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Saudi government warned US about Wall Street oil speculators

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  • Saudi government warned US about Wall Street oil speculators

    When gas prices go up we always get some song and dance from the government and so-called experts about why they are so high. As Matt Taibbi from Rolling Stone points out:

    When oil prices surged to a ridiculous $147 a barrel in the summer of 2008, conventional wisdom held that normal supply and demand issues were the cause. Both the Bush administration (in the form of the Commodity Futures Trading Commission) and most of Wall Street (through both media figures and market analysts) blamed such factors as increases in oil demand from the Chinese industrial machine, and the failure of Americans to conserve, for the surge in crude prices.
    Or, they say we need more domestic drilling and we should release some of the Strategic Petroleum Reserve to help ease the huge demand for oil. Well, due to some leaked US cables from Wikileaks and some outstanding reporting from McClatchy, all of that was basically false. And, that world demand for oil in 2008 was actually low, as it is right now, and that the rise in prices was mostly due to oil speculators.

    Well, thanks to Wikileaks, we now know that when the Bush administration reached out to the Saudis in the summer of '08 to ask them to increase oil production to lower prices, the Saudis responded by saying they were having a hard time finding buyers for their oil as it was, and instead asked the Bush administration to rein in Wall Street speculators.
    A McClatchy investigation earlier this month showed the extent to which financial institutions now influence the price of oil. Until recently, end users of oil such as airlines, refineries and other consumer of fuel accounted for about 70 percent of oil trading as they tried to hedge against price fluctuations.

    Today, however, speculators who'll never take possession of a barrel of oil account for that 70 percent of oil futures trading, and the volume of speculative trading has grown fivefold.
    Ahh, it always some how comes full circle back to Wall Street and their collusion with the US government when it comes to screwing the American people. Funny how that works.

    The politicians in Washington could have reined in oil speculators years ago, but that would mean some of their largest donors would loose their insane profits. The flip side to that is the impact that high gas prices have on normal working people and especially small businesses. Aren't the republicans always grandstanding about protecting small business? Of course, the Democrats are also completely complicit in the overall lack of regulation against oil speculation.

    The airlines are obviously not happy about this:

    That's why the Air Transport Association, in a filing March 28 to the CFTC, called for aggressive curbs on speculators. The association complained of rapidly climbing jet fuel prices, which have outpaced the rapid climb in crude prices and have reached their highest point since September 2008, right before the near-collapse of the U.S. economy.

    "At the same time, according to data recently released by the commission, speculators have increased their positions in energy markets by 64 percent compared to June 2008, bringing speculation to the highest level on record," wrote David Berg, the airline group's chief lawyer.
    |TG-X| mp40x



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  • #2
    Re: Saudi government warned US about Wall Street oil speculators

    Stuff like this really makes me wish there was a "wipe em out" button to wipe out all those bastards who run screw people like us. Saddest part is that there is nothing we can really do about it...
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    Do you really want invincible bears running around raping your churches and burning your women?

    Intel i7 3930k @ 4.4ghz, 8gb RAM, 2x GTX 570 1gb, OCZ Vertex 3 120 gig SSD

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    • #3
      Re: Saudi government warned US about Wall Street oil speculators

      The stock market shouldn't be played like a slot machine. I always figured that there should be a, relatively speaking, long period of time a traded stock has to sit unless the trader is willing to pay an extremely profit-unfriendly fee.

      Gee, paying down the debt, "not" raising taxes on the rich (or in other words, letting the rich suffer the same fees bull**** the lower and middle classes get stuck with when their taxes are "lowered"), and gutting speculators all in one blow. I'm sure it would happen!

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      • #4
        Re: Saudi government warned US about Wall Street oil speculators

        From The Boston Globe:

        Sanders tries again on oil price speculation

        MONTPELIER, Vt.U.S. Sen. Bernie Sanders of Vermont wants federal regulators to crack down on oil price speculation.

        The Vermont independent has introduced legislation aimed at forcing federal commodity regulators to halt what he terms excessive oil speculation that has driven up gasoline prices.

        Sanders says a provision in last year's Wall Street reform law required federal regulators to clamp down on speculators, but the Commodity Futures Trading Commission has refused to do so.

        He says the national average price for a gallon of gasoline today is $3.69 a gallon, although supplies are greater and demand lower than two years ago, when prices averaged about $2.44 a gallon.
        Supply is greater and demand is lower, yet, gas prices are still high. I smell a rat, actually, a big group of rats: Wall Street
        |TG-X| mp40x



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