by Chidem Kurdas Less than two months ago, President Obama claimed that speculators were (or at least might be) artificially driving up the price of oil—a notion that some politician or pundit brings up every time gasoline looks expensive. The idea fades when the market changes direction. Thus in recent weeks, economies worldwide took a … Continue reading Remember Those Oil Speculators?
by Chidem Kurdas My previous post about government restrictions on oil and gasoline transportation drew comments saying prices are set in a world market and the effect of United States policy is negligible. Numerous economic and geopolitical forces influence the price of oil, no question. That does not change the fact that the Jones Act … Continue reading Oil Price Politics Implication
By Chidem Kurdas Media coverage compounds the confusion about financial problems. Take a recent piece by Floyd Norris, probably the best informed of the New York Times finance columnists. “Credit-default swaps are, in reality, insurance,” he writes in “Naked Truth on Default Swaps”. The seller of a credit default swap pays the buyer of the … Continue reading Naked Truth on NYT Finance Column
by Chidem Kurdas Greek prime minister George Papandreou demands a crackdown on credit default swaps. It’s easy to see why politicians bring up wicked speculators whenever some economic hardship shows up. It’s an old game to put the blame on others to deflect it from yourself. Middlemen have been successfully pilloried for millennia. Ancient Athenians, … Continue reading Why We Need More Speculators
by Chidem Kurdas You’d think that the federal government wants Citigroup to return to financial health—if for no other reason to recoup the $45 billion of taxpayer money spent to shore up the bank in the credit freeze. You’d think the government wants a real effort to boost efficiency and profits. You’d be wrong. What … Continue reading Citi Phibro Selloff Shows Government Sham
Chidem Kurdas President Obama’s choice to head the Commodity Futures Trading Commission, Gary Gensler, reassured members of Congress that he is committed to fighting speculation. Thus continues the political game that started in early 2008 when oil prices climbed to $148 a barrel. Pundits and politicians blamed financial speculators. The price of oil collapsed in … Continue reading Commodity Politics