Category Archives: Commodities

Are Banks About to Win on Commodities Trading After Their Success in Watering Down Basel III Capital Rules?

You know it’s bad when Bloomberg’s editors attack the banks’ win against regulators, in this case, their success in watering down already-too-generous Basel III capital requirements. And they look primed to score a twofer on pending rulemaking on trading in physical commodities.


Michael Klare: Have the Obits for Peak Oil Come Too Soon?

Among the big energy stories of 2013, “peak oil” — the once-popular notion that worldwide oil production would soon reach a maximum level and begin an irreversible decline — was thoroughly discredited.  The explosive development of shale oil and other unconventional fuels in the United States helped put it in its grave.

But this assessment may be premature.


CFTC’s Bart Chilton Takes it to the (Position) Limits One More Time

Yves here. This post is important not simply because it describes where the fight over position limits stands and why it’s important, but it also gives some insight into regulator processes. It makes clear how even as few as two well placed officials, Bart Chilton and Gary Gensler, did a great deal to hold the line against predatory large financial firms. It also shows how hard regulators have to fight to do their job.


Egypt Marches to a Saudi Drummer

Yves here. This may seem a bit wide of our usual finance and economics beat, but the Middle East continues to be a potential flashpoint, as well as the most visible sphere of jockeying for geopolitical influence.

This piece caught my attention because it gives a plausible and in-depth assessment of Saudi policy in the Middle East, now that it is in the process of divorcing itself from the US. In particular, it also in passing addresses a question that flummoxed Moon of Alabama: why did the Saudis reject what would normally be a prized seat on the UN Security Council?


Fed Gives Middle Finger to Congress, Commodities Customers, and Public, Proposes to Allow More Banks to Participate in Commodities Business

Nothing like watching a captured regulator like the Fed use a public hue and cry to execute a big bait and switch. Here the ploy is to change rules to further disadvantage the parties making complaints. But it takes finesse to make the finger in the eye look plausible and reasonable, so that when the well-understood bad effects show up later, the perp can pretend to be mystified.


Michael Klare: Fossil Fuel Euphoria, Hallelujah, Oil and Gas Forever!

For years, energy analysts had been anticipating an imminent decline in global oil supplies.  Suddenly, they’re singing a new song: Fossil fuels growing scarce?  Don’t even think about it! The news couldn’t be better: fossil fuels will become ever more abundant.

This movement from gloom about our energy future to what can only be called fossil-fuel euphoria may prove to be the hallmark of our peculiar moment.


David Dayen: Arm-Twisting Season in Washington Before Syria Strike Vote

By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen Sure, this is an economics blog, but the story of the week is unquestionably the imminent Congressional vote on authorization for so-called “limited” military strikes on Syria. And there are a variety of significant economic […]


Has the Shale Bubble Already Burst?

Just like the famous Gold Rushes of the 19th century, US shale gas development is turning out to be a limited and regional market opportunity. Across the Atlantic, the high financial and human costs to fracking also mean that Europe should forget any fantasies about repeating the US shale boom.

Many US shale companies that have been beating the drums of shale “revolution” are now facing oil and gas well depletion. In February 2013 the US Energy Information Administration (EIA) warned that “diminishing returns to scale and the depletion of high productivity sweet spots are expected to eventually slow the rate of growth in tight oil production”. It was a cautious but intriguing statement.


Obama’s Own Party Wages War on Energy Plans

Yves here. Since I watch energy and environment stories only from time to time, I’m not certain of the significance of pushback by some in the Democratic party against Obama’s deliberately mislabeled “clean energy” plans, which translate roughly as “all fracking all the time”. Is it that Obama is moving a tad early into lame duck status? Is it that Democratic party Congresscritters learned from 2010, in which the Blue Dog Democrats who were aligned with Obama took big losses, and the bona fide progressives did well?