Oil hit $139 - Is Morgan Stanley manipulating the market?

[bluesbassman]

Oil settled at $138.54, a rise of more than 8 percent. The surged came after Morgan Stanley analyst Ole Slorer predicted strong demand in Asia and tight supplies in the Western Hemisphere could drive prices to $150 by Independence Day, when millions of Americans take to the roads.
http://news.yahoo.com/s/ap/20080606/ap_on_bi_ge/oil_prices;_ylt=Av5fYmQwP8P12tIbna.ic8Fv24cA

Is it just coincidence that on the same day the jobs report comes out saying that the unemployment rate hit 5.5% in May, that a Morgan Stanley energy analyst says oil will hit $150 by July 4th? The combination of these two tidbits of information were most certainly responsible for both the nearly $11 spike in oil and the nearly 400 point drop in the Dow.

This is akin to yelling FIRE! in a crowded theater. You got to know you're going to cause a panic. At what point is enough going to be enough? Does oil have to hit $200 a barrel before it becomes evident to even a republican that we're being taken for a ride?

You can talk about peak oil, alternative energy and the ecology all you want (I'm for improvement in all of those areas), but the fact remains that oil is NOT worth $150. At best it should be trading at about $60. The simple truth is that the commodity is being manipulated for the enrichment of a very small segment of society at the expense of everyone else.

Boycotting your local station for a day or two will not (contrary to the e-mail urban myths floating around) do a thing except hurt the local operator. There needs to be a loud and continuous demand that this blatant manipulation be addressed. Call your congress rep soon and often to let them know that this issue can not be ignored any longer.
:rant:

[DJ13]

1. Yes they were manipulating the markets

Must have been tipped off that those "investigators" looking into manipulations on the NYMEX were taking a long weekend.

It doesnt get any more blatant than what Morgan Stanley did this morning.

[Deja Q]

2. I think proof needs to be shown that they are

not.

After memorial day 2008 when the prices did not go back down, how they usually would after a holiday, would make the blind see. Of course, most people would rather have Oscar Goldman giving me a bionic eye so they can see people strip nekkid from a mile away, but nobody's perfect...

[Andy823]

5. They didn't go down

Last year after memorial day, at least not in my neck of the woods! Last winter I was paying more for diesel than I did all of the rest of the year. Gas pretty much was about the same, maybe up a few cents, but it didn't go down like it usually does!

[newmajority]

3. It's time to start executing these treasonous fucks

And if deliberately crippling this nation's economy isn't treason, I don't know what is.

[Kansas Wyatt]

48. It is government policy to attack any foreign nation who tries to damage the U.S. economy.

My only question for the treasonous fucks, who are running the price up, is...

Guts in or guts out?

[Andy823]

4. Damn right they are!

And they are not alone. Why do you think all of a sudden rumors of Bush invading Iran are coming out? These guys are going to get every penny they lose on the housing bust back, plus more, by raising the price of oil, which they are manipulating, and on food. Two things that we all need, food and energy, and these bastards are manipulating the price while the average American can hardly make ends meet. They need to be put in jail, and we need to regulate the markets so this never happens again. My personnel opinion is to take Oil and food off the commodities market. It would take the leaders of the world to do this, but Germany is already talking about something like this, and I think that Obama could get the U.S. to take the lead when he becomes president. Sadly we will suffer more this year because the "idiot" we have for a leader will never do anything to piss of his "base"! :mad:

[bluesbassman]

7. I agree.

We're now witnessing how easily the commodities market can be manipulated. Keeping oil there only invites more of the same. But it's going to take a lot of noise to make it happen.

[Andy823]

66. Seems like

These investors, hedge funds, and banks can manipulate all kinds of things for their own greed! They need to be regulated and rules need to be set up on "all" kind of trading, but especially on things we all need to survive.

Yes it will take a lot of noise to make things change, but with a new leadership for this country, and a majority in congress, it should be able to happen. If it doesn't than we need to replace the leadership in the democratic party in congress! They say now it's because they don't have the majority, once they get it, then they will have no excuse for not doing the things needed to change this country and take it back from corporate america. We have some really good people in congress, but we still have a leadership with no backbone. If they don't get one next year, they need to hit the road!

[Name removed]

13. Deleted message

Message removed by moderator. Click here to review the message board rules.

[bluesbassman]

20. Okay, so we tough it out.

At what point do you think the market will correct itself? $150? $200? $500? What is that going to do to the rest of our economy? Some things demand to be regulated, and a commodity so critical needs a bit more oversight than what oil is getting now.

