Banksters pump up gas futures

There isn't any market driven reason for the price of gas to be rising this summer. In the current depressed economy the normal supply and demand dynamic isn't in play. And the refiners have plenty of excess capacity. It appears the Big Bank investors are driving up the price of crude.

U.S. crude-oil inventories are at their highest levels in almost two decades, and demand has fallen to a 10-year low, but crude oil prices have climbed more than 70 percent since mid-January to a six-month high of $62.04 on Wednesday. [...]

Big Wall Street banks such as Goldman Sachs & Co., Morgan Stanley and others are able to sidestep the regulations that limit investments in commodities such as oil, and they're investing on behalf of pension funds, endowments, hedge funds and other big institutional investors, in part as a hedge against rising inflation.

They can do this because they're not subject to the same position limits as regular commodities traders.

However, big Wall Street banks are exempt from these restrictions, and there also are no such limits in derivatives markets. These vast unregulated markets involve private contracts between swaps dealers — usually big Wall Street banks — and large investors. These dark markets, also called over-the-counter markets, are thought to be 10 times larger than the futures market, and they have no position limits and no regulation.

In other words, on the one hand the banksters are stuffing their pockets with taxpayer money to keep themselves in business and on the other they're actively sabotaging the recovery by bleeding the consumers on the commodities end by using the same sort of regulatory dodges that crashed the economy in the first place. This is the same market manipulation that is said to have caused the spike in natural gas prices last year.

I ask again, why are none these people in jail? [grahic]

[More posts daily at The Detroit News]