Under probing questioning by Senator Cantwell, Exxon Mobil CEO Rex W. Tillerson admitted that oil should be $60-70 dollars a barrel based on supply and demand:
Some of the increase in price above this “supply and demand” level price is due to companies using futures contracts to lock in oil prices to ensure certainty (which is a valid business purpose).
Some of it is due to speculation. Indeed, using high frequency trading, it is relatively easy to manipulate the price of oil.
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Who is hoarding physical oil? No one. There is no one in the world with the market power or inclination to do so. If you don’t think the futures prices rationally reflect supply and demand, don’t buy futures – wait until you need your oil and then buy physical oil, which will be a market where you compete only with other end users. Contango reflects fear about the future availability of low-priced oil – it is not the job of oil companies or Congresspeople to prevent any fear from entering markets. In fact, a little more fear of possible future events might have kept a few more of our beloved airliens out of bankruptcy court and able to keep current on their obligations to workers and creditors. If we did see evidence of oil hoarding on the part of individual companies (none of them has the monopoly power to do so – BP would be happy to undercut Exxon to get some new business) or governments (maybe the Saudis, but the higher they run the price the more attractive capex looks to Canadian operators), the government would be well within its rights to lean on those hoarders via trade sanctions or anti-trust action. There is no evidence of such activity or proposal for such remedial action, and the Congresswoman is simply blathering to appear “tough on Big Oil”.
The government would be well within its rights to lean on those hoarders….until the appropriate campaign contributions were extracted….on which planet does your government correct things? I’d like to live there.
The discussion was about speculation in the futures markets. Not hoarding. By the way, hoarding is very possible. Just leave it in the ground.
We had the same pattern in early 2008. oil industry executives insisting that market prices were well above the level consistent with supply and demand (the Royal Dutch Shell chief said $60, the rest said $70 to $90) and the oil execs were proven right. Above ground storage is limited and per Dan Dicker (oil trader) not terribly attractive (oil is not as easily stored as market commentary might lead you to believe). I’ve had previous posts by petroleum engineers that oil well production can be cut back very readily without damaging the resource.
Well, that Royal Dutch/Shell chief should certainly know, as along with BP, Goldman Sachs, Morgan Stanley, and Deutsche Bank, they were the principal backers behind InterContinental Exchange (ICE), where the bulk of such wash trades took place to pump up the price of oil, energy and commodities (ICE Futures to be exact, and mostly between GS and Morgan Stanley).
But today, with all the debt speculation going on (latest bankster gambit, ELX Futures, and their aggressive use of Exchange of Future for Futures, also aggressively promoted on their behalf by the CFTC), it is now crafted for exacting ease of speculation by bouncing back and forth between the highest tier of speculation, debt speculation, and back down to the second tier of oil, energy and commodities speculation.
No one in the world can horde diamonds or gold or silver or metals from the Congo for your PDA to manipulate their prices. Nelson Bunker Hunt just wanted to make a lot of silver candlesticks for a friend’s 25th anniversary.
The issue, I believe, is market manipulation, not physical hording. Oil changes hands between two and three dozen times between the time it’s loaded aboard ship and the time it’s off-loaded at its destination. That’s not about competition for physical delivery. It’s about marginal price fluctuations.
I’d love to see even a few of those dozens of buyers forced to pay cash and take physical delivery, or even be required to put up a recognizable fraction of the purchase price as capital. Or impose a transactions tax that make raw speculation a tad more expensive. That seems fair, given the increased prices speculation imposes on millions.
Sigh, NC is becoming rife with libertarians and free market apologists :(
najdorf, nobody claimed oil hoarding was taking place, they claimed speculation was taking place – and it is. There is no excuse for the fact that so many people profit at the expense of the rest of the world.
My question is: How much speculation is funded with “credit” from the government enforced counterfeiting cartel, the banking system? So-called “credit” drives up the price of everything. Why would it not drive up the price of oil too?
And no, there is nothing libertarian about a government backed banking cartel using a government enforced monopoly money supply for private debts.
