Leaked Documents Reveal Major Speculators Behind 2008 Oil Price Shock: Hedge Funds, Koch, Big Banks,

[kpete]

Source: Think Progress

Leaked Documents Reveal Major Speculators Behind 2008 Oil Price Shock: Hedge Funds, Koch, Big Banks, Oil Companies
By Lee Fang on Sep 15, 2011 at 11:30 am

Last month, Sen. Bernie Sanders (I-VT) leaked confidential data about oil speculation to a number of media outlets, including the Wall Street Journal. Ordinarily, the Commodity Futures Trading Commission, the regulatory body that oversees futures trading, does not provide identities of speculators to the public. However, the data leaked by Sanders provides a rare snapshot into the trading volumes by major speculators right before the oil price spike in the summer of 2008.

As experts from Stanford University, Rice University, the University of Massachusetts, and authorities have concluded, rampant oil speculation was the prime driver of the record high prices for crude oil three years ago.

To view a copy of the data, click here http://www.slideshare.net/lee_fang/energy-holdingswticrudeoil for documents leaked by Sanders. To view an organized spreadsheet, click here. https://docs.google.com/spreadsheet/pub?hl=en_US&key=0AqLBaNIZ8Pc6dFk3MFlvRW5rYVktVDJOSFpTVG5ZQ1E&hl=en_US&gid=3

Notably, the top speculators are noncommercial players, meaning they are companies that simply and buy and sell crude contracts with no interest in actually refining and selling the product. Each contract in the list represents 1,000 barrels of oil. The documents show the total volume of trades made on one specific day shortly before the record high price of $148 per barrel.

Read more: http://thinkprogress.org/green/2011/09/15/317330/leaked-cftc-oil-speculation-data/

---

"this data is important because it shows who the “big players are”

[ixion]

1. how about now?

[wellst0nev0ter]

5. No This Time It's Different!

I swear, ask all the Matt Taibbi haters we have around here.

[vets74]

86. Matt_Taibbi_Hater =EQUALS= Corporatist Shill

What else ?

Let's get this out of the way. The Internet is one more propaganda battlefield and the paranoid/sociopath/control-freak righties are playing it like everything else they do.

Shills are cheap. $40,000 buys a more than full time keyboard pounder.

Attacking Taibbi ??? As a pack of howlers. What else ?

[valerief]

108. +1000

[DissedByBush]

27. Yep, gas is almost as expensive now

Around here it got close to $4, and lately it's been running around $3.60 or so.

[wordpix]

66. it's 3.85 in CT, very close to price in '08 when oil was at $150/barrel

hmmmm...who's speculating now?

[bhikkhu]

52. Now, dems blame the speculators, and repugs blame the dems

...and too few consider that we are utterly dependent on a finite natural resource, which we have been burning through at a staggering rate.

Of course, when production increases stalled in 2005 and discoveries had been slowing for ages, speculators could see that price increases were coming, and there are plenty of ways to bet on rising prices and make some money. If they had some inside scoop on coffee or banana shortages bringing price increases, they probably would have bet on those too...that's just the nature of the markets we have - and it still is.

There are other stories there more pertinent to how we go about things, however.

[The Doctor.]

64. No, Paul Krugman said that oil speculation had nothing to do with it.

And since he's infallible, I guess we're wrong at the moment.

[bhikkhu]

68. Krugman has good points on most things

whether I agree with them or not. I've heard that he is worth listening to, but I've never heard anyone call him infallible.

[CAcyclist]

92. Document your assertions

I can't stand it when people allege that a certain person said such and such without ever providing the evidence.

Your assertion does not make sense to me based on what I've read from Paul Krugman. Maybe you're right but you have to find the quote from him that proves it and properly footnote it.

[CAcyclist]

94. Here is Paul Krugman's actual opinion from 2009

http://krugman.blogs.nytimes.com/2009/07/08/oil-speculation/

July 8, 2009, 9:01 AM
Oil speculation
Oil speculation is back in the news. Last year I was skeptical about claims that speculation was central to the price rise, because what I considered the essential signature of a speculative price rise — physical withholding of oil from the market, in the form of high inventories — just wasn’t showing.

