Category Archives: Commodities

Satyajit Das: L’Age d’Or, Part 1 – “A Barbarous Relic”

By Satyajit Das, derivatives expert and the author of Extreme Money: The Masters of the Universe and the Cult of Risk (2011)

In Germany, gold is now available from vending machines in airports and railway stations – Gold to Go. Shoppers can buy a 1 gram wafer of gold or a larger 10g bar. Seeking safety for their savings, individuals have purchased 150 tonnes of gold, mainly in the form of coins. Investors poured money into special funds (known as exchange traded funds (“ETFs”)) which pool investor monies to buy over 1,000 tones of gold.

The Sucking Sound of (At Least Some) Skilled Workers Leaving the US

Defenders of the Obama Administration’s indifference to high levels of unemployment often claim the problem isn’t readily remedied because the US suffers from “structural unemployment”. That’s really wonkese for blaming the victim. No sirreebob, the problem isn’t that there aren’t enough jobs, but that the workers are no damned good, as in they don’t have the right skills for our new super duper information based economy! In mainstream media outlets, claims like this are usually followed by a business owner saying there clearly aren’t enough skilled employees, he can’t hire any good machinists for $13 an hour. Generally speaking, Mr. Complaining Boss is offering below the going rate, but why let pesky details spoil a good narrative?

You don’t have to look hard to find evidence against this argument.

Shale Gas Will be the Next Bubble to Pop

By James Stafford, publisher of OilPrice. Cross posted from OilPrice.

To help us to look past the hype and take a critical look at whether shale really is the golden goose many believe it to be or just another over-hyped bubble that is about to pop, we were fortunate to speak with energy expert Arthur Berman.

In the interview Arthur talks about:

• Why shale gas will be the next bubble to pop
• Why Japan can’t afford to abandon nuclear power
• Why the United States shouldn’t turn its back on Canada’s tar sands
• Why renewables won’t make a meaningful impact for many years
• Why the shale boom will not have a big impact on foreign policy
• Why Romney and Obama know next to nothing about fossil fuel energy

The Myth of Affordable Energy — Interview with Ed Dolan

In the interview Ed talks about the following:

• Why cheap energy is not vital to economic growth
• Why high oil prices aren’t necessarily a bad thing
• Why the U.S. Oil and gas boom is hurting Russia’s global influence
• Why Obama’s desire to cut oil industry tax breaks could be a great idea
• Why energy policy needs to be completely reformed
• Why Russia’s Arctic Exploration could cause the worst environmental disaster to date
• Why renewable energy investors should be very worried about the Natural gas boom
• Why the EU was flawed from the start
• Why subsidies for renewables are just plain wrong.
• Why we should give QE3 a chance
• Why abundant natural resources can bring a curse of riches

Is War with Iran Inevitable?

In light of the reader interest in the post yesterday on the impact of sanctions on Iran’s strategic options, this Real News Network interview provides a useful, if sobering, follow on.

Ironically, Sanctions Success Strengthens Iran’s Strait of Hormuz Trump Card

Military strategists appear to have missed a foreseeable outcome in their efforts to pressure Iran.

How Coal Brought Us Democracy, and Oil Ended It: Lessons from the New Book “Carbon Democracy”

Matt Stoller is a fellow at the Roosevelt Institute. You can follow him at http://www.twitter.com/matthewstoller

Long before politicians mewled helplessly about the power of “Big Oil”, carbon-based fuels were shaping our very political, legal, intellectual, and physical structures.

Chris Cook: Libor and Oil Market Manipulation – Rage Against the Dying of the Light

By Chris Cook, former compliance and market supervision director of the International Petroleum Exchange

A generation of markets is dying and the era of the Middleman is coming to an end. The ‘Bezzle’ – as J K Galbraith described financial misbehaviour in a boom, revealed by a bust – is now coming to light.

Another MF Global? Customer Accounts Frozen at Futures Broker PFGBest (Updated)

Another blow to what credibility is left in the futures brokerage business in the US may have come in the form of the failure of midsized commodities and foreign exchange broker PFGBest, which claimed to have roughly $400 million in customer assets. Although details are sketchy, the firm was may have been falsifying bank records; the founder of the firm tried but failed to kill himself.

Customer accounts were put on hold today and the firm is being liquidated. Per the Wall Street Journal (hat tip Deontos):

Oil Regulators Wimp Out on Requiring More Transparency

A Wall Street Journal article tonight (hat tip Joe Costello) has the whiff of disinformation about it. It dutifully reports that oil regulators have retreated in a serious way from requiring more disclosure of oil market transaction. The article never offers an explanation for the change in stance and focuses attention on actors who are highly unlikely to be the moving force.

Wolf Richter: Manna for Bankrupt Cyprus

In Greece’s chaotic wake bobs the listing Republic of Cyprus, soon to be the fifth Eurozone country, out of seventeen, to get a bailout. By June 30. Only last year’s €2.5 billion loan from Russia has kept it afloat. It’s economy is shrinking, unemployment is at a record, and real estate is collapsing after a phenomenal bubble and a nationwide title-deed scandal that has taken down the banks. But Cyprus has something—and it’s huge—that no other troubled Eurozone country has.

The Real Bombshell in the MF Global Post Mortem

The report that John Giddens, the bankruptcy trustee in MF Global, released Monday is thorough and confirms many of the observations made in journalistic accounts of the firm’s collapse, particularly regarding inadequate risk and accounting controls, JP Morgan’s aggressive posture greatly increasing the liquidity squeeze. But a stunning revelation that comes early in the account and is central to the failure of the firm does not get the emphasis that it warrants.

Finance as Wealth Transfer Mechanism: An Interview with James Galbraith

James Kenneth Galbraith is currently a professor at the Lyndon B. Johnson School of Public Affairs and at the Department of Government, University of Texas at Austin. He is also a Senior Scholar with the Levy Economics Institute of Bard College. His latest book is ‘Inequality and Instability: A Study of the World Economy Just Before the Great Crisis’ (also available on Kindle).

Interview conducted by Philip Pilkington.

Philip Pilkington: Let’s start with the obvious question that the book raises. Namely, why studies on inequality have, until this point, been so poor. You point out in the book that the studies that have been done have been competently researched but that they simply don’t have access to the correct types of data etc. Could you talk a little about this (without getting too technical, of course) and maybe speculate a little about why this important issue has been sidetracked by the economic profession?