It all goes back to the money monopoly.
The government does not back Banking, Banking owns the government and those that own the Banking…cough global legacy bond holders, sprinkled with a few upstarts.
Skippy…seems…some want a free for all…why.
The government does not back Banking, Banking owns the government skippy
Oh, so the banks own government but do not use it to enforce their cartel? Really?
WOW Beard did you not get the memo, I mean history’s presidents and social leaders warning us, endless wars over resources and credit, establishment of the FED, Paulson’s give me a trillion+ gun to your head, etc.
We lost our government to a few industrialist and creditors a long time ago. If you really had a government of the people (one vote thingy) vs. vaults full of fiat vote, open and fair debate (no such animal, think tanks, industry packed megaphones, et al), people might just get informed and make these so called rational decisions.
Beard said “but do not use it to enforce their cartel”…
Um try TARP, ZIRP, TALF, POMO and the rest of the alphabet soup extraction of here and tomorrows toil.
Skippy…you live in the biggest and most powerful plantation ever, abate free roaming. Personally it would be interesting to see the illusion removed, the small government so many want.
I agree the banks own the government since you missed my sarcasm. And the banks use their pet government to enforce their cartel and to bail it out.
So my point remains. We have a government backed and enforced money monopoly for private debts.
Personally it would be interesting to see the illusion removed, the small government so many want. Skippy
Government cannot and should not shrink overnight but one thing that must go immediately is its backing of banking. The need for government would then “wither away”.
No the entity’s that own the banks own / leverage the government[s.
Skippy…constantly providing misinformation via syntax, feature or bug…ummmm.
Skippy…seems…some want a free for all skippy
Not quite. The government would still have (as it must for ethical reasons) a legal monopoly on government money.
…why. skippy
An honest society is needed before we can have a truly great society.
Beard said…”truly great society”
Yeah mate…history is chockerblock with that little phrase.
Skippy…Think you need to look the definition of great and its historical application, *Greatness* in a hungry beast, eater of all in its path, destroyer of worlds stuff.
No the entity’s that own the banks own / leverage the government[s. skippy
I’m not arguing over who owns the government, just that it is used to enforce and back the banking cartel. That has to stop.
Skippy…constantly providing misinformation via syntax, feature or bug…ummmm. skippy
Don’t be so hard on yourself.
Well then stop trotting out the government meme all the time. Try going after the real culprits, naw you won’t, its not what you want. IMO give unto Cesar and all the rest is your kingdom in heaven, what else do ya want, don’t break your own rules.
Skippy…your syntax, as if you didn’t know. BTW never address any other point[s, that’s a tell in its self, just endless repetition of get the government (loop in your head).
Well then stop trotting out the government meme all the time. Skippy
My complaint is that government is being misused for private interests, the banks. That is fascism.
Do you have a problem with that message?
BTW never address any other point[s, that’s a tell in its self, just endless repetition of get the government (loop in your head). Skippy
That’s not true. I advocate a complete and ethically consistent solution to the money problem from a universal bailout of the US population to genuine reform in money creation which btw would almost certainly destroy banking as we know it.
Do you have a problem with those messages?
Try going after the real culprits, naw you won’t, its not what you want. Skippy
LOL! The real culprits are every single banker in the US and every credit union member too.
Are the prisons big enough?
Beard said…”Do you have a problem with those messages?”
If you must ask that, I fear for your cognitive ability.
I have stated before, as a prerequisite, the laws on the books as of today…be enforced. The witch hunts can start after rule of law is reestablished, public trust re-kindled. The structure of *this* democratic republic can be addressed once its laws and trust is reestablished ie: corporate personhood revoked, only citizens vote, non sovereign collectives should not have any *influence* in the voting process (they may petition our government, enough with the jobs prisoner’s dilemma).