This time, however, oil inventories are bulging, with huge amounts held in offshore tankers as well as in conventional storage. So this time there’s no question: speculation has been driving prices up.

[vets74]

87. "Blame" ties to criminal acts. Goldman/Aleynikov "secret sauce" breaks exchanges' security

Krugman is knowledgeable and analytically sound. But he also wants to avoid getting his fat ass disappeared. He never addresses capitalism's utter/helpless/continuing vulnerability to it's insider organized crime syndicates.

Goldman, Sachs is the very worst. They bribed their way to change rules to get their software "co-located" with the Exchanges. That means inside-the-exchange-computers inside-the-network-firewalls inside-the-FIX-Protocol-and-SWIFT-security-firewalls. The same pattern repeated across the various Exchanges.

Did someone try to steal Goldman Sachs’ secret sauce?

While most in the US were celebrating the 4th of July, a Russian immigrant living in New Jersey was being held on federal charges of stealing top-secret computer trading codes from a major New York-based financial institution—that sources say is none other than Goldman Sachs.

The allegations, if true, are big news because the codes the accused man, Sergey Aleynikov, tried to steal is the secret code to unlocking Goldman’s automated stocks and commodities trading businesses. Federal authorities allege the computer codes and related-trading files that Aleynikov uploaded to a German-based website help this major “financial institution” generate millions of dollars in profits each year.

The platform is one of the things that apparently gives Goldman a leg-up over the competition when it comes to rapid-fire trading of stocks and commodities. Federal authorities say the platform quickly processes rapid developments in the markets and uses top secret mathematical formulas to allow the firm to make highly-profitable automated trades.

The criminal case has the potential to shed a light on the inner workings of an important profit center for Goldman and other Wall Street firms. The federal charges also raise serious questions about the safeguards Wall Street firms deploy to protect their proprietary trading systems. ...

*** There ain'ta gonna be any light shone on any of this high-tech thievery. ***

Reuters - Did someone try to steal Goldman Sachs’ secret sauce?

Goldman does front running as part of it's normal everyday execution algorithm. Goldman does naked shorts as part of its normal everyday execution algorithm -- which is now Self-Regulating Organization NYSE/NASD legalized for the co-located super-insiders. Goldman also said in their complaint statement to the FBI that this software could "manipulate" the NYSE market. They admitted that they have this power.

CONTROL FREAK CROOKS.

That's the squid. And they're hooked up with a super-level/top-tier national intelligence security software shop that has no connection to the U.S. government. The FBI had no luck whatsoever back-tracking the intrusion software -- not that they really tried. Getting disappeared can happen anywhere.

There's no Organized Crime Strike Force aimed at Goldman, Sachs. The Left could push for this step and make it a public policy issue -- except that the Left wouldn't know an OCSF if it galloped down Main Street with former-Special Agent Coleen Rowley astride it at the neck.

Goldman got everything they needed on a platter to break the Exchanges' computer security. They sold what was left of their souls to make that happen. Beautiful.

"Nice pair a dogs, Queenie..." indeed.

[Kingofalldems]

2. Kick and Rec one time for the teabaggers

[Andy823]

46. Won't do much good

Teabaggers seem to NOT be able to see things like this, they think it's all "liberal" propaganda and they "KNOW" that if it were true the news channel they get all their information from, faux news, would of course tell them so, and until "faux news" tells them something there is no way in hell they will believe it! Sad but true!

[dotymed]

56. That must be why none of the MSM

have reported on the House bill to impeach four of the Supremes. It never got one minute of MSM coverage.

That is why Reagan sold the truth to the highest bidder. REINSTATE THE FAIRNESS DOCTRINE, that alone would help America so much. Ignorance and greed are our big problems.

[raccoon]

95. Elucidate, my dear Watson.

"That must be why none of the MSM
have reported on the House bill to impeach four of the Supremes. It never got one minute of MSM coverage."


Are you referring to this:

Congressman (Peter DeFazio) Considers Move to Impeach Chief Justice John Roberts

http://www.thenation.com/blog/155545/congressman-considers-move-impeach-chief-justice-john-roberts?comment_sort=ASC

[dotymed]

101. Not at all.

I am referring to this http://thinkprogress.org/justice/2011/09/09/315555/members-take-on-scotus/ which is what This post was about http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4989917.