[anigbrowl]

26. You can't regulate a commodity traded on global markets, silly.

Are you saying we should start regulating the markets in London? Hey, let's go take over another Middle Eastern country so we can regulate the market directly at source!

Look bbm, all we can do in the short term is subsidize it. I don't know the oil market in sufficient detail day-by-day to say who's driving the speculation but if I had money to put in the market I'd be using some of it to hedge on oil too. The cost of oil and gas is extremely painful right now but we're actually overdue for some economic pain. I predict it's going to hit $200 briefly during the fall and then pull back to about $110 by the end of the year.

[mrdmk]

59. You think!!! Please read this thread

http://upload.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3360517

and if you are really interested, read this PDF in its entirety.

http://hsgac.senate.gov/public/_files/052008Masters.pdf

:hi:

[On the Road]

29. That Might be an Interesting Idea Actually,

BluesBassMan is perfectly sane and intelligent.

Commodities are securities based on the future price. They are supposed to allow sellers (eg farmers) and buyers (eg food manufacturing companies) companies to spread risk over time by locking in future prices. Some companies like Southwest Air have used futures to stay out of trouble in difficult times.

However, commodities are usually bought and sold on margin -- 90% of the money is borrowed. It allows fortunes to be made and lost, and attracts speculators and daytraders who can in some cases create bubbles and distort prices.

Bubbles can happen without a modern exchange or electronically traded securities -- take Dutch tulip bulbs and the South Sea corporation. But margins and electronic trading exacerbate the instability of all markets.

The question is whether the negative effects of the commodity market are starting to outweigh the benefits.
Commodities can be bought and sold perfectly well without there being a futures market.

Personally, I think there might be some things that Washington can do -- reducing margin requirements, delaying executions, maybe introducing a small Tobin tax for transactions to reduce volatility. Over time it may not be necessary, so it should be something that can be undone.

And yes, it is possible to regulate international futures markets. Much of the action takes place in Chicago. There are international alternatives, but they're not available to everyone. NASDAQ, Amex, and the NYSE are all heavily regulated.

[bluesbassman]

30. Nice analysis ribofunk.

I do believe there are alternatives to allowing such a critical commodity to be speculated (read: gambled) on. This is not in the best interest of the US or the global market. No easy answers, but clearly the current system is failing.

FWIW, I am not advocating any sort of Imperialism in regards to oil. The countries that have it should certainly be justly compensated for it. However, it's the middle men speculators, who add no value to the product, that need to be reigned in. IMHO

[anigbrowl]

32. I think you're dreadfully wrong

First, I have no problem with regulating markets in general. I was very happy to hear Obama's proposals on the matter. While I support free markets, I'm not in favor of a free for all and I'm well aware that financial engineering can get drastically out of hand.

That said, such a drastic idea as shutting down futures trading on margin would simply cause market activity to relocate overseas. Futures trading in commodities makes a great deal of sense, since many sensible producers have reasonable desires to hedge against future price movement and doing so on margin functions as an affordable and flexible form of insurance, improving efficient allocation of capital.

I assume you mean you'd like them to increase margin requirements rather than reduce them, as the latter would only exacerbate speculation. I don't see any major benefit in delaying executions. I do think that a Tobin tax is a reasonable idea and has a chance of being something that could be implemented across markets.

My underlying problem is that while irresponsible or avaricious speculation is certainly a bogey of all markets, it actually makes up a relatively small amount of overall market activity and is only noticed during spikes. All futures trading (including stocks and bonds, insofar as they're traded for growth rather than dividend returns) is speculative, but that's not such a bad thing. I feel that a perennial problem on the left is to look at market excesses and use them to characterize markets in general, and then push for quite impractical regulatory solutions that throw the baby out with the bathwater.

If I can draw an analogy, it's a bit like looking at the fact that alcohol causes drunkenness and demanding prohibition. Some people are alcoholics and that's a problem, and most people who drink regularly go overboard from time to time and get drunk. Excessive drunkenness can lead to everything from car accidents to liver failure, so it's quite true that mass consumption of alcohol comes with a social cost. However, most of us are responsible enough to drink moderately and even when we get drunk, to do so mildly rather than getting completely plastered. I don't think prohibition was a good or workable policy.