Skippy…rule of law is your problem not currency, people have and always have traded out side established currency’s, only sovereigns should issue it (its is the key to power, you would have corporations issuing it, see history examples of that out come. Every one wants freedom, but, the first thing they do is run to some ideological head, golden calf thingy…sigh…there all golden calf’s…get it…Randian, GodHDs, Marxism, Socialism, etc. How about shelving the absolutes and get on with living on this planet with out killing it, finding the answers as they come…eh. Or are you in the mental razor wire crown business, people on sticks, ideology’s greatest test, edited on deaths steps, its always just around the corner eh…rapture!
PS. other points of issue ie. cult / occult and the delivery of your messages in the form of cultist syntax. BTW observed Naming Gd-parent ritual at small elitist building in the right part of town thingy recently. The head occultist extracted a verbal contract of following footsteps thingy and rejections of all past, present and future dealing_in the_occult….ROFLMAO
I have stated before, as a prerequisite, the laws on the books as of today…be enforced. Skippy
LOL!
As far as law is concerned, you guys gave away the store in 1913 at the latest when you approved the government backed counterfeiting cartel headed by the Fed.
Ever since then you’ve struggled to regulate a fundamentally dishonest money system.
It was…stolen…not *given* away.
Skippy…once again you conflāre (biopic) the two, bug or feature…ummm.
The Rule of Law supersedes all other mechanisms of the State, the creation / issue of currency, is an *Act of Law*….sheez.
Skippy…thanks for clarifying your position, GDhead inspired strategy, which has had 2,000+ years of data fail, with in a sovereign nation, which separates religion and state. I can see the state you pine for, printing press in the church basement all ready to go…lol.
“Speculating” is just defending yourself from the Federal Reserve’s debasement of the dollar.
I have Pimco’s commodity fund in my 401(k). Whose fault is the price of oil, mine or Ben Bernanke’s?
Why should oil be cheaper?
So Americans can waste faster?
So Americans can live farther away from anywhere and drive longer distances in ever- larger carz?
So Americans can eat more junk food?
So Americans can create more pollution?
So American business can climb higher and fall that much harder?
So more Americans can have their 15 minutes of fame?
So Americans can watch more television and ‘react positively’ to advertising?
To make criminal class of politicians look good?
So what remains of the US resource base is ruined more completely?
So the human race goes extinct a bit faster?
I can spend a lot of useful electrons explaining such concepts as ‘OPEC’ and ‘cartels’ and ‘peak oil’ to whomever but it is not worth the effort. It is so much easier to blame speculators, instead.
And take the word of a fucking oil company executive into the bargain. Good grief!
Oil company executives benefit from higher prices. So why should he say prices ought to be lower? What I have read suggests that even a price as high as $120 is not high enough to induce conservation or a shift in investment in alternative energy based on economic considerations.
Much thanks for addressing the obvious point of logic.
Giving more money to the bank/oil cartel simply makes them that much more powerful, while doing nothing to accomplish a shift towards sustainability and lowered pollution.
As long as the transnational capitalist class can call all the shots, we will be forever screwed.
“Off with their heads” is far more applicable today than at any time in history!
That’s real interesting, CERA/IHS estimate that a marginal cost of a new barrel of supply from the GOM is $80-90 and Continental Resources, a big player in the Bakken state that a marginal barrel is $65….
If you look at the Net Exports of the 30 largest exporters you will see that they are down ~10% since 2005. At the time, Brent was about $40, using the DXY and the IMF oil price inelasticity, one gets Brent at $105-$115…
Yeah, oil at $60 and “smoking is good for you”… same class of CEOs and same type of lies…
I’ve convinced myself not to get mad about high oil prices anymore, irregardless of who’s doing it.
The way I do it is to visualize big SUV and truck drivers filling up their gas tanks for $100 every week. Then I try convince myself that someday they will get mad enough to drive the gas guzzling behemoth to the Great Big Metal Compactor at the junkyard, and a large part of our problem is solved.
Not a particularly smart or efficient way to do things, but it may actually sort of “work”. I just hope that it happens soon enough, before the buck goes all the way to zero.
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due to companies using futures contracts to lock in oil prices to ensure certainty (which is a valid business purpose).