My muddled thinking was that 136 (D) house members had introduced a bill to impeach 4 of the most unethical justices. Actually it is 43 Congress members trying to insure that the SCOTUS "justices" follow the same rules as other judges do.

I prefer my first inclination though. Maybe it was just a pleasant dream that I had. Anyway, excusing SCOTUS Justices from the everyday rules that all other federal judges must adhere to, reeks of classism and injustice.

The "supremes," IMO, should be held to a higher standard of impartiality, not a lower one, if they even have standards for people of that caliber.

Either way, to my knowledge (pretty sure on this part) none of this was ever reported on the MSM.

[Enthusiast]

70. Teabaggers have been told to

be in favor of deregulation. So they are. No matter what.

[bananas]

3. kr nt

[Norrin Radd]

4. kr

[Hydra]

6. A veritable who's who of criminal high rollers n/t

[Waiting For Everyman]

7. The extra money out of our pockets went to these named speculators.

(and isn't it interesting that most of the biggest were banks, and the Kochs were in on it too.)

I think the profits on this should be confiscated and put into an infrastructure fund - and btw, all of the jobs created to do that work should go to Americans ONLY.

Those higher prices we were FORCED to pay against our will were nothing but THEFT. It should be prosecuted as such. It's just like Enron.

Thanks! to Bernie Sanders for proving what I, for one, and others too, knew at the time. It was obvious. Now some legal action should be taken about it (including ending non-interested-party speculation). If the thieves get to keep their ill-gotten gains, it will go on. This has to stop.

[yardwork]

8. Nobody could have imagined...

[SpiralHawk]

18. "We need to end all regulation and let the 'free market' rule. Smirk." - Republicons

Ptoooey....

[Enthusiast]

72. Just like planes into buildings.........nt

[Cool Logic]

9. I am quite certain that OPEC had nothing to do with it...

[lindysalsagal]

10. But...High prices are Obama's fault!

:crazy:

[defendandprotect]

60. Well, of course, Obama isn't pals with any of these anti-democractic corporations ... is he?

And presumably Obama would have no info on this, either -- even if he asked?



:rofl:

[sarcasmo]

11. Koch criminal enterprise.

[Hotler]

12. Quite the group of players. eom.

[cosmicone]

13. The speculators are scum .... but ....

they wouldn't have anything to speculate on if Americans didn't drive 10,000 lb SUVs to go to the supermarket and to work.

Europeans do just fine with small cars but some of us insist on driving bloated hunks of steel.

If everyone in America whose job doesn't require an SUV started driving a small or mid-size sedan, 20% of the demand would go away and the speculators would hemorrhage badly.

[bluesbassman]

30. No, we'd just be paying $8.00 a gallon like they do in Europe.

So there's that.

[cosmicone]

59. The $8/gallon in Europe is not due to demand

It is due to higher taxes which are used for social programs. Decreasing demand lowers prices and big fat SUVs are the cause of a criminal wastage of gasoline and increased gas prices.

[wordpix]

67. what does this have to do with driving SUV's? And $8 gas in Europe & Canada gets you health care &

other things. In Canada, there are subsidies for college and child care, for example, if you can't pay full freight on the latter.

[aquart]

14. Thank you , Bernie. Now can we hang someone?

Or two?

[SomeGuyInEagan]

63. Not as long as there are reality shows and millionaires posing as journalists.

It is class warfare, always has been, and *everything* else is distraction. I have no idea how there has not yet been blood in the streets. Simply no idea.

[tcaudilllg]

69. Three words: Barack Hussein Obama

He keeps the tempo JUST above level, to keep people from taking action.

[santamargarita]

15. 'Brunch with Bernie' should be good tomorrow.

[SoapBox]

16. Surprise!!!! Oh ya....NOT!

Crooks, Criminals and Liars.

GOPBaggers all.

[SpiralHawk]

17. Republicon Family Values = Screw America and Americans

Freaking greedy grubbing fatcat republicon a-holes.

[glinda]

19. These people should be in prison.

[davidwparker]

20. K&R

[glinda]

21. And this should be posted to the canada group. Bank of Montreal huh?

[Amonester]

58. They 'play' the same game as all the others...

because they have to compete like all the others.

