CFTC – Oil & Commodities Futures Manipulated By Financial Predators

It’s nice to see that the regulatory agency responsible for commodities futures oversight for all markets in the United States has finally acknowledged what we have been saying since starting this blog six years ago and many years before that in public comments elsewhere.

The Bush administration made a laughing stock of public service in more ways than one.  One was that the CFTC under Bush did an investigation and concluded there was no proof speculators were manipulating oil prices.   We have no idea if that was an outright political lie or whether the CFTC has been made that incompetent by politicians allowing capture of our government by Wall Street.

The Obama administration wants to triple the staff of the CFTC.  Without a new model of enforcement and regulation, it will simply mean more money will be wasted – seemingly a favorite strategy of the Obama administration.  But then any bureaucracy seeks a solution to any perceived problem by extending the power of said bureaucracy. 

I have a better solution.   Let’s get Wall Street out of commodities markets so we don’t have to regulate what is criminal activity.  We simply abolish it and the ridiculous need to police it. 

As we have written ad nauseam, Peak Oil is a myth.  Will we run out of oil 100 or 300 years from now?  Possibly.  But as we cited on here in the peak of the Peak Oil frenzy, the stone age didn’t end because we ran out of stones.  The world today is awash in the largest oil glut in the last thirty years and we have enough carbon-based energy reserves to last us 500 or more years.  At some point when corruption is tamed in this country, we will innovate our way out of oil dependency just as we innovated ourselves out of the stone age.   But similarly, first we need to get rid of the Elmer Fuddstones aka corrupt politicians.

Title link here. (The use of the term “day traders” by the Financial Times needs to be explained.  This is not Billy Bob sitting in his underwear in the basement of his grandmother’s home using her Social Security money to day trade oil futures.   There is massive leverage and risk trading any futures product and all but a relative handful of individuals don’t have the skill or algorithms to successfully do it.  This is short term, often high frequency trading by Wall Street firms and hedge funds using massive leverage to manipulate markets.  Manipulation that should be investigated under racketeering (RICO) laws.   Wall Street is by legal definition a racket.  And banksters have the legion of lawyers to prove it.  John Gotti, Al Capone and Lucky Luciano never had it so good.  Pablo Escobar did.  But then he didn’t live in the United States.)

On this same topic, it’s quite interesting to note that JP Morgan is one of the successful oil companies to receive oil from the Obama administration’s release of our emergency SPR oil reserves – a political move to a problem caused by political corruption. 

WTF is a U.S. bank given special privileges by the U.S. government and the American people to keep our deposits safe doing in the oil business?   It’s quite obvious.  They are manipulating it by inserting themselves into the supply chain as a massive tax on who are often the most underprivileged people in the world.  Underprivileged mind you, because of the same banksters denying people access to their own capital.  We need a public banking system that serves human development and not the whims of financial predators and sociopaths.

By the way, the CFTC is also reporting this exact same dynamic is driving the stock market and other commodity markets for anyone who still believes buying stocks or commodities for more than a short term trade is anything other than a Ponzi scheme.   Again something we said would happen when we wrote numerous times since the 2009 stock market bottom that Wall Street would eventually trade out competition in stocks and commodities as it had successfully done in its other businesses that are rigged to keep out competition…..  courtesy of politicians.   And that means Wall Street is again holding the bag for overpriced assets just as it was in the mortgage business.   This is exactly what we said would happen.  Exactly!  The world is unfolding as we said it would over the last six years, albeit more slowly than initially expected because politicians are busy spending everyone else’s money. 

Wall Street is the dumb money as we have said repeatedly.  Who is left to take the other side of their trades when they are proven wrong?  Why, that would be none other than the American people through more eventual bailouts by the Federal Reserve.  Something we also said will eventually happen.   Fool me once shame on you.  Fool me twice and you might have society sack its government, just like the people in Iceland did. 

The Age of Enlightenment continues.