Money and Music

As most writers, I am a tiny bit obsessed with music. Apropos of nothing, more than 14 million Americans are now out of work (according to the latest blizzard of stunningly disappointing U.S. Labor Department data released Friday).

In the past, we’ve seen our tired, poor and huddled masses of unemployed making not-happy-to-be-unemployed noises. Loudly.

Not so this time around.

If nearly 10 percent of the U.S. population is not working — not even beginning to count those who simply choose not to work, which would make it over 11 percent — why don’t we see any Million Unemployed Man Marches on Washington?

It now takes nine months on average for someone who is let go to find work again. That’s plenty of time to bang garbage can covers together with the other unemployed, if one feels like it.

Here’s the problem: these days, not making a lot of money — and especially being unemployed — is tantamount to wearing a scarlett letter. Professionally, it’s rough. But socially, it is a death sentence.

Which brings me back to the music, the best reflection of our culture I can think of. During the money-crazed 80s we had no dearth of songs about money, but they were ironic. Continue reading Money and Music

TSKing and DSKing

The whole Dominique Strauss-Kahn affair looks like it’s coming to a painful close (with even the close itself looking painful in some such terms as, when will it close?).

As we look askance, I am trying to ask myself…what have we learned? Not much. Except perhaps that Americans still believe the French to be rutting perverts (and rutting-pervert enablers) and the French still believe ugly Americans are ugly and…well, American. Not necessarily an oxymoron.

File the 20 minutes of DSK-maid time in Room 2806 of the Sofitel New York next to the 18 and a half missing minutes from Nixon’s “Watergate Tapes,” Jimmy Hoffa’s burial ground and Lord Byron’s lost canto.

Slow curtain, the end.

‘Bogged Down In A Pseudo-Religious, Ideological War Over Whatever’

Not my words, just something an observant Canadian living inside the U.S. had to say today about our country’s death match over the debt ceiling — before remarking that it might be wise to, uh, “back-migrate.”

Instead of an espresso shot this morning, take a gander at our impressive U.S. Debt Clock. If that doesn’t jolt you awake, nothing will.

Remember, no one on this planet even has $1 trillion. Yet, somehow the U.S. has found itself on the hook for more than $54 trillion. Continue reading ‘Bogged Down In A Pseudo-Religious, Ideological War Over Whatever’

How Now, Gold Cow?

So, I wrote a book…but I have not been goodly enough to do much blogging about it. This was not intentional. This was mainly because of the furious pace of travel, lawsuits, the odd threat — and the fact that I was serving full time as a journalism fellow at the University of Colorado at Boulder, trying to do my best to live a quiet life. I have since made amends, and will be writing regularly about my continuing fascination with sins of affinity and cultures of corruption. Healthy stuff like that.

Let’s start today with Goldman Sachs letting us all know that oil supply is headed for levels that are “critically tight,” sending prices in the U.S. up to nearly $100 again and in Europe still higher. This contrasts somewhat with the bank’s remarks in April that “supply-demand fundamentals are significantly less tight,” made by the bank’s chief energy analyst David Greely. At the time, this prodded oil prices into a temporary swan dive that proved a good buying opportunity for — some would say — Goldman. Mind you, oil supplies in the U.S. have been near their upper limits for most of the year, so not sure what the rumpus is about.

By May, however, Goldman pulled an about-face with its global head of commodities strategy, Jeffrey Currie, predicting that the loss of oil production due to the conflict in Libya would cause oil prices to surge. On cue, they did. Never mind that the Libyan conflict began in February, raging throughout Goldman’s projection of a price crash. Or that Libyan oil production has been a tiny drop in the global bucket (1.6 million barrels a day to the 20 million-plus a day consumed by the U.S. alone).

All told, Goldman’s prediction came just a few weeks after the bank told its clients to dump their oil investments. It makes one wonder which bank doubling as the world’s largest commodities trader was buying oil during that time? Continue reading How Now, Gold Cow?

Interview on ‘Keiser Report’ – Russia Today

Many of you have written to ask for a good bit more on the shenanigans prevalent in today’s oil market. Check out this show, aired today, from minute 14 on…(Thankfully, you can scroll through to the juicy stuff.) More to come on DOJ, FTC, CFTC and FERC investigations into the price of oil and gas — and where the biggest challenges lie for those who seek to break the back of the corruption.

 

‘The Asylum,’ Or How Capitalism and the American Dream Met Their Deaths

June 2011  by Rogue Philosopher

The Asylum: The Renegades Who Hijacked the World’s Oil Market by Leah McGrath Goodman details how a handful of commodity traders on the New York Mercantile Exchange (NYMEX) manipulated the energy futures markets and thereby did more than their share to destroy to our economy.

A singular tragedy in this sordid tale is how the commodity markets finally succumbed to the unbridled greed and power lust that characterized the rest of Wall Street. The commodity futures markets were always the bad boys of the financial community. They didn’t play by the stuff-shirt, pinstriped rules of the banks and investment community. The players on the NYSE and AMEX were mostly dullards. By contrast, the boys and gals at the Commodity Exchange Center in the World Trade Center were a colorful, indeed, even charismatic lot.  The traders were outcasts, renegades, cowboys. They stood apart from the financial herd. They drank hard, partied hard, and womanized shamelessly.

In short, they were a lot of fun.

The commodity futures markets were also the one last place in the financial community where someone starting out from humble beginnings and without the advantages of social or political connections could, with some assistance from Lady Fortuna, make it big. Or at least make a real good living for himself and his family. Traders like these represented one of the few remaining symbols of the American Dream.

