The way it was…. Below right: the way it is now….
We lost our ability to walk through walls this morning. That is a good thing!
FYI, our powers were not related to a wireless resonant energy link (now courtesy Intel).
Brace yourself: rant coming….
There’s an Enron II now, in the sense that one firm has held something like 11% of extant oil contracts through the recent price run-up. The firm is called Vitol, and the Wash Post says it’s Swiss-owned—and private (wonder what that means?). Here’s more:
CFTC documents show Vitol was one of the most active traders of oil on NYMEX as prices reached record levels. By June 6, for instance, Vitol had acquired a huge holding in oil contracts, betting prices would rise. The contracts were equal to 57.7 million barrels of oil — about three times the amount the United States consumes daily. That day, the price of oil spiked $11 to settle at $138.54. Oil prices eventually peaked at $147.27 a barrel on July 11 before falling back to settle at $114.98 yesterday.
The documents do not say how much Vitol put down to acquire this position, but under NYMEX rules, the down payment could have been as little as $1 billion, with the company borrowing the rest.
This is how our gov’t regulators—the CFTC or Commodity Futures Trading Commission—oversee things. Your tax dollars at work, and all that.
But wait! There’s more:
In the coming months, swap dealers expect to have yet another venue for oil speculation. The CFTC has stated it would not stand in the way of trading in U.S. oil contracts overseas in Dubai. Goldman Sachs and Vitol are among the major investors in this new exchange.
Watch your pocketbook! This can’t be good for any of us leetle peepull.