When I see people saying we've got to ban speculation or something I feel they're taking the same approach - instead of examining the roots of the problem and asking what we can do to insulate ourselves from its worst effects while preserving the benefits, they want to smash the system with a hammer in the belief that such behavior can just be legislated away.

[On the Road]

44. It *Would* Be A Drastic Step

and would eventually result in movement overseas. But what is good about the suggestion is that is directed at the nature of the futures markets rather supply, demand, and reserves. That is not being heard often enough in the debate. It also recognizes that futures markets are a convenience rather than a necessity, which is easy to forget.

It's probably not necessary to eliminate oil futures entirely. There are ways to moderate the excess. The best policies are ones which are simple, less intrusive, easily reversible, and don't affect the basic function of the market.

One way to immediately lower speculation would be to temporarily delay the execution of trades so that all trades are executed once a day during off hours. (There is ample precedent; many funds are done that way.) Traders and brokers would hate it, but it would reduce a lot of the volatility and speculation. There are probably dozens of others that would occur to someone more knowledgeable about market mechanics. None of these need to be permanent.

Tinkering with the markets like this is a last resort. But given the impact that commodities speculation is having on the economy, it's only responsible to think about ways to reduce it. Otherwise the tail is wagging the dog.

[soothsayer]

38. prolly means we should ban derivatives trading on these essentials

[Telly Savalas]

18. If rumors of invasion of Iran are tools used to manipulate oil prices

then are the folks at DU who've been crying wolf about Iran for the last four years part of the conspiracy to keep oil prices high?

[elocs]

6. I think I may move my Vanguaard energy stocks into bonds.

I'd rather lose a little profit and be ahead of the curve when the bubble bursts. I realize that is unAmerican, where the point of investing is to buy high and then sell when the stock tanks. The last time I had this feeling was in August of 2001 when I decided to get out of the market altogether, so I was totally out by 9/11. I have some friends who at that time totally depended on their financial advisor from Prudential who had them mostly in stocks in spite of the fact that they were near retirement. They lost half of all they had invest and will never make it up. Their "advisor" made money either way.

[Condem]

8. Good post, bluesbass

Time to move on to GD:P. C'mon, you have only five days left! We need new blood!

[bluesbassman]

11. Thanks Condem.

Been lurking there and posting occasionally. Plays hell with my BP though!

[Condem]

14. Give it a shot , bluesbass

Most of these fuckers have no idea what they're talking about.

[Bob Dobbs]

9. Speculation=2/3 of oil price.

eronization of gasoline.

Death to energy profiteers.

[Terry in Austin]

16. So, did you get that fact from somewhere?

It's a lot more convenient just to make 'em up, y'know...

Seriously, the supply and demand http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=3396088&mesg_id=3396582">fundamentals put oil in the $100 - $120 range, so the "fear premium" is maybe twenty percent. This week. Some weeks, nothing -- these are just blips.

But all this blame game is just a sideshow. For the longer term, we're in for serious oil decline -- like forever. We can grouse, we can blame, we can get all paranoid and pillory anybody who makes a buck off it -- or, we can start dealing with it.

[Bob Dobbs]

17. Dealing with it with extreme prejudice.

I agree.

[anigbrowl]

33. I'm with you on this

Of course we're seeing a degree of excess and it's unpleasant (sure makes me happy I live in a city with good transit and don't drive a vehicle at the moment). I feel a lot of this anger at the speculators is actually a temper tantrum from people who don't want to deal with the real changes that are coming along.

You just KNOw someone is going to misinterpret this as some sort of endorsement of W's dead-end policies :-/

[Bob Dobbs]

56. A "temper tantrum" at enronizing profiteers?

Of course we need to convert to post petroleum technologies, and would have long ago if not for the same profiteering corporofascists driving this latest spike in energy prices.

For you guys to be defending these criminals holding us all hostage with this type of war profiteering is unconscionable.

I have been bike commuting a 10 mile round trip for the last two years so I'm dealing with it personally. What are you doing about it except defending the corporofascists?

[Terry in Austin]

57. Nothing personal

> For you guys to be defending these criminals holding us all hostage

Bzzt!

No, the sooner they're in orange jumpsuits, the better. When it comes to the "corporofascists," you're preaching to the choir, pal.

The fact is, we let them sell us this car-centric, hyper-consuming way of life in the first place, and if they are "holding us hostage," it's only because we bought in. If it's about blame, then, let's keep it real and bring it on home.

