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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsGoldman Sachs now admits that at least $27 of the price of crude oil is from reckless speculation
http://thinkprogress.org/report/koch-oil-speculation/n April,(2011?) ThinkProgress caused a stir when we uncovered a series of Koch Industries corporate documents revealing the companys role as an oil speculator. Like many oil companies, Koch uses legitimate hedging products to create price stability. However, the documents reveal that Koch is also participating in the unregulated derivatives markets as a financial player, buying and selling speculative products that are increasingly contributing to the skyrocketing price of oil. Excessive energy speculation today is at its highest levels ever, and even Goldman Sachs now admits that at least $27 of the price of crude oil is a result from reckless speculation rather than market fundamentals of supply and demand. Many experts interviewed by ThinkProgress argue that the figure is far higher, and out of control speculation has doubled the current price of crude oil.
October 6, 1986: First oil derivative is introduced to Wall Street by traders at Koch. Koch Industries executive Lawrence Kitchen devised the first ever oil-indexed price swap between Koch Industries and Chase Manhattan Bank. At the time, such derivatives had been limited to currency markets, and the shift of creating a synthetic financial instrument based on the value of crude oil was revolutionary. For an agreed-upon period, an oil swap is a contract where one party makes payments based on a fixed oil price, and the other party makes payments back based on the changing spot price of oil. In July of 2009, EnergyRisk magazine, a publication for commodity traders, posted a piece exploring the very first oil derivatives and Kochs role in developing them.
1990-1992: Koch, along with several oil companies and Wall Street speculators, form a coalition lobbying group to deregulate oil speculation. A coalition called The Energy Group is organized to press the Commodity Futures Trading Commission (CFTC) to allow oil derivatives to be traded off the NYMEX or any other regulated exchange. Participants in the coalition include Koch, Enron, Phibro (a powerful commodity speculator firm recently sold from Citigroup to Occidental Petroleum), J. Aron & Co (a commodity trading division of Goldman Sachs), BP, and other companies.
January 21, 1993. Wendy Gramm makes first major move to deregulate oil speculation. On the final day of the [George H.W.] Bush administration, January 21, 1993, [CFTC chairwoman] Wendy Gramm approved the rule exempting key energy futures contracts from government regulation and returned a great chunk of the energy market to the grand old days of unregulated futures trading, writes author Antonia Juhasz in the book Tyranny of Oil. The move mirrored the demands made by Kochs lobbying coalition, The Energy Group. Gramm, the wife of then-Sen. Phil Gramm (R-TX), leaves the Commodity Futues Trading Commission and a month later joins the board of directors of Enron.
How is this okay?
Why doesn't Obama use the bully pulpit to expose this?
Millions of American are starving, homeless, so that these assholes can make more money to use to buy more corrupt Republicans?
Remember when gas was $1 and you could drive anywhere for next to nothing, enjoy national parks, drive to see family etc.
Now it cost $300 per month just to get to work and back?
arcane1
(38,613 posts)PoutrageFatigue
(416 posts)...but i think that $27 is far too low...if that's what they're willing to admit to, the real number is likely to be much, MUCH higher..
merrily
(45,251 posts)Initech
(100,081 posts)The criminals in this world are the speculation traders and billionaire CEOs..
RKP5637
(67,111 posts)most part, one just travels along unscathed by the legal system and with enough money one can usually buy themselves out of a bad situation and return to more shenanigans. And if you play it right, the moron factor of the US populace will see you as a great hero.
merrily
(45,251 posts)BrotherIvan
(9,126 posts)I can't wait for them to die.
valerief
(53,235 posts)valerief
(53,235 posts)accessible by efficient public transportation and/or we were driving electric cars.
KurtNYC
(14,549 posts)airplaneman
(1,239 posts)I am convinced they suck up more than 90% of the money to be made. The rest of us are screwed. This is probably 75% of why the rich are getting richer and the rest of us are sinking.
I would recommend breaking up all these banks.
-Airplane
cstanleytech
(26,295 posts)plus alot of the retail chains could do with a large breakup imo.
airplaneman
(1,239 posts)It is much healthier to have a bunch of small business rather than big monopolies.
Eisenhower campaigned on keep antitrust breakup alive.
Big Food, Walmart, Big Pharma. The Oil companies - the list goes on and on.
Reminds me of a good joke.
What are the three branched of government.
Answer,
Financial, energy, and pharma.
-Airplane
Tierra_y_Libertad
(50,414 posts)rhett o rick
(55,981 posts)will enable her to make them toe the line.
(if you need the tag you are worse off than me)
cstanleytech
(26,295 posts)as the rich and powerful still control the other branches of the government.
I mean we are at the point where you might as well stick nascar ad like stickers on the varies elected officials as well as many of the SCOTUS judges.
rhett o rick
(55,981 posts)myself we had a chance. It's really all I have, so plez don't take it away.
AZ Progressive
(3,411 posts)Sad to say it.