Commodity ETFs: Toxic, deadly, evil (Next crash dead ahead, bigger than dot-coms, subprimes)

[marmar]

By Paul B. Farrell, MarketWatch


ARROYO GRANDE, Calif. (MarketWatch) -- The warning screams at you: "Do Not Buy Commodity ETFs!" Yes, this Bloomberg BusinessWeek cover reads like National Enquirer or a flashing neon sign on the Vegas Strip.

And just in case you didn't get the warning, B/W repeats it twice more, on the cover: "Do Not Buy Commodity ETFs ... Do Not Buy Commodity ETFs." Then, as if afraid you still won't get it, they scream even louder: Commodity ETFs are "America's worst investment."

Worst? Add toxic, deadly, evil. Commodity ETFs are rapidly becoming a malicious virus breeding chaos in the global markets pricing all commodities: food, farm lands, metals, oil, natural gas, livestock, water and other natural resources are the assets under commodity derivatives and their ETFs, pricing that's now controlled more by Wall Street speculators than the weather, adding wild swings in volatility and trillions in global derivative risks.

And once again the usual suspects, the Goldman Conspiracy of Wall Street Banksters, are in the lead.

Today, Wall Street is making a killing on commodity ETFs. And yet at the same time they are rapidly accelerating global market conditions that'll eventually kill the goose that laid their golden egg, those high-profit-generating commodity ETFs. But unfortunately this new ideology, Chaos Capitalism, is rapidly moving past economic pricing wars into military conflicts, a trend the Pentagon predicted years ago, an ever-increasing cycle of global wars over increasingly scarce nonrenewable commodities.

'Next financial time-bomb ... stuffed with derivatives'

In Bloomberg Markets' "ETFs Gone Wild," investors are warned that many ETFs are "stuffed with exotic derivatives," at risk of becoming "the next financial time bomb." In short, thanks to ETFs, Wall Street is already creating a dangerous new kind of global weapon of mass destruction -- a bomb primed to detonate like the 2000 dot-coms, the 2008 subprimes -- and detonation is dead ahead. ............(more)

The complete piece is at: http://www.marketwatch.com/story/commodity-etfs-toxic-deadly-evil-2010-08-03

[Lasher]

1. I had thought that after all this we would have had the sense to at least outlaw derivative trading.

And I didn't think it was too much to hope that we would repeal the Gramm–Leach–Bliley Act. Go figure.

[izquierdista]

2. Saturday morning tidying up

The financial regulation bill can be compared to tidying up the frathouse on Saturday morning after a wild Friday night party. The broken beer bottles and piles of puke need to be gotten rid of and the house aired out before the Saturday night, even wilder, party starts. But expecting Wall Street to clean up its act is like expecting frat boys to quit drinking.

[Lasher]

3. This tells me we've just wasted all that moral hazard money.

Starting with the S&L crisis, and after that the subprime debacle, and next with some future too big to fail calamity that will leave everybody except the elite 1% even worse off.