federal regulator said Thursday that it's been probing whether speculators are manipulating the price of oil and gasoline and announced a series of measures to make the opaque world of oil trading more transparent.

In a surprise announcement, the Commodity Futures Trading Commission (CFTC) confirmed that since last December it's been investigating the trading of contracts for future deliveries of oil, commonly called futures contracts.

"Although the commission ordinarily conducts enforcement investigations on a confidential basis, the commission is taking the extraordinary step of disclosing this investigation because of today's unprecedented market conditions," the statement said. "The specifics of the ongoing investigation remain confidential. All commission enforcement inquiries are focused on ensuring that the markets are properly policed for manipulation and abusive practices."

Although disclosing the investigation helps give the impression that Washington is acting to curb abuses that may be helping to drive up energy prices, it also could tip off those who are being investigated. Commission spokesman R. David Gary told McClatchy "given the prevailing market conditions and that they are of unprecedented nature," the disclosure was necessary.

"While these investigations are time- and resource-intensive, obviously a considerable amount of time has elapsed since the investigation" began, he said.

The acknowledgement of the probe seemed to suggest that there might be some truth to rumors of market manipulation. Normally, probes are kept quiet to avoid damaging reputations if no wrongdoing is uncovered.

If speculators are running up oil prices, the obvious next question is by how much?

Former Federal Reserve chairman Alan Greenspan has guessed that speculators may add at least $10 to the price of a barrel of oil. Other analysts have put the figure as high as $20.

A barrel of crude oil contains 42 gallons of oil, but a $1 rise in per-barrel costs doesn't translate an equal increase in the cost of gasoline. According to the American Petroleum Institute, crude oil costs about $1.09 more per gallon since Jan. 1, while gasoline has risen about 70 cents per gallon.

It's hard to say how much speculation has contributed to higher energy prices because growing global demand for energy and shrinking oil production have prompted fears of supply disruptions. Traders factor in a so-called risk premium into the price.

The unusual CFTC announcement followed several congressional hearings, the latest on May 20, where a prominent hedge fund manager testified that speculators in commodities markets are running up the price that ordinary Americans pay for gasoline and food.

"You have asked the question, 'Are institutional investors contributing to food and energy price inflation?' And my unequivocal answer is 'YES,' " Michael Masters, a portfolio manager for Masters Capital Management, said in prepared testimony.

Masters runs a hedge fund that invests pools of money on behalf of wealthy investors, and he told senators that the prices of most major commodities such as wheat, corn and oil have doubled and in some cases tripled over the past five years while supplies of them are adequate. The reason, he said, "is a demand shock coming from a new category of participant in the commodities futures markets: institutional investors."

Commodities markets have always attracted speculators who try to make fortunes by betting on the shifting prices of everything from pork bellies to oil. But today's commodities markets are flooded with money from deep-pocketed investors such as corporate and government pension funds, university endowments and foreign-owned investment vehicles called sovereign wealth funds.

These players, called index speculators, far outnumber the investors who plan to take delivery of a barrel of oil or a bushel of corn. Index speculators tend to distribute their money across an index of two dozen or so major commodities and essentially bet that prices will go up. In industry parlance, they "go long."

In the stock market, this strategy of buying and holding is normal. But trading in most commodities happens on a much smaller scale, so these indexed investments are overwhelming trading.

"You cannot throw this much 'long' money into a relatively small market without the ability to have a supply response and prices not go up," said Howard Simons, the president of Rosewood Trading, an economic research firm in Glenview, Ill. "It has to go up."

http://www.mcclatchydc.com/251/story/38914.html
 

Sandhusker

Well-known member
A perfect example of why the two bone-heads the Democrats are offering, who don't even know the basics of taxation, would be way over their heads on issues like this - unless, of course, you count Hillary's experience with cattle futures....
 