I doubt they would 'play' that game if that 'game' was made illegal, though.

But illegal it isn't. The question is, why isn't it illegal?

And the answer is, because they take a chunk of the gaging profits to buy politicians.

I doubt they would 'buy' politicians if 'buying' politicians would be made illegal...

[EvilMonsanto]

22. The Return of Koch

These Koch Bros....ARGHHHHHHHHHHH

GO AWAY!!!!!!!!!!!!!!!!!!!

[INdemo]

28. This is a perfect example of why the corporate mafia want another

puppet like Perry..They will spend millions so they can keep this illegal trading going and earn millions while costing the public billions..Yes all the Koch Bros and their corporate mafia friends want is for this election to be close so they can steal it and we should be extremely worried because these mafia execs probably have all the tools in place to walk away with their puppet celebrating..

Sure this happen in 2008 but it is no different than the insider trading taking place today.

[INdemo]

29. Duplicate

[catzies]

23. Bet they did it because they knew everything was near collapse anyway

Uh oh, we're not going to make any more money in the mortgage(fraud) business, what else can we grab from & put off total collapse a little bit longer?

[Enthusiast]

73. Sounds plausible......nt

[sakabatou]

24. The rich are fucking everyone.

[valerief]

42. In every orifice. And when they're done with them, they break skin and make more. nt

[bl968]

25. Simple fix

They need to prohibit speculation in commodities unless you or your company has a product you are going to use the said commodity to manufacture a product, or for direct sales to the public (fruits, vegetables, etc.) Any other selling of commodities for profit should be strictly prohibited. For example a petrochemical company could purchase oil futures to meet their need, but a investment bank would be prohibited from buying any at all.

[subterranean]

49. They used to have position limits.

Traders were allowed to participate in commodity futures to provide necessary liquidity, but were limited to small positions. In the 1990s, Goldman Sachs and other investment banks asked for, and were quietly granted, waivers of these limits, which led to the creation of commodity futures index funds.

The CFTC is currently trying to reimpose the position limits, but unsurprisingly, that effort is running into obstacles:
http://www.baltimoresun.com/business/sns-rt-us-cftc-whistleblowerstre78d6bo-20110915,0,7290612.story?page=1

[Enthusiast]

74. I'm all for your solution.

But. Just try to get 'er done.

[JohnWxy]

26. RECOMMENDED. Bookmarked. Everyone should read and bookmark and re-read.

[cyberpj]

31. If we had a real Justice Dept. - or even a real FBI, this list would be investigated. nt

[Enthusiast]

75. If we had a real media they would report on it.

This isn't doing much for my enthusiasm level.

[bhikkhu]

32. If they found out coffee was going to run short, they'd speculate on that

...the same if it was zinc, pork bellies, silicon, corn, whatever. Not that I don't appreciate Sanders overall, but in this case its kind of like there's no lid to blow off - its legal and normal in most countries.

If we nationalized oil, or had a different set of marketplace regulations, that would be a different story, but anyone here is free to buy and sell trading positions, at their own risk.

What narrowed the risk in this case was that oil was in short supply, so the price was most likely to go up, then it became a game of chicken as to how high it would get before the price of oil brought on recession, and the price collapsed along with demand. As in many market plays, it wasn't the outcome that was in doubt, but the timing. Its not especially different now.

[plumbob]

51. Legal, but hardly normal to trade bits of paper which represent items you never

intend to own or use, until the bits of paper control the prices of things that we DO own and use.

What's normal? Buy or trade for what you need or use. This shadow shit is killing us. Naked trades should be illegal, and I mean prison time illegal.

[Enthusiast]

76. Bob, you are plumb!

And correct too.

How far will they allow their greed to take them? I fear it is down a road to far to get back from where they cut up the golden egg laying goose.

[unkachuck]

33. an economy....

....controlled and financed by organized crime....

....talk, talk, talk, when is someone going to prison for life, or be executed, for destroying the lives of millions of Americans?

[madrchsod]

34. so we finally we have the details......