Some of it is due to speculation
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Never before has so much been said about so many perspectives by so many bloggers and common ‘taters to be read by so few readers. But soft, Vicious Cynics! What we now write will quickly be accepted as the classics of blogging from the golden era of literature, the golden era of literature when blogging could be carried out in a cyberspace that would not compromise the security of your operating system, would not reveal your inner wishes to the homeland security office of water-board enforcement, and would not chew up all the cookies from your brokerage account. Yes, bloggers, it is truly a time when men are men, women are women and most of those women have two of X-chromosomes inside nucleus. Or at least a healthy percentage of women. Ah! What a great time it is to rant.
Enjoy
!
If an oil exec tells you that oil should be trading at $60-70/bbl, that gives you a clue that the real trading range should be in the $40-45 range, which is what I have been saying for the last few years.
The futures market is a couple of orders of magnitude larger than the physical market so it dominates price. All those “paper” barrels are just rolled over each month. Margin in oil futures markets being low there is large built in leverage.
The spot market follows the futures market so it is not clear what the point of hoarding crude would be, and storage would be an added cost. On the other hand, there may be some hoarding to influence price in some market segments say like heating oil.
An Exxon VIP is not going to come out and say “oil should be $110/barrel based on Bernanke’s printing and government’s failure to tax and rein in deficit spending”. That will damage their brand.
Further, US oil companies import a heck of a lot of oil from areas where their political control is not absolute. They probably do not want oil to rise in price too quickly/dramatically because (a) they hold a small percentage of overall reserves and (b) their reserves and profits are subject to expropriation and taxation.
bloggers on the koch bros. payroll have weighed in
how about asking your employer to release the tankers?
or if you leave your cubicle will you loose your bowl of gruel for lunch??
from the exiled 4/15/11
Last week, I wrote that Kochs Industries’ recent fight against financial regulation and aggressive defense of unregulated derivatives via the “Enron Loophole” was a clear sign that the company was using its position as a large-scale marketer of oil and other energy commodities to manipulate prices.
Well, thanks to recent reporting by Lee Fang, we now know this for a fact. Traders working for Koch Industries not only gave PowerPoint presentations outlining their plans to drive up the price of oil, but openly boasted about gaming the market in the business press.
Come “contango” with the Kochs. It only costs $1 more per gallon…
Their methods weren’t that different from the ones used by Enron to boost the price of electricity: instead of shutting down power plants, Koch Industries siphons millions of gallons of oil into storage tanks. ThinkProgress’ Lee Fang writes:
In 2008, Koch called attention to itself for “contango” oil market manipulation. A commodity market is said to be in contango when future prices are expected to rise, that is, when demand is expected to outstrip supply. Big banks and companies like Koch employ a contango strategy by buying up oil and storing it in massive containers both on land and offshore to lock in the oil for sale later at a set price. In December of 2008, Koch leased “four supertankers to hold oil in the U.S. Gulf Coast to take advantage of rising prices in the months ahead.” Writing about Koch’s contango efforts to artificially drive down supply, Fortune magazine writer Jon Birger noted they could be raising “gasoline prices by anywhere from 20 to 40 cents a gallon” at the time. Speaking with the Business Times, Koch executive David Chang even boasted that falling crude prices in 2008 provided an opportunity remove oil from the market for future delivery:
CHANG: The drop in crude oil prices from more than US$145 per barrel in July 2008 to less than US$35 per barrel in December 2008 has presented opportunities for companies such as ours. In the physical business, purchases of crude oil from producers and storing offshore in tankers allow us to benefit from the contango market where crude prices are higher for future delivery than for prompt delivery.
Yep, I guess all the speculatory fraud apologists at Cato are totally right. There’s nothing evil or sinister about billionaires who physically hoard oil supplies to drive up prices. No sir, nothing wrong with it. It’s all a necessary part of the new market economy, where speculators, billionaires, small farmers, young professionals and nice old pensioners all come together in harmony to find prosperity and happiness. Sure, commodities might come with a built-in billionaire tax. But so what? We can’t expect a free capitalistic society to be free. It costs an extra buck or two per gallon.