A

Anonymous

Guest
The Truth
James Whitmore
MoneyNews


Oil

Now, I want to turn to oil. I will be brief concerning my feelings about the oil situation. This entire run-up of oil prices is a very carefully planned event by the oil suppliers, the Middle East producers being most prominent. If you believe otherwise, you just do not understand markets.

Markets always like a “hot” stock. That will never change. But, it always, I repeat always, takes a “promoter” to get a “hot” stock hot. Promoters will spend money advertising, paying writers to “plug” a stock, buy their way onto radio and TV shows, or whatever it takes to get investors’ attention. Promoters will work with brokerage houses and individual brokers to promote their stock to investors and, if necessary, even bankroll the buying to move a stock higher.

But all this takes time, money, and lots of heavy duty coordination to accomplish. True, now and then a true rush to a stock is caused by a totally unique product like Xerox, Apple's iPod, and a few others I could name. But, that only happens a few times every decade. Most of the “hot” stocks out there make only the promoters and a few of the truly savvy speculators money. The average investors comes out poorer almost every time.

No, this oil move is a carefully orchestrated event. Huge money pools are financing the buying of the futures contracts to run up the prices. Giant power centers are making sure that no one gets “out of line” in this incredible fleecing of the non-petroleum countries.

The folks behind this push are the same ones that brought us the 1973-74 gas lines and changed the world’s financial power centers forever. Only this time the reason for the move by these folks is quite different.

The oil producers can see the handwriting on the wall. Oil will soon become just one of many power sources in the world. The so-called alternative fuel sources will force oil producers to reduce their price per barrel by a huge margin and for good in the next five to seven years. To “make hay while the sun shines” so to speak, the oil powers are using their huge money pools to run up prices that then translate into higher prices per barrel, even when nothing has changed, especially production costs.



All the talk of running out of oil is nonsense. If we want it bad enough, we could do what the Nazis did in WWII and just make it in chemical plants. Did you know that German scientists did just that over 50 years ago and maintained their entire war machine with synthetic fuel?

If you question this, just look at the diamond business. We can now make diamonds that are truly difficult to distinguish from the real thing and for very low cost. Yes, the diamond business is very worried.

No, this oil move is a careful plan to fleece the world of huge piles of money that will then be used to buy banks, insurance companies, food companies, almost any high grossing consumer goods company, regardless of its location in the world. Thus, when oil does fall from its throne, the income from these purchased businesses they own and control will replace the oil income. Who needs oil?

This fleecing is going on even as I write this article. Look in your local newspaper at the companies being bought. Where do you think the money is coming from? It is coming from “private investors” (who are their partners), banks (already partly-owned by oil powers) and other innocuously named private groups funded by the oil giants to disguise their oil-backed involvement.

Look, I don’t write this to condemn anybody. I just want the truth out there on the table. Maybe then somebody in authority will do something to bring a quicker end to this fleecing. Where are the politicians in all this? Where are all the regulators in all this? Surely the Commodity Futures Trading Commission (CFTC) has the power to cool down overheated markets. I used to trade commodities, and believe me, the CFTC can do just about anything they want to a market. Do any of you remember the Hunt Brothers’ attempt to corner a market in the 1980s? The politicians and regulators cut them off at the knees, as they say in my business. But, this time it is not two brothers doing the cornering, it is a multi-trillion-dollar combine that knows they have the power to hold back almost any action that will impede them. Money is power. A huge amount of money is huge power.

Well, that is all I have to say for today. I just wanted to put it in writing that 95 percent of what you hear about the dollar and oil is gibberish designed either to sell something or to bring influence to bear for political reasons. But, that has been going on for centuries and will never change. In this case, however, it is just that the stakes are far, far bigger.

Next time you hear the gibberish, just change the channel, turn the page, or change the subject to football or baseball or some friendly conversation topic. You will accomplish a much more productive outcome.
 

