How Wall Street Will Kill the Recovery

[Nikki Stone1]

http://www.businessweek.com/print/lifestyle/content/oct2009/bw20091020_523614.htm

Viewpoint October 20, 2009, 5:00PM EST text size: TT
How Wall Street Will Kill the Recovery
Wall Street is taking much of its federal money and using it to again speculate in the oil market. That's bad for everybody

By Ed Wallace

Wall Street is up to its old tricks again.

One year later, one of the key excesses that led our consumer-based economy into an historic downturn is being abused in the exact same way that got us $147-a-barrel oil last summer. Worse, many in the media are again getting the facts wrong on oil prices and demand—as if the oil and gasoline price explosion of 2005-2008 never happened—as one look at last week's oil report will verify.

Forget what Cambridge Energy Research Associates reported on Oct. 13. By its calculations oil demand actually peaked in 2005 among the industrialized members of the Organization for Economic Cooperation, while in the U.S. alone oil usage has dropped by 2 million barrels a day compared with 2005. But remember these facts: As of this writing, U.S. supplies of refined distillates, including diesel, heating oil, and aviation fuel, are at a 25-year high. We have 29.56 million more barrels of oil in our inventories than we had the same week a year ago, and refined gasoline on hand is up 16.37 million barrels for the same period. And this does not include the 125 million barrels of oil that the Secretary General of OPEC says are being held offshore in tankers.

Skewing in Public

In fact, the market is skewed by the high inventories of refined products. Last week, the Energy Information Administration showed that refinery utilization rates fell by over 4%, to 80.9%, yet oil jumped $2 a barrel on the news that our gasoline inventories fell by 5.2 million barrels.

That was the dark side of the futures market making its move: Oil should have fallen just because, according to the American Petroleum Institute, refinery crude runs fell by 511,000 barrels per day (validating that 4% drop in utilization). In short, refineries determine oil demand, and in that week demand for more oil was off substantially—yet the market bid crude up. ....

[Odin2005]

1. Insanity: doing the same thing over again and expecting a different result.

[Nikki Stone1]

3. Nail hit on head.

Could it merely be by design?

[malaise]

4. Is that stupidity or

insanity?

[Odin2005]

8. Both.

[ldf]

24. it is neither stupidity nor insanity

the market is doing EXACTLY what its manipulators want.

it is a scam.

it is like wall street using one reported economic stat one day for the drop in the market, and using the exact same stat another day to justify the rise in the market. its all a scam. hyping and dumping, by big money people who create the hype, and know when to dump. now they have the computer programs do it for them.

we will never have access to those computer programs, we are just the ones footing the bill.

[FreakinDJ]

6. You mean "Insanity is doing the same thing twice and expecting different results

Maybe Cheney can go hunting with some Wall St Speculators this time

[Odin2005]

9. LOL, yes, thank you for the correction!

[TheWatcher]

2. You can't kill something that never existed in the first place.

Just sayin'.

[Nikki Stone1]

5. You don't believe in the "green shoots" theory?

;)

[TheWatcher]

25. It would appear that most of those "green shoots" turned out to be Weeds.

:)

[AllentownJake]

26. Dandelions

If your PA dutch you can still make a salad out of them though :rofl:

[TheWatcher]

28. Can I have that with Fava Beans and a nice Chianti?

:evilgrin:



(That kind of looks like Geithner if you look at it just right. Or Maybe it's Ben with hair.)

[AllentownJake]

29. Probably his biological father

:rofl:

[TheWatcher]

32. Nah, I think THIS is his Biological Father

http://1.bp.blogspot.com/_LYn2HyjMR68/SkkNoZ9MztI/AAAAAAAABr8/xDRi-BF-6Bs/s320/Jason+Voorhees.jpg

:rofl:

[AllentownJake]

33. Wrong guy

:rofl:

[TheWatcher]

34. PERFECT!!!!!!!!!!!!!!!!!!

Only I don't think he's looking for his Gold.

He's looking for his Derivatives. :rofl:

[Nikki Stone1]

37. lol!!

:D

[AllentownJake]

7. Let me see

a bunch of WASP gamblers and thieves went to the US Congress demanding $700 billion dollar loans and 0 interest loans from the federal reserve or they would destroy everyone's retirement and cause chaos that would require martial law and the US Congress gave it to them, and now they are gambling with the money they got and stealing more. Who would have thought they would do such a thing :shrug:

[Odin2005]

10. maybe I'm just naive and stupid, but it seems to me that people panicked.

Then realized the stupidity of what they did, and tried to rationalize what they did to save face and so to not have people come after them with torches and pitchforks.

of course that is not to say there were not elements who used the panic to intentionally enrich their buddies.