Here’s one more bit from Fang’s piece:
In recent weeks, gas prices around the country have surged to levels unseen since the 2008 oil spike. However, market fundamentals are not driving the nearly $4.00/gallon gas prices. In fact, under the Obama administration, oil production is at record highs and there is adequate global supply of crude. As Commodity Futures Trading Commission (CFTC) commissioner Bart Chilton has explained, rampant oil speculation, which is at its highest level on record right now, is to blame for current prices.
To put it another way: Forget what you learned about supply and demand. Everyone agrees the oil market is more rigged than a truckstop slot machine.
“What? Is the price of oil going up because of scarcity? Ah…Yeah, sure thing. That, and because of green shoots economic recovery! Haaaaaaaaahaa!”
This is why I’ve always been skeptical of the peak oil crowd. Their constant hysteria and focus on dwindling oil supplies—which they say will be tapped out very soon, plunging us into a post-apocalyptic world filled with roving bands of cannibals, dirty midgets, a gold-based economy, dehydrated veggies and Thunderdome entertainment—works only to the benefit of market manipulators like the Kochs. It helps reinforce in the popular mind the idea that today’s astronomical oil prices are somehow linked to scarcity and dwindling world oil reserves–which of course they are not.
Try searching the Internet for information on the oil market. Peak oil theories will be on 7 out of 10 pages you’ll hit.
If you buy into peak oil, then you want to move into alternatives as fast as possible.
Oil reserves and market gaming are different data point signals…sigh.
The harm oil or all fossil fuels represent in a dust to dust argument, as an on going accumulative effect is the elephant in the room (not my life time yepiee!, stuff you future!).
Skippy…oh yeah…forgot that drilling thousands of feet down to the ocean floor-is_representative of plentiful oil. Wars in the middle east, subjugation of indigenous populations for hundreds of years, political misanthrope et al, yeah its all good!
If you don’t believe in “Peak Oil,” you must believe that oil supplies will keep going up forever. All “Peak Oil” means is that at some point supply has to come down. You can acknowledge the inevitability of a peak in global supply without buying into any apolcalyptic hype.
Peak Oilers long predicted severe swings in oil price at or near peak.
Puuuhhllease, brian, I got sooo tired of this endless “Enron Loophole” — the entire legislation was a giant loophole of loopholes, so too that Dodd-Frank crapola.
For your benefit, and anyone else’s — the timeline below is what allows for ultra-leveraged speculation.
Thank you.
The Devil’s Timeline
1993: The Group of Thirty confers with JP Morgan and several other banks on policies as regards credit derivatives. The G30 then distributes a favorable report on the expanded adoption of credit derivatives but with the caveat that “legal risk” should be removed. (Please recall this was after the S&L debacle, when slightly over 1,000 banksters were convicted and jailed.)
1994: Next, a group is formed of the major Wall Street investment firms: Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Bros., Salomon Bros., Credit Suisse FB, called the Derivatives Policy Group, which will begin to lobby congress.
1996: After conferring with the Group of Thirty, JPMorgan Chase issues the report, Glass-Steagall: Overdue for repeal, which is distributed to members of congress.
1999: After several failed attempts, the Gramm-Leach-Bliley Financial Services Modernization Act is finally signed into law. This effectively repeals Glass-Steagall, and allows for the establishment of financial ultra-monopolies (although it is a bit after the fact, given Citigroup’s merger with Travellers).
2000: The Commodity Futures Modernization Act is signed into law, killing oversight and financial anti-fraud potential which allows for ultra-leveraging by financial ultra-monopolies.
(Taken together, the Gramm-Leach-Bliley Act and the Commodity Futures Modernization Act removes all “legal risk” in response to the Group of Thirty’s dictate.)