[Mr Gerrity]

35. Shocker

:shrug:

[McCamy Taylor]

36. Can we sue them? Class action?

[Demeter]

54. Greed isn't a crime, esp. When you rig the laws

[rainy]

37. When are the big media conglomerates going to pick

up this story and inform the people? Un huh, thought so.

[Enthusiast]

77. Yeah!

[Fumesucker]

38. It's just awesome that the Democrats have told us about this!!11!!

I'm really pumped to see these results of President Obama's transparency in government initiative.

[dd2003]

39. Koch werent speculators to the upside

If you look at the data, they technically had more short positions predicting prices to fall and were possibly hedging their long positions... Goldman and DB were the biggest speculators and had the most to gain from an uptick. I still hate the Kock Bro's, just explaining the data.

[WhiteTara]

40. Leaked? This is an official statement of fact.

Everything is so negative and bass akwards, it's hard to find sanity. This is an official making a public statement...why wouldn't that be called a press conference?

[farmbo]

41. Make them take delivery...

Require anyone with a futures position in the commodities to have the infrastructure to actually take delivery on the underlying commodity-- not 100% of the contracts, but at least,say, 25%.

Problem solved.

This is no different than requiring low- leverage margin calls, but it keeps the casino gamblers from running up prices on oil, feed grains, etc.

These commodity prices are just too fundamental to our macro economy to allow those hedge fund dandies and trust fund heirs to essentially corner markets.

[Jefferson23]

43. It is not fair that we can't clone Bernie. K&R

[Luciferous]

47. +1000

[classysassy]

44. Senator Sanders

Is Bernie the only politician in Washington that has not been bought by the wealthy criminals in the world?

[Jefferson23]

45. No, but it is a short list imo. Marcy Kaptur, the Congresswoman is another favorite of mine

Wish we could clone her too..but there are others, they get overshadowed by the worst of the bunch.

on edit for clarity.

[Enthusiast]

79. Favorite here too..........nt

[7wo7rees]

97. That makes two total.

The other 532 can go to work for the corps. They do not represent us.

[Enthusiast]

78. Close.......nt

[russspeakeasy]

48. Bernie is a hero.

:toast:

[vets74]

88. Google [sanders community health center ]

Harry Reid did the tactical fleche, putting the money in at literally the last hour going into the Reconciliation Bill vote. Harry gets ragged by every online gopper-shill...... because he's really good at his job.

But getting the CHC system pushed up to 45,000,000 served over the next 4 years -- that was Bernie Sanders and his friend Hinton from the get-go.

CHC's cost 1/5th as much as going in to Emergency Rooms.

CHC's eliminate the prime fraud of American medicine ::: phony referrals for Chronic Care patients. The dollars that get generated with useless, contra-indicated runarounds total at least $600-billion a year. This fraud is called "McAllenization" for McAllen county in Texas.

Yeah, Bernie !!

[Arctic Dave]

50. Can we call it racketeering now?

Where is the AG on this?

[SnakeEyes]

100. Not unless there is the appearance of illegality.

Buying and selling futures not illegal. If you look at many areas of the market you're going to see the same players. They have huge investment funds.

[Arctic Dave]

106. It is if the result is price fixing, which this seemed to be their planned outcome.

they had no interest in refinement. This seems a classic price fixing scam to me.

[Octafish]

53. Who knew?

I am tired of Big Oil and Wall Street running Washington.

[Warpy]

55. I tried to point that out at the time

that commodities bubbles were being created in all sorts of commodities by the big investment banks and hedge funds because commodities were relatively easy to manipulate, especially once Phil Gramm changed the rules.

I've disagreed with Krugman over the past year because this present crop of commodities bubbles are following the same damned pattern the last one did. Krugman denies it's taking place. I know it is from watching the patterns of large amounts of money in and how it's also taken out.

The problem is that commodities prices are being manipulated worldwide, increasing the costs of such staple foodstuffs as rice and wheat. The price bubbles are largely the cause of the Arab Spring. Populations had put up with brutal regimes for the sake of order until food prices went through the roof. Add hunger to repression and you get revolution.

The Koch boys were some of the smaller players in this, actually. The big banks had much larger positions in this stuff. Together, they created bubble markets.

The psychology behind a bubble market has the small fish rushing in as it's being noticed and the big fish use that opportunity to pull out with their profits. Then the small fish lose their shirts when the price corrects without all the big money inflating it. It's how the last vestiges of wealth are generally bled off the upper middle class.

