Michael Greenberger On the Commodities Mess - Part Deux
As follow up to the Michael Greenberger interview link, here are two of his testimonials before Congress. In a prior post someone had posited my position that market price aberrations caused by financial firms could not be accurate. (my interpretation) A valid remark. In order to understand the question, you have to understand how the futures market works which I'm not going to get into because it's not relevant to this post. But, I responded that financial firms had inserted themselves into the supply chain and were taking delivery. And, that is one reason why stockpiles of many commodities are so low. Low stockpiles are often used by those bamboozled by financial firms telling us that demand from emerging markets is the reason for price spikes not seen at any time in history.
The general media discussion on market price aberrations is currently focused on the index funds buying and rolling contracts. That may be true but that's not express manipulation. It's simply a function of misguided regulation and oversight allowing unrestricted participation in commodity markets by law abiding investors.
Now we have the very qualified Michael Greenberger telling us exactly what I wrote. That is, financial firms are manipulating markets by inserting themselves into the supply chain. Remember, Greenberger used to be head of the government's commodities regulatory division so no one is more qualified to deliver fact-based testimony before Congress. The truth is quite different than what is perpetrated. And, so will be the outcome. I would encourage you to watch both videos as they are somewhat complementary and very educational to even a lay person. But, if you only watch one, I'd recommend the most recent where Greenberger spills the beans about financial firms inserting themselves into the commodity supply chain. I realize it may be a revelation but I sometimes do base my analysis on fact.
June 2008 Testimony
December 2007 Testimony
The general media discussion on market price aberrations is currently focused on the index funds buying and rolling contracts. That may be true but that's not express manipulation. It's simply a function of misguided regulation and oversight allowing unrestricted participation in commodity markets by law abiding investors.
Now we have the very qualified Michael Greenberger telling us exactly what I wrote. That is, financial firms are manipulating markets by inserting themselves into the supply chain. Remember, Greenberger used to be head of the government's commodities regulatory division so no one is more qualified to deliver fact-based testimony before Congress. The truth is quite different than what is perpetrated. And, so will be the outcome. I would encourage you to watch both videos as they are somewhat complementary and very educational to even a lay person. But, if you only watch one, I'd recommend the most recent where Greenberger spills the beans about financial firms inserting themselves into the commodity supply chain. I realize it may be a revelation but I sometimes do base my analysis on fact.
June 2008 Testimony
December 2007 Testimony
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