No more…

Continue reading ‘The Asylum,’ Or How Capitalism and the American Dream Met Their Deaths

How Fear, Greed Factor Into the Price of Gasoline

The price of oil is set not in Vienna at the headquarters of OPEC, but at the New York Mercantile Exchange.

Llewellyn King, PBS

Sunday, May 1, 2011

WASHINGTON — The fate of the Obama presidency hangs not on a birth certificate or the red ink on the federal budget but by the hose nozzle of your local gas station.

Electoral discontent is measured by the price of a gallon of gasoline. Heading past $4 toward $5, that is a lethal trajectory for President Obama.

Enter the demagogues, especially the clown-in-a-business-suit, Donald Trump. Unfettered by the gravity that goes with facts, Trump says that he would fix the oil price — now around $110 a barrel — by facing down the producers, particularly the Organization of the Petroleum Exporting Countries (OPEC). He told an interviewer on television that he would call OPEC and tell them to pump more or face the consequences. The latter, he did not specify. War? Against whom?

In a compelling book by Leah McGrath Goodman, The Asylum: The Renegades Who Hijacked the World’s Oil Market, the author lays out the ugly fact that often — in fact, more often as not — the price of oil is set not in Vienna at the headquarters of OPEC, but in downtown Manhattan at the New York Mercantile Exchange (NYMEX).

Tens of thousands of future contracts are traded in nanoseconds at the NYMEX, and the price of oil is set. This price affects not only the price that will be paid when these contracts expire and delivery takes place, but also, according to Goodman, the all-important over-the-counter market, where sellers trade more directly with buyers without government oversight.

Goodman contends that there is little oversight of the NYMEX because the agency charged with the role is the weak and ineffectual Commodities Futures Trading Commission (CFTC), where many staff and commissioners are busy burnishing their resumes so they can cash in later as market executives.

The over-the-counter market is not regulated at all because of a pernicious interference from Congress known as the “Enron Loophole.” How did it get into law? It is one of those pieces of special-interest protection that owes its existence to legislative immaculate conception. It was not in the committee version of the bill; it slipped in along the way without parenthood, but is largely believed to be the work of former Sen. Phil Graham, R-Texas, whose wife, Wendy, was chair of the CFTC.

In classic theory, a market is where a willing buyer and a willing seller strike a price. In the world of traders, it is something else: It is where volatility is rewarded and myths hold sway.

Today there is no actual shortage of crude oil. Supply and demand, according to those who monitor these things, is in balance. But fear stalks the trading floors because fear is good for traders; and fear is a critical part of the oil price. Continue reading How Fear, Greed Factor Into the Price of Gasoline

Quote from a great piece in this month’s Vanity Fair, penned by the illustrious Mr. S…

“Much of today’s inequality is due to manipulation of the financial system, enabled by changes in the rules that have been bought and paid for by the financial industry itself—one of its best investments ever. The government lent money to financial institutions at close to 0 percent interest and provided generous bailouts on favorable terms when all else failed. Regulators turned a blind eye to a lack of transparency and to conflicts of interest. When you look at the sheer volume of wealth controlled by the top 1 percent in this country, it’s tempting to see our growing inequality as a quintessentially American achievement—we started way behind the pack, but now we’re doing inequality on a world-class level. And it looks as if we’ll be building on this achievement for years to come, because what made it possible is self-reinforcing. Wealth begets power, which begets more wealth.”

– Joseph E. Stiglitz, economist and Nobel laureate

5 Shocking Gas Prices Around The Globe

Surprised by Gas Price of $4 a Gallon? Try $8.35 in Germany

By SUSANNA KIM

April 12, 2011

While American drivers are spooked by $4-per-gallon gasoline prices in the U.S., they may be shell-shocked on other continents like Europe. In London, gas was $8.17 per gallon in March, and in Istanbul, Turkey the price was $9.63, according to DailyFinance. 

Leah McGrath Goodman, author of “The Asylum: The Renegades Who Hijacked the World’s Oil Market,” said at least two factors contribute to the variance in global gas prices. First, countries that produce their own oil often have lower prices. Second, different governments choose to subsidize or tax citizens for purchasing gas.

“Every country is different, obviously,” Goodman said. “Some countries have amazing subsidies. In Libya, even with its conflict, its low price has a lot to do with the fact that the government can choose to charge people a lot less.”

Here are five national averages around the globe… Continue reading 5 Shocking Gas Prices Around The Globe

Same Oil, Same Palaver…

Another year of high oil prices, another endless conversation about the role of speculators. Call up anyone on Wall Street or in Washington to find out what’s really going on. Chances are, the answers you get will go a little something like an Abbott and Costello routine.

Abbott: Well, let’s see, we have almost $4 gas and $110 oil. Who’s trading it? What’s the reason it’s so high? I Don’t Know…

Costello: That’s what I want to find out.

Abbott: I say, Who’s trading it; What’s the reason it’s so high; I Don’t Know.

Costello: Are you the portfolio manager?

Abbott: Yes.

Costello: You gonna’ be the regulator too?

Abbott: Yes.

Costello: And you don’t know the fellows’ names?

Abbott: Well I should.

Costello: Well then who’s trading it?

Abbott: Yes.

Costello: I mean the fellow’s name.

Abbott: Who.

Costello: The guy trading it.

Abbott: Who.

Costello: The first one to trade it at $110.

Abbott: Who.

Costello: The guy trading…

Abbott: Who is the first!

Costello: I’m asking YOU who’s the first.

Abbott: That’s the man’s name. Continue reading Same Oil, Same Palaver…

Author, Historian and Investigative Journalist