TSR

Well-known member
Oldtimer said:
The Truth
James Whitmore
MoneyNews


Oil

Now, I want to turn to oil. I will be brief concerning my feelings about the oil situation. This entire run-up of oil prices is a very carefully planned event by the oil suppliers, the Middle East producers being most prominent. If you believe otherwise, you just do not understand markets.

Markets always like a “hot” stock. That will never change. But, it always, I repeat always, takes a “promoter” to get a “hot” stock hot. Promoters will spend money advertising, paying writers to “plug” a stock, buy their way onto radio and TV shows, or whatever it takes to get investors’ attention. Promoters will work with brokerage houses and individual brokers to promote their stock to investors and, if necessary, even bankroll the buying to move a stock higher.

But all this takes time, money, and lots of heavy duty coordination to accomplish. True, now and then a true rush to a stock is caused by a totally unique product like Xerox, Apple's iPod, and a few others I could name. But, that only happens a few times every decade. Most of the “hot” stocks out there make only the promoters and a few of the truly savvy speculators money. The average investors comes out poorer almost every time.

No, this oil move is a carefully orchestrated event. Huge money pools are financing the buying of the futures contracts to run up the prices. Giant power centers are making sure that no one gets “out of line” in this incredible fleecing of the non-petroleum countries.

The folks behind this push are the same ones that brought us the 1973-74 gas lines and changed the world’s financial power centers forever. Only this time the reason for the move by these folks is quite different.

The oil producers can see the handwriting on the wall. Oil will soon become just one of many power sources in the world. The so-called alternative fuel sources will force oil producers to reduce their price per barrel by a huge margin and for good in the next five to seven years. To “make hay while the sun shines” so to speak, the oil powers are using their huge money pools to run up prices that then translate into higher prices per barrel, even when nothing has changed, especially production costs.



All the talk of running out of oil is nonsense. If we want it bad enough, we could do what the Nazis did in WWII and just make it in chemical plants. Did you know that German scientists did just that over 50 years ago and maintained their entire war machine with synthetic fuel?

If you question this, just look at the diamond business. We can now make diamonds that are truly difficult to distinguish from the real thing and for very low cost. Yes, the diamond business is very worried.

No, this oil move is a careful plan to fleece the world of huge piles of money that will then be used to buy banks, insurance companies, food companies, almost any high grossing consumer goods company, regardless of its location in the world. Thus, when oil does fall from its throne, the income from these purchased businesses they own and control will replace the oil income. Who needs oil?

This fleecing is going on even as I write this article. Look in your local newspaper at the companies being bought. Where do you think the money is coming from? It is coming from “private investors” (who are their partners), banks (already partly-owned by oil powers) and other innocuously named private groups funded by the oil giants to disguise their oil-backed involvement.

Look, I don’t write this to condemn anybody. I just want the truth out there on the table. Maybe then somebody in authority will do something to bring a quicker end to this fleecing. Where are the politicians in all this? Where are all the regulators in all this? Surely the Commodity Futures Trading Commission (CFTC) has the power to cool down overheated markets. I used to trade commodities, and believe me, the CFTC can do just about anything they want to a market. Do any of you remember the Hunt Brothers’ attempt to corner a market in the 1980s? The politicians and regulators cut them off at the knees, as they say in my business. But, this time it is not two brothers doing the cornering, it is a multi-trillion-dollar combine that knows they have the power to hold back almost any action that will impede them. Money is power. A huge amount of money is huge power.

Well, that is all I have to say for today. I just wanted to put it in writing that 95 percent of what you hear about the dollar and oil is gibberish designed either to sell something or to bring influence to bear for political reasons. But, that has been going on for centuries and will never change. In this case, however, it is just that the stakes are far, far bigger.

Next time you hear the gibberish, just change the channel, turn the page, or change the subject to football or baseball or some friendly conversation topic. You will accomplish a much more productive outcome.

Naw, Naw, Naw, Otimer its just the competition for oil from China and India. There's no conspiring going on, that's why Cheny's meeting with the Energy Task Force was made public. Yeah right!
 
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