Of course, the usual congressional yard sale occurs, as detailed within the excellent report below:
http://www.wallstreetwatch.org/reports/sold_out.pdf
Notes:
The Group of Thirty (G30) was created and originally financed by a Rockefeller Foundation initiative in 1978. It is composed of the top international financiers and members of the world’s central banks.
On JPMorgan Chase and their credit derivatives: Gillian Tett’s Fool’s Gold is a superb example of a Wall Street-financed (and pre-financed) misinformation trope ostensibly explaining how, although JPM was responsible for a variety of CDO constructions and the credit default swap, it wisely stepped away from the precipice and avoided all risk.
Of course, this is pure fiction and complete nonsense. Otherwise, JPMorgan Chase wouldn’t be the leader of the pack with regard to credit derivatives, allowing for the bulk of its profits and ability to control markets. Goldman Sachs averages a nifty $80 billion a year in profit from credit default swaps activity.
This isn’t as disturbing as last year when Goldman Sachs (?) was caught red handed speculating in wheat and or corn. The BBC was pretty horrified that food was skyrocketing in third world countries because some dork was bidding up the price. Was it Lloyd?
Krasting posted an interesting article at Zero Hedge about how transaction volume in many commodities are running at at least 5X what the annual global consumption rate is for any of them.
He askes the obvious question “Wafo?”
Didn’t come up with any good reason.
http://www.zerohedge.com/article/blame-fed-commodity-speculation
peak oil is just we consume oil from unstable nations and oceans with little regulations… increased risk and volatility for energy is becoming normal look around dude
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if you dont got oil you got problems… if you got oil you got problems
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peak oil will remain a fulcrum of global change
It’s called negative real interest rates. I get into arguments with progressives all the time, and they never blame good ol Bernanke or Greenspan. Even Larry Summers wrote a paper about this…….how people park their money commodities and precious metals if there are negative real interest rates. If you print monopoly money like the Bernank….it’ll take more dollars to buy up the commodity.
The notion that Tillerson “admitted” anything is just odd. He was saying that he thought the cost of the marginal barrel was $60-70/b. ExxonMobil isn’t a major speculator in the oil futures markets, and though it profits from high oil prices, it also knows well the political–and economic–problems that come from them.
More, the notion that it was probing questioning is odd. She was making political points and clearly didn’t have a strong understanding of the commodities markets to begin with … something that anyone called in to testify can safely count on it seems.
And for those still somewhat mystified as to the goal of the Dodd-Frank Act, please see below. (This allows for the continuation of ultra-leveraged speculation.)
Thank you.
Dodd–Frank Wall Street Reform and Consumer Protection Act
The short and concise breakdown is below, but the major two points, relatively easy to overlook among all the loopholes, are (1) shifting the legal focus and culpability from the banks to the clearinghouse (ICE US Trust), which this legislation makes officially “legal” to be bailed out by the Federal Reserve (no further need to approach congress on this item, and further socializing of the debt); and, (2) allowing banks to shift their proprietary trading to subsidiaries (really a simple paperwork change, nothing physical nor logistic in nature need be undertaken). This second change has been obvious given the continuous proprietary trading by the banks, contrary to what crooked politicians may have claimed!
This legislation, at the macro level, effectively shifts the credit default swaps conduit from AIG to the clearinghouse, which can then be smoothly, and now legally, bailed out at the appropriate time.
BREAKDOWN:
Three loopholes exempt 40 – 45% of all derivatives from clearing.
One loophole effectively has the potential to exempt 100% of all OTC derivatives.
One loophole allows for increasing the spread of securitizations and credit derivatives among S&Ls.
That proprietary trading subsidiary loophole previously mentioned.
And that nuclear loophole, allowing for clearinghouses to be bailed out by the Federal Reserve.
Of course, the logical next question is who owns the primary clearinghouse for credit default swaps (CDS)?
The bank/oil cartel, of course!
ICE US Trust was established as the clearinghouse for CDSes some time back. It is financed and owned by the InterContinental Exchange (ICE), Goldman Sachs, Morgan Stanley, UBS AG, and the Markit Group.