But blame-gaming and four bucks will get you a half-caf latte -- it's a freaking side-show. We can whine all we want about the bad kids, but mommy won't be making them stand in the corner any time soon. Before that, their worst nightmare will happen to them -- they'll become irrelevant.

The real show is bike commuting a 10 mile round trip, like you do. It's getting your veggies from the neighborhood farm. It's getting with city council members to change idiot zoning and land-use ordinances. It's telling your kids that there's probably not much future in getting that MBA. It's an endless number of adaptations to a low-energy future, and you probably know most of them already.

Can I hear the choir sing on this one?

[anigbrowl]

10. Predicting the market doesn't mean you're manipulating it

What are you smoking? There is a world outside the US where oil is traded as well you know, are analysists supposed to keep silent whenever they have any bad news to impart? You remind me of the stock maniacs in the late 90s that thought Alan Greenspan was trying to piss on their personal parade if he expressed anxiety about anything in public.

Please, get real. It's an analyst's JOB to make educated guesses about where the market will go. To extrapolate from that that they are trying to manipulate the price is an outstanding example of shooting the messenger. I do think the market is being manipulated (although there are also underlying reasons for rising prices) but blaming an analyst for expressing an opinion is just stupid.

[bluesbassman]

19. So you don't see a correlation?

Ole Slorer comes out in the morning with a prediction that oil will hit $150 by 7/4 and by the end of the day oil jumps $11. Sure it's his job to make educated guesses, but it's all too convenient when their "guesses" become reality in a matter of hours. Follow the money. How much do you think MS made on oil today? How much will they make when it hits $150?

And you bet I'll shoot the messenger when he's pointing a gun at me.

[anigbrowl]

23. a correlation is not a cause

You are making the old mistake of post hoc, ergo propter hoc - 'after this, because of this'. It's the guy's JOB to make predictions about the market. What do you want him to do, burn his analyses after he's written them? Grow up for heaven's sake.

"And you bet I'll shoot the messenger when he's pointing a gun at me."

I suppose when you leave the lights on in your car you yell at people who knock on your door to let you know, and blame them for running down your battery? Jesus H Christ on a crutch.

[bluesbassman]

25. No, I try to remain civil and polite, so I'd thank them.

However, if someone places a paper sack full of dog crap on my porch, lights it, rings my doorbell and then laughs from the bushes when I stomp it out, I'll turn the hose on them. Fair enough?

[anigbrowl]

27. This metaphor makes no sense. You're just venting your anger.

I don't blame you for feeling angry, but you're no longer saying anything meaningful about the price of oil now.

[bluesbassman]

28. My mistake. I thought you wanted to trade metaphors.

I'm sorry if I wasn't clear. I'll try to help you understand.

Your metaphor said:

"I suppose when you leave the lights on in your car you yell at people who knock on your door to let you know, and blame them for running down your battery? Jesus H Christ on a crutch."

Insinuating that somehow I was an irrational individual who would blame someone else for what is clearly my mistake and then become abusive (language) toward them.

In my metaphoric response, I indicated that while my first choice is to be civil and polite, if someone intentionally attempts to; A. defraud me (placing concealed dog crap on my porch) B. cause me economic harm (setting fire to my property) C. ridicule me (laughing from the bushes) then I would take appropriate action.

I do hope that this has clarified my metaphoric response to your metaphoric statement, and that perhaps you can see a little bit of my metaphors application my original thought regarding the manipulation of oil in the commodities market. If not, then that's okay, I've enjoyed our exchange anyway.

[anigbrowl]

35. OK, I see what you want to say, but I still don't get...

how you take a guy at MS saying he expects oil to hit $150/bl is holding a gun on you. You started out speculating that they were making fat money from this market analysis, but I'd like to pint out they're off 8% today.

[bluesbassman]

36. I just feel it's irresponsible to make statements like that.

In this volatile market, a company like MS, should be careful what type of message they convey. It appears to be a self fulfilling prophecy, thereby fueling additional speculation and creating the appearance of manipulating rather than "educating". As you're fully aware, oil is not something we can just "do without". Hopefully this crisis will spur additional emphasis on alternate energy sources, but we're not there yet. My objection is not to profit or free market, it's to obscene profits from the pockets of people who have no way to mitigate the cost.