[girl gone mad]

105. I took issue with Krugman on his blog in 2008..

he claimed that speculation had nothing to do with the run up in oil then, too. He was totally wrong.

[Warpy]

109. Thanks it's nice to know I'm not the only one.

[Hubert Flottz]

57. It's how the GOP funds their presidential elections.

The thieves grab the money from the public and slip it to the GOPers to campaign on.

We pay the GOP's political tab at the pump.

[defendandprotect]

62. +1000% --- Costs corporations a lot to buy our government and elected officials -- !!

[young_at_heart]

61. SO much happened in 2008 yet it's seldom mentioned

The damage done by Cheney/Bush and cronies is incalculable and yet we hardly ever talk about it today. Their disastrous policies have never been denounced by a single Republican (that I know of).

[Enthusiast]

80. You're right.

Even Iraq is a positive in their alternate universe bizarro world.

[Arthur3284]

65. And let me guess, nothing will be done to them because they fund everyone's campaign.

[Enthusiast]

81. Did you figure that out all by yourself?

[Enthusiast]

71. kr nt

[Sancho]

82. Ed and Rachael should be talking about this...

and there should be a windfall profits tax.

[dmosh42]

83. What we were saying, but now confirmed....

Most of the 'big' banks that we kept afloat during the financial crisis of 2007-08, are actively working against the people of the USA! Just another rigged activity, like elections.

[Somawas]

84. Quelle surprise. Non?

[progressoid]

85. Hey, don't employees of some of those companies now work in the White House??

:shrug:

[Javaman]

89. I recall a story of some speculator who stated

"I just wanted to see if I could get the price of 100".

wish I could find it now.

[Festivito]

90. Top 25 when all four groups are added together includes China??? as fourth?

GOLDMAN SACHS GROUP
BARCLAYS PLC
MORGAN STANLEY GROUP
GOVT OF PEOPLES REP OF CHINA
VITOL SA
BP PLC
BRANCH GROUP
JP MORGAN CHASE BANK
DEUTSCHE BANK AG
MOUNTAINEER NATURAL GAS TRUST
MUELLER GROUP
BASF INTERTRADE AG
CREDIT SUISSE GROUP
LEHMAN BROTHERS
MERRILL LYNCH
CITIGROUP INC
BOONE PICKENS
CENTAURUS ADVISORS
CHAPARRAL ENERGY LLC
GEORGE B. KAISER
MITSUI & CO
DEUTSCHE LUFTHANSA AG
LIBBEY GLASS
LINDEN POND
BANK OF MONTREAL

[obxhead]

91. Caaaaaaaaptainnnnnn Obvious flies in.

Glad to see this document, but this should have been obvious to even the least informed individuals.

[blkmusclmachine]

93. GREED

n/t

[chill_wind]

96. Let's blow that list of players up a little more

(for those of us who struggle some with eye-strain)

Ah yes:

[KansDem]

98. k&r

This makes me very angry...:grr:

[SpankMe]

99. No to new taxes, but yes to higher gas prices?

A tax by any other name is no problem for Republicans. Call money our of your pocket a tax and they go psychotic. Force it out of your pocket in the form of higher gas prices, which goes into the pockets of rich speculators and adds no value to the economy, and that's OK.

The money from higher gas prices - where the prices were driven up at least somewhat by this speculation - went from the pockets of workers into the pockets of rich people. I don't see how this "tax" on the middle class would have created jobs.

It infuriates me that Republicans are universally opposed to taking money out of people's pockets in the form of increased tax revenue so the government can pay its bills and take care of the people; yet, they have no problem allowing money to be taken out of people's pockets to support speculative gain - gain that is not a result of the production of anything and that doesn't create jobs or otherwise stimulate the economy.

[DrunkenBoat]

102. where is koch in that list? i don't see it.

[disillusioned73]

103. K&R... Love the pic

Sanders = HERO, no doubt.. a man amoungst rats (or is that mice) no offense to rats or mice.

[Uncle Joe]

104. Kicked and recommended.

Thanks for the thread, kpete.

[myrna minx]

107. K&R n/t