60 Minutes: Oil Prices Manipulated

Because a lot of people read SportsJournalists.com specifically for Ragu's investment tips.

 

Read the story again. It wasn't just Morgan Stanley. Major Wall Street investment banks and hedge funds created investment inflows that affected (manipulated) the futures market.

Proof? You want proof? Well, the system was fixed so we'll never be able to prove it. How convenient!

If you can't prove it, it didn't happen. (/ragu)

 

This goes back to the argument I was having with Ragu at the time.
Speculation -- people investing wildly in the hopes of making big profit also had a huge effect on the real estate bubble. The prices of real estate in certain markets, like Miami and Vegas, were going wild and far in excess of the actual demand of people to live in homes in those particular areas. People were buying properties, never even putting a stick of furniture inside, then flipping them to other people who weren't all that interested in living there, either.
Same as with the dot-com stocks in the late 90s. People were putting money in those stocks that had no idea, even, what the companies produced or serviced. They just saw that they were going up. And as more clamored to buy, the prices went higher.
Once again, though, that is not market manipulation. That is a speculative bubble. And when the bubble pops, a lot of people get hurt. It is not illegal, though. If you want to regulate the markets more closely, then you can. But they weren't.
Pumping a stock or investment class is not market manipulation. The job of Wall Street analysts is to tell people what will and what will not make money. Sometimes they do it well, sometimes they don't. And sometimes they do it nefariously -- as in, our firm will make more money if people buy oil futures. Again, though, depending on how the firms are structured that need not be illegal.
When someone produces evidence that there was serious market manipulation going on, then fine. It hasn't even begun to happen yet.

 

You see, if markets can be manipulated, then there is some evidence that economics is not really a science, like predicting the weather, and that The Market is not an impersonal force like hurricanes. And, if markets can be manipulated, then there might be some reason for government to regulate them so that people are not cheated and so that political and economic oligarchy does not rise to damage the nation.
Therefore, markets cannot be manipulated.
QED.

 

One thing that 60 minutes did not touch upon was the repeal of The Enron Loophole - signed into law December 2000 and repealed effective 9/30/2008 - The loophole basically opened the door to unregulated speculative trading by banks and investment houses to levels previous unhallowed.

When Enron came apart the traders branched out to other firms and did the same things they were doing to manipulate the electric utility market.

 

Well, then, isn't that even more of an indictment of an unregulated free market? Demonstrating how wildly askew it can go even without illegal manipulation. Hell, the manipulation claim at least provides an excuse.

 

Of course, The political push for the Enron Loophole had nothing to do with manipulation because, as we know, markets cannot be manipulated.

 

Yep, and I immediately thought've your posts when I saw that, that's where I learned about that loophole. I'm guessin you were cackling while watching that piece, Boom, the way it parroted and confirmed all your points when you were arguing with Ragu a few months ago.

 

I'd like to see how many funds MS and others handled can be traced to Al Queda and bin Laden. It was HE who said that he would help drive oil prices to $140 per barrel, then America's economy would be finished. May not be finished, but it's staggered.