[AllentownJake]

11. When the Sec. of Treasury

Has you in a room, and he's telling you the economic world will end if you don't do something you are stuck between a rock and a hard place. If you don't do what he says and the economic world ends you are left with the consequences of destroying the lives of millions of people and you were warned.

Hank Paulson was a liar. What happened to this country in September/October of 2008 looks like something that the CIA would carry out. It had to be done at that particular time because as much as I critique the Obama administration, President Obama would be asking a lot more question than George W. Bush and would have got a second opinion before he authorized his Treasury Secretary to do something like this. It also had to be done right before an election.

That being said, Barack Obama's Treasury Secretary was a co-conspirator of the heist.

[Odin2005]

12. Paulson should be in jail.

[AllentownJake]

14. So should Geithner and Bernake

People around here think I'm some sort of Obama hater because I'm angry the President I worked my ass off for, for nine months made one of the perpetrators of the biggest fraud in American History Treasury Secretary and the other person a reappointment as head of the federal reserve.

[Nikki Stone1]

18. And Greenspan

He should actually be tarred and feathered but I'll settle for Wackenhut.

[AllentownJake]

21. Greenspan is acting weird lately

talking about nationalizing banks, the need for strong regulations, and breaking up to big to fail. I wonder if he burned his copy of Atlas Shrugged.

[roamer65]

31. I understand his change in tone.

Nationalization would effectively make them Federal Reserve branch banks and thus direct liquidity conduits to the economy. The big banks are presently hoarding capital and thus exacerbating the credit crisis. He wants them out of the way and nationalization would accomplish it.

I am glad to hear that Greenspan is admitting the Nouriel Roubini is right on bank nationalization. Nouriel said the big banks are broken and should be nationalized many months ago.

[TheWatcher]

27. So should your Heroes Helo Ben and Goofy Geithner.

[charlie]

13. A-yup

They're also buying up life insurance policies and bundling them into bond packages for sale. Sorta like CDOs, remember them?

Expect life insurance premiums to go up, as policies that would ordinarily lapse live on as undead zombies until payout.

The speculative casino already killed us. Now once again re-invigorated with our money, they're selling our bones.

[Nikki Stone1]

15. I think phase two of the destruction of the economy is on the way

A planned demolition.

[AllentownJake]

17. I'm not really that big of a conspiracy theorist on this stuff

I'm more of the inclination of a deadly combination of greedy assholes and corrupt and inept government.

[glitch]

20. “In politics, nothing happens by accident. If it happens, you can bet it was planned that way.” FDR

I submit that in our highly politicized economy the same holds true.

[AllentownJake]

22. If it was planned

Our congresscritters weren't involved, they were mostly probably duped or bribed. These people couldn't run over a kitten and make it look like an accident.

[Nikki Stone1]

36. I'm with you on this one, glitch

:tinfoilhat: but there's a good reason for that hat....

[glitch]

38. Tin, the new black. :) nt

[Nikki Stone1]

39. We need a sardonic smilie.

That's the only one that will go with this comment.

[glitch]

40. I can't even picture how that would look, sardonic is not easy even IRL.

I hate it when you tell a joke and you get the "what do you mean" response. Or worse, the slightly frightened polite smile. :hi:

[Uben]

16. What I remember.....

...a bunch of those "speculating" on oil got burnt bad.....real bad. Millions of gallons sat in leased tankers when the prices started dropping, and that is not cheap. They were waiting for the prices to rise again so they could sell without taking a huge losses. Since prices have still not even gotten close to what they were last year, I assume they are still sitting on that oil, and if prices near the $100/bbl mark, we might see an instant glut from these guys selling off.
I suppose these speculators could be buying up futures to raise prices so they can sell their reserves, and that might be what we arfe seeing now, but I haven't been following it.

[Skink]

19. Tap the reserves.

Obama has got to stand up to this.

[Joe Fields]

23. Wall St. will not kill the recovery. (no, I'm not shillin')

First, there is no recovery to begin with. And there can be no recovery without jobs.

Second, another wave of approximately 5 million mortgages will default in the next two years.

Third, the credit pipeline is once again drying up. No money to loan. (Now, that DOES have something to do with Wall St.)

[roamer65]

30. There is no recovery. This will be a double-dip depression known as the Second Great Depression.

...but far worse than the first one. The federal gov'ts fiscal position was much stronger going into the First GD. We are now debt ridden, without much ability for stimulus spending after the current package. It will become evident that we are in it next year.

[Nikki Stone1]

35. Well that makes me happy.

:(

[DemReadingDU]

41. and we don't manufacture the things people will need

like clothes, shoes, appliances, tools, sheets, towels. And people need skills, like fixing things, gardening, cooking, sewing. The coming depression is going to be far worse than the first one.
:(