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Originally posted by trusername
Check out this video interview with Matt Taibbi of Rollin Stone Mag.
It's fascinating about 3 big bubbles dot com, housing/credit... but especially the more hidden "commodities bubble" - and Goldman Sach's role re our gas prices etc.
Really worth the look - I think.
firing back that Taibbi's piece is "an hysterical compilation of conspiracy theories" and a spokesman adding, "We reject the assertion that we are inflators of bubbles and profiteers in busts, and we are painfully conscious of the importance in being a force for good
In 1999, Bill Clinton Signed into law the Gramm-Leach-Bliley Act, allowing mega corporations, wielding ungodly sums of money, to merge together and begin speculating in the derivatives and OTC market. It also made the now famous credit default swaps legally impossible to regulate.
Adding to the volatility of the market, oil prices were soaring to never before imagined heights, due mostly to the speculative activities of institutions fomenting higher prices with their 10s of billions of capital and low margin requirements:
world consumption of oil at 87 million bpd was far exceeded by the "paper market" for oil, which equals about 1.36 billion bpd, or more than 15 times the actual market demand.
A study of the oil market by Masters Capital Management was released which claimed that speculation did significantly impact the market. The study stated that over $60 billion was invested in oil during the first 6 months of 2008, helping drive the price per barrel from $95 to $147 per barrel, and that by the beginning of September, $39 billion had been withdrawn by speculators, causing prices to fall.