How do these cockroaches get away with it?

Question

Speculators driving up the markets for their own gain, much like Enron. How many publicly tied to stakes and flogged do you suppose it would take to teach them a lesson?

Goldman Sachs, the most active investment bank in energy markets and one of the first to point to triple-digit oil more than two years ago -- a once unthinkable level -- said last month oil could shoot up to $200 within the next two years as part of a "super spike."

Answer 1

I'm sorry, but you are throwing out some "headlines" here that don't support your point (what is your point by the way?)

Enron - had nothing to do with speculation.  Management was using accounting tricks to hide the true results of their business.  Eventually it collapsed and the employees / investors all lost their shirts.

GS - so?  GS research pointed to oil becoming much more expensive.  Are you insinuating that GS said "$200" after they had placed their bets in that direction hoping it would actually CAUSE oil to rise?

There might be a bubble in the price of oil right now, but it is solely the role of politicians to chalk that up to "speculators".  There are definite supply / demand issues right now.  Maybe that doesn't get you to nearly $140 per barrel of oil, but you throw in a weak $ (oil is priced in dollars), and a complete ineffectiveness to reduce consumption globally (ok - maybe the US is just starting now), and oil at $200 or $300 doesn't seem unreasonable.

I had posted here months ago looking for a good ETF to play the rise in oil.  One person responded "Oil is now at $60 / barrell - sorry you've missed the boat".  All I am saying is that this is not the end, and it will take a long time to come back down.  Hopefully though, oil's rise slows down.

Answer 2

Bush is borrowing huge amounts of money to fund wars and to fund tax cuts at the same time.  No wonder the dollar doesn't buy what it used to.

The China and India, both with bigger populations than the US are industrializing at a rapid rate and becoming major consumers of energy.  Demand is increasing faster than supply.

Answer 3

Business always figures out how to beat the system. It's slimeballs like this that exist only to widen the gap between the haves and have nots. And with politicos in their pockets, they have an easy time of it.

Answer 4

How do you know speculators have anything to do with it?  Many commodity prices are spiking.  Are speculators responsible for all of them?  Could supply and demand possibly have anything to do with price?

Answer 5

Without buyers and sellers there is no market.  Period.

Nothing in the trading market has changed -- Goldman has the same power today that they had 10 years ago...20 years ago.

Don't look for simple answers in a complex market.  You will inevitably shot the messenger rather than the cause.