Friday, June 6, 2008
Maximizing Profits=Switching Up On the Con
Sounds like top US financial institutions--Goldman Sachs (GS) and Morgan Stanley (MS) are taking the opportunity to recoup their losses from the recent mortgage banking crisis, by speculating on oil. Not surprisingly, Morgan Stanley's fortune tellers predict prices will rise to $150 by July 4th; shills for Goldman Sachs say prices could soon rise to $200 a barrel.
According to CNN.com:
"Commodities markets often turn on proprietary information known to a limited number people. An oil company can take advantage of inside information about its own production outlook when it makes trades. However, if traders intentionally create an artificial price and use it to make money, market manipulation charges may arise."
"Goldman Sachs and Morgan Stanley are major players in the world of commodities, which range from trading to hedging and even owning electricity plants and oil barges. In the first quarter, Morgan Stanley calculated that it took more risks in commodities on a daily basis than in stocks."
[Editors note: According to the House Energy and Commerce Committee, speculators make up 71% of NYMEX oil futures shares, up from 37% in 2000.]