As for the gun metaphor, I was just elaborating on the metaphor you started with "Don't shoot the messenger". :)

[madrchsod]

12. of course they are

obama and the democrats have them very worried....hard to buy off someone when they won`t take your money

[Muttocracy]

15. I caught part of Bernie Sanders on Tom Hartman (sp?) on the radio today

A caller called in to suggest to Sanders that Congress change legislation about speculation in oil markets - said he himself was making money speculating in oil, and it was ridiculous how little money down they can put to control big quantities of oil. Sound familiar?

[Celebration]

21. say guys

Nobody complained when the value of our houses went through the roof, remember? That didn't last forever and I bet oil won't keep going up forever either. This thing with oil is part speculation, and part fundamentals. I hope it stays high long enough to make it economical to develop solar and wind power affordably. If it starts tanking the economy too much then demand will go down.

One problem is the trend followers can now easily invest in oil through ETFs. Anyone with a brokerage account can have their own little hedge fund, and speculate on commodities without going directly into the futures markets. Oil is going to be very volatile.

[soothsayer]

39. Yep, oil will come down. Not back to the pre-Bush years, but back down

quite a bit.

[bluesmail]

22. manipulation and speculation and deregulation and Recommend

[OwnedByFerrets]

24. Did that ubiquitous bear

shit in those ever present woods??

[taught_me_patience]

31. Please cite some facts that oil should be $60

Oh wait... you probably pulled that out of your ass. However, if you feel so strongly about that price, then please buy oil puts and you can make a fortune.

[bluesbassman]

34. No, I pulled it out of this ass. lol

Straight from the horses mouth. If you can't trust a Saudi Oil Minister, I ask you, who can you trust? Now granted, this was a couple of months back, so the cost of producing oil could have doubled, but I kind of doubt it. So let me ask you, where is the $60 to $70 dollar mark up coming from?

Saudi Arabia's Oil Minister Ali al-Naimi said Monday oil prices are unlikely to fall below $60 per barrel, Bloomberg News reported Monday.

Ali al-Naimi, head of the nation with the world's largest oil reserves and highest oil exports, did not indicate whether OPEC was leaning toward maintaining current production quotas in the face of oil's most-recent price rise. Oil has increased about $15 in the past two weeks to more than $100 per barrel, as concerns about underperforming U.S. stocks due to the sluggish U.S. economy, and inflation fears, have prompted investors to pile into oil as an investment and as an inflation hedge. Oil closed Wednesday up 61 cents to $102.45 per barrel.

Last week, OPEC President and Algerian Oil Minister Chakib Khelil told reporters in Algiers that "we don't expect to put more oil in the market."

New oil floor: $60?

Al-Naimi told Bloomberg News yesterday that obtaining energy from harder-to-refine sources, such as tar sands and alternative fuels, costs about $60-70 per barrel "and, therefore, a line has been drawn below which the price cannot fall."
*snip*
http://www.bloggingstocks.com/2008/03/04/saudi-arabias-al-naimi-sees-permanent-60-oil-floor-price/

[Terry in Austin]

61. Sixty dollars!?

:rofl: Ha-ha-ha-ahh-ha-HA, ha-ha-hee-hee-hee-hee-oh-that's-rich :rofl: ho-ho-ho-HAH-HA-oh-my. *Sniff* *snick, snick*

Watch out, those exhaust fumes'll get ya! Either that, or you're smoking something mighty fine, in which case, can I have some?

Ooh, wait -- you're being ironic, right?
No, wait, wait -- I know -- can I have your ration tickets instead?

:rofl: sixty dollars...

[soothsayer]

40. Costs $50 a barrel to produce it on average.

[ThomWV]

63. Actually that number is a lot closer to $17

[Monk06]

42. The Saudi claim that well head costs are $60 should be viewed with suspicion.

Scuttlebutt has it that 40% of the volume from
the Ghawar field is water from recovery injection.

The big Saudi fields are in decline. By how much
no one knows because statics regarding Saudi reserves
and production capacity are a, get this, STATE SECRET.

Only the Bushes and the Saudi Royals know how much oil
their is left in the Saudi fields.

[ThomWV]

64. Marginal wellhead cost in Oklahoma in 2001 was $17/bbl

[Monk06]

65. In 2001 the wellhead cost for Saudi oil was $ 20 bbl so why the 300% increase?

We don't know because we have to take the Saudis
word for the size of their reserves and their
production costs.

The will not allow independent audits of their energy
capacity.

My take is that the $60 figure is smokescreen for
fundamental productivity problems with these old
fields

[soothsayer]

49. how about quarter after quarter of record profits by the oil companies despite decreased demand?

