George Soros: Oil speculators could cause stock market crash

George Soros: Oil speculators could cause stock market crash

www.guardian.co.uk

George Soros, the billionaire hedge fund manager, will warn later today that the oil price has become a bubble that could trigger a stock market crash.

The Financial Times reported today that Soros will tell the US Senate commerce committee that oil was pushed to its recent all-time peak of $135 a barrel by a new wave of speculators.

He believes that the doubling in the price over the last year is partly due to investment institutions, such as pension funds, who are pumping money into indexes.

(visit the link for the full news article)


Related News Links:
www.ft.com
business.timesonline.co.uk

So, straight from the horse's mouth. Continued speculation in oil could lead to the bubble bursting (with oil prices plummeting) and with it the stock market.

I have a feeling that the speculators won't listen, though...

www.guardian.co.uk
(visit the link for the full news article)

I am conflicted on this one. I think that it absolutely is an artificial bubble created by speculators. Yes, demand is increasing in China and India, but demand hasn't doubled in the last year like the price has.

I am thinking that they (billionaire insiders) know that a stock market crash is coming and they will try to pin it on the oil speculators. You would think that the bubble bursting on oil would cause the stock market to rise again. Lower oil means cheaper gas and cheaper food which are becoming huge burdons for people world wide. People would have more expendable money again. Also, the stock market so far has always gone up when oil goes down, so why would oil coming back to earth cause the rest of the market to tumble?

I am sure there are reasons, but I just don't understand them. I think the entire economy is falsely propped up right now and they know the cards are going to fall eventually. Perhaps oil tumbling will make it harder to mask the deflating dollar and the real inflation numbers?

Who knows, but I look forward to the oil bubble popping. This is getting ridiculous.

George Soros, eh?

I dunno' about him. He's the guy who tries to buy election after election.
He may know finances. But then again, I dont' trust anything he says.
It's all tainted with politics and agenda. If he actually told the truth about
something I'd never know for sure - given his history and all.

I can see that happening
this is from another news story:

The Institute for Supply Management's index of manufacturing activity edged up to 49.6 in May compared with an April reading of 48.6, easing some concerns that soaring oil prices were crushing manufacturers. However, the reading remained below 50, the dividing point that indicates if manufacturing is in a recession.

With global stock markets still weak compared with the robust gains of the past few years, many investors see better potential for gains in the oil market. Speculative buying has been cited as a major reason behind oil's more than doubling its price in a year.

"As an asset class, oil has performed better than stocks and bonds," said Shum. "Until global equities turn better, oil demand collapses or supplies increase significantly, we're not going to see a substantial drop in oil prices."

The Key was in the middle "many investors see better potential for gains in the oil market". Its all about money and with the real estate market bust these fund and asset managers are scrambling around for new places to invest...
In business, growth is good but if speculators drive this market to far to fast we could see a general collapse in other critical industries like trucking and shipping... then what happens to the rest of the businesses out there when their goods and services cost to much to ship???

link to yahoo story

[edit on 3-6-2008 by DaddyBare]

reply to post by DaddyBare


Thanks for the link. I can see a lot of people losing money who still think oil is going to rise. I really, really hope it comes back down, whether the stock market wants it or not. I would rather have a market that isn't being supported by a bubble, even though as soon as oil pops another will inflate.

oil demand collapses or supplies increase significantly

Demand is dropping, in the US at least and I think that the people who are heavily invested in oil are the ones that want everyone to believe that supplies are low. OPEC says they aren't. I've never seen a gas station run out of gas... I don't believe it is a supply and demand issue, therefore I do think the bubble will burst eventually.

Semper Fi BTW

reply to post by Karlhungis


Ah but another thing to keep in mind Karlhungis is these very same fund managers and speculators are "Gamblers" Another report that came out last week about the up coming Hurricane season said we had a 65% chance of a more active season the normal...
to their way of thinking that's better the 50/50 the major refineries along the gulf coast will be knocked out long enough to double their money!

Don't believe me... watch what happens to the price of oil once we get the first major storm....

[edit on 3-6-2008 by DaddyBare]

i'm surprised that nobody has mentioned that the oil companies have a monopoly, and this is exactly what happens when a few control a massive amount of one commodity. and this is why in the 20th century, laws were passed to regulate monopolies. a solution would be for the government to take steps to nationalize this commodity in some form. yes...i know...all the "SOCIALISM" fear mongering rhetoric will follow. but let me ask you this...why do all the countries that have done this have far lower retail prices for their gasoline and diesel? and the solution can be a combination of state and private control. you have to remember though, that all corporations must make more profit in each succeeding quarter, and that profit will come out of YOUR pocket, not anyone elses. also, one other thing, which is a basic business profit concept...charge as much as the buyer will pay, and that is the problem with this product being in the hands of a few. we do not have any recourse (at this time) for a viable alternative. so all you consumers will pay as much as possible, until you stop buying...simple really.

[edit on 3-6-2008 by jimmyx]

reply to post by FlyersFan


No doubt about it.

Note that his position is that a DROP in oil prices would cause a stock market collapse. That should tell you something, folks. Looks like Soros and his hedge fund buddies have realized that the game has gone too far and that their manipulation of the oil markets for political purposes now threatens their own pocket books and reputations.

So Soros comes out and says 'W-W-Wait! I, uh...we, we NEED high oil prices! Yeah, that's it, WE need high oil prices or the market is just going to come unglued!'

Sorry, I'm calling BS on this one. This is a case of the manipulators being afraid that they're going to 'get theirs', so to speak. He knows that they took it too far and that it may be getting ready to blow up in their faces.

Originally posted by Karlhungis

Demand is dropping, in the US at least and I think that the people who are heavily invested in oil are the ones that want everyone to believe that supplies are low.

Last week, the Senate commerce committee heard that the amount of money pumped into commodity-index investing has soared to $260bn (£132bn) this year, from $13bn in 2003.

Its almost impossible to deny at this point, isn't it. Commodity index investing is up 2000% in the last 5 years. That should be a red flag for everyone. Most of it is not the government, folks. Its this bunch of retards that's causing your high fuel prices.

reply to post by vor78


I don't know, I think the guys like Soros will be more likely to take their money out soon since they think it is about topped out, then putting put options in on oil and popping the bubble themselves. If they can bring it about, they stand to make a fortune off of a well timed stock market crash.

reply to post by Karlhungis


Technically, you're right. He can short the market and make a fortune. However, I think they're finally waking up to the fact that if the US economy tanks and slides into a depression as some are predicting, its going to take the entire world economy down the toilet with it. There will be no safe havens for his money if that happens.

Not only that, but there has been talk that the wealthy are just doing this in order to completely wipe out the middle class. I think that's actually an unintented adverse consequence and now, they're realizing it. No, if this thing goes under completely, there's going to be a segment of the population that take their proverbial torches and pitchforks to anyone they even think is to blame for a worldwide economic depression.

In the end, I think that what you're seeing here is a case of a drunken party, followed by a one-night stand with the local beauty queen Now, its the morning after, and they've just rolled over and taken a look at that 'beauty queen', and now that they've sobered up, they see that she's actually 60 years old, ugly, crosseyed and has three of her otherwise green teeth missing.