Obvious next question, who owns the InterContinental Exchange?
ICE was financed and owned by Goldman Sachs, Morgan Stanley, Deutsche Bank, BP and Royal Dutch/Shell.
The Markit Group (derivatives pricing firm) was originally founded and financed by JPMorgan Chase, Goldman Sachs, Citigroup and Bank of America, and is now supposedly an independent entity with no financial linkage to its founders (wanna bet?????).
And who controls over 90% of the credit derivatives? JPMorgan Chase, Goldman Sachs, Morgan Stanley, Citigroup and Bank of America, naturally; the usual suspects.
this is not too far off from sgt-doom analysis ….. hang with me on the set-up to punch line.
Used to think Ron Paul was a crackpot/flake. But after credit crisis of 2008 and most predicted crash (since as early as 2006 seriously) lost ALL confidence in our Goldman Sachs led elites … they broadly caused this and have done so since really foundiong of Federal Reserve. To me you could have achieved modernizatinon/ reform with repeal of strict Glass-Steagle if you acknolwdeged the simple fact of conflicts of interest of financial risk inherent in investment banking (and increasingly leveraged prop trading internally and to support large clients) versus just commercial bank depositary services & lending of same deposits. Segregate, capitalize & monitor (regulate is a joke to anyone who has been on the other side of the keystone cops regulators who always are way too slow. sometimes corrupt/envious and need education by which time the fast crowd has already moved on) for the different functions ….. that totally broke down in the 1990s.
Next, the larger backdrop problem is the Federal Reserve. While I may not agree with Ron Paul to totally abolish the Federal Reserve .. he & many others are correct in that the FR causes more, if not as many, problems as it ‘solves’. Any true objective assessment since 1913 illustrates this. No one remembers that post-WW1 Amerika had a monstrous inflation problem due to deficits for war but excessive liquidity of brand new scared FedReserve. Sec’y Treasury Mellon (politically demonized by FDR Admin and supposed ‘great’ future Supreme Court Justice Rbt Jackson who prosecuted Mellon for totally blatant fake tax evasion charges for gross partisan debasement … just another Eric Holder/Jamie Gorelick political legal hack really it turns out) had to overcome the Fed Reserve idiocy to build solid econ footing for 1920s — which JFK subsequently emulated through early 1960s analysis of Canuck economist Rbt Mundell).
Point: Federal Reserve has to be seriously modernized/reformed so that Wall Street stops totally controlling the econ development of the USA to its terms, needs, conflicts of interest versus Main Street and taxpayers. The FEd Reseve is not run for the overall US economy, its primary function is too save Wall Street from its incessant risk taking and pusing the limit. First reduce the power of the NY FEd substantially (Goldman Sachs and JPMorgan Chase have essentially run it for last 25 years). There is so much power, influence & money in the nexus of FedRserve, Wall Street and Washington DC that No One can take it on properly. And Warren Buffet is really Wall Street not Main Street.
So you cannot address the many things that need addressing until the power of self-dealing & conflcit-of-interest & eternal gov’t tax payer funded backstop for Wall Street is taken out of the FedReserce as presently constituted. This is where I tend to agree with Johnson’s 13 Bankers and crony capitalism … but that has a naive academic bent to it that missses the reality of what is really going on.
It’s not academic naivete, I’m afraid, but it may be you missing the obvious connections.
Johnson is presently at stooge at the Peterson Institute (Peter G. Peterson, and David Rockefeller), along with his position at MIT, and former position as chief economist shaman at the IMF.
Johnson is squawking the official Wall Streeter line, which is what he’s paid to do.
Not crony capitalism, but crony corruption of the highest order.
Simon Johnson is one of the usual fraudsters.
If it’s easy to maniupulate the price of oil, i.e. if someone could do so reliably, then anyone with such capabilities could make an unlimited amount of money. The caveat to your claim that is easy to manipulate the price of oil, or any asset, is that you must be willing to pay (i.e. lose money) to do so.