[1776Forever]

37. April report: U.S. units in Iraq pay $3.15/gallon for gas; total fuel cost is $153 million per month

# Iraqis only pay $1.36 per gallon because of government subsidies
# Some lawmakers say Iraq should spend some oil revenue on cost of war there
# Kuwait gives U.S.big discount on fuel; unlikely U.S. has asked Saudis for price break

http://www.cnn.com/2008/POLITICS/04/03/pentagon.gas.ap/index.html

This was back in April '08

[krkaufman]

41. I like the theory that banks and investment houses are manipulating oil & commodity prices ...

... in an effort to recoup (sub-prime) mortgage losses.

[soothsayer]

50. All of Wall Street is manipulated. Why should this be any different?

[Zynx]

53. I would not be astonished. It wouldn't be the first time they did something like that.

[nashville_brook]

43. that's the 140-dollar gorilla shitting in the middle of the room, isn't it?

[lonestarnot]

54. And he's one greedy, rude bastard!

[raccoon]

45. Yes. There is no oil shortage, just these asshole speculators are bidding the price

up and up and up, making megabucks, while the rank and file are getting screwed. As usual.

[unblock]

47. since when is a "shortage" necessary for prices to go up?

you don't need lines around the block for prices to go sky-high. it helps, but is hardly necessary.

[Terry in Austin]

60. Well, no, actually, there IS a shortage

Facts are your friends -- check 'em early and often!

It's about the rate of production vs. the rate of demand. Flat production and continued growth in demand create a shortfall, and that drives up prices. Relative to demand, there is in fact quite a shortage.

EIA stats show that production has been essentially flat since 2004. Meanwhile, demand has continued to grow at an average of 1.5% per year -- a total of 7% in the last four years.

Not that the speculators aren't still assholes...

[unblock]

46. oh for goodness sake! NO!

you didn't mention that the ecb just signaled that they would raise rates, putting a quick halt to the recent recovery of the dollar.

there are many reasons for oil prices to be high, and very few reasons for them to be low. note behind it all, that oil is extremely price-insensitive in the sense that, for the most part, people pay whatever they have to pay to get oil, especially in the short run. people complain to high hell about it, but they do little to actually consume less. they still need to operate the same plant, they still need to heat the same house, etc. so prices need to rise A LOT before demand cuts back just a little.

among the reasons oil prices are high because
- weak dollar
- stronger opec limiting production
- iraq war keeping iraqi oil offline
- emerging markets becoming more industrial (china/india)
- talks of war with iran
- other investments suck. where else to make money but in buying commodities?

there are speculators in every market, and you can find people talking oil up and others talking oil down. the bottom line is that oil prices will remain high because the shrubbies want it that way, all their friends are raking it in this way. once obama is in an the troops are out of iraq and iran isn't theatened and he doesn't hold hands with the saudis and he gets this country moving again and provides incentives to be more energy-efficient, we'll be in MUCH better shape.

[Zynx]

52. The dollar hasn't budged for months.

It has been in the same trading range of 1.55 to 1.59 to the Euro while oil has surged in an asymptotic advance. Commodities are but the latest manifestation of an ongoing chasing of the bubble from stocks in 1998-2000 to real estate in 2001-2006 to now commodities. Prices do not reflect reality at all. The demand growth in China and India is not THAT high, paticularly in the case of India. A 2% drop in demand here is bigger than a 20% increase there.

[unblock]

58. you're right about the bubble chase. that's my "other investments suck" point

there's been an excess of capital ever since "supply side" aka voodoo economics took root. too much capital leads to endless cycles of boom/bust as they overinvest in whatever's hot and that market gets hammered when it goes out of favor.

commodities are indeed the latest craze and that's certainly an element of the current price level. but if that's what people mean when they use the word "manipulation", then they either don't know what the word means or they're missing the real problem.

the solution, in any event, is not regulation of financial markets (that certainly has its merits, but bringing oil prices meaningfully likely isn't one of them) but sopping up that excess capital, with a combination of taxes on those with too much capital and/or increasing demand in areas that lead to the production of new, legitimate investments (green comes to mind).

[graywarrior]

51. Seems to me they're working hand in hand with the terrorists

You know, the ones who wanted to destroy America by bombing the financial towers? Far as I'm concerned, they are no better.

[roamer65]

55. The problem is that goddamn war in Iraq.

Every war brings price inflation along with it and this one is no exception.

[sarcasmo]

62. Kick and Nom for the truth.