How TARP money ended up in the pockets of Big Oil before TARP was even passed.

Remember back when oil prices started skyrocketing? Went over a hundred bucks a barrel, remember?

Do you know why that happened?

I do.

Investment bankers.

The investment bankers in Goldman Sachs, Lehman Brothers, and several others whose names you might recall from the fall of 2008 went looking for other markets to invest in and make more money. Seems the default credit swaps weren't yielding enough profit and they wanted to diversify in other markets. Several investment bankers came up with the bright idea of investing in oil futures because oil prices seemed to be going up, sort of like real estate prices.

Now none of these investment bankers had actual products to put into this commodity market, unlike the Big Oil companies who both produce the oil and trade the oil on the global market. So what happened next is an artificial demand for oil was introduced into the market.

So the big oil companies sold their oil to the investment bankers at artificially high prices. All of the oil traders from the big oil companies knew damned well and good that the prices they were selling their oil at was too high and they all knew they'd have to buy back lots of that oil later on to refine and produce additional products, but they didn't care. It was obvious what would happen next and they were in it for big bucks.

So the investment bankers have all of this oil that they paid big bucks for at extremely over priced rates. WTF were they going to do with all of this oil? They had no refineries. so they started selling the oil on the open market, flooding the market with oil while demand did not alter one whit.

The price of oil crashed. The big oil companies bought up the oil they had sold at a premium rate for bargain basement prices. Lehman Brothers went belly up because these losses when combined with the losses in the derivatives market meant they were no longer solvent. AIG was forced to pay out claims with money they didn't have.

And Exxon made record breaking profits.

Then the federal government stepped in with TARP to cover the losses that had already ended up in the pockets of Big Oil.

The CFTC is currently investigating several Big Oil Companies, Exxon and BP included, to see if they manipulated the prices of oil during this time period. I'll tell you right now, it is highly unlikely that BP, Exxon, and the rest did anything illegal or engaged in any shenanigans during this time.

They didn't have to.

You had greedy investment bankers moving into a market they knew nothing about creating an artificial demand for a commodity they could do nothing with except sell and that would ultimately result in a bursting of a pricing bubble.

It was like all of the World's greatest poker players sitting at a game and a bunch of rich high school students with trust funds walk in and decide to join the game. The pot got bigger and bigger and there was no way in hell the high school students were going to win. The champs didn't cheat because they didn't have to in order to fleece the novices.

And in the end, you and I picked up the tab for record breaking profits for the oil companies. To add insult to injury, they increased the profits from their refineries when the prices were artifically high and the taxpayers ended up paying for that, too.

And that is how a large portion of the TARP money ended up in the pockets of Big Oil before TARP was even passed.

Unfortunately, they always "touch" the "small people" with one finger...

And we picked up the tab twice, first at the gas pump and next through the TARP fund.

:kick:

All passing it did was insure an immediate full blown meltdown of all financial markets did not not happen.

What TARP did was cover the losses of a bunch of idiots who tried to game systems they had no clue about.

The money was already gone from the companies that would have brought down the world economy.

The saddest bit of all?

Big Oil would have survived the meltdown just fine. In fact, all that money would have been worth even more had the world economy gone completely into the shitter.

That was the title of the post by Operation Mind Crime when TARP passed, he later was discovered to be a freeper mole who went back over to FR after getting TSed here and bragged about his ratfucking.

And there was far more money pumped into the financial services sector than just TARP..

ETA: OMC was one of the most abrasive posters I've ever seen on DU, I never understood how he stayed around so long.

and I agree about OMC.

That was and is inevitable.

As we run out of resources to exploit and as there is less and less to squeeze from labor, capital goes looking for new games.