<Burning Buried Sunshine The Oil Drum The World according to Gave>
<DrumBeat: September 27, 2006 DrumBeat DrumBeat: September 29, 2006>

302 comments on DrumBeat: September 28, 2006

Comments can no longer be added to this story.

Show without comments | PDF version

Will on September 28, 2006 - 10:49am Permalink | Subthread | Parent | Comments top
My point here is that there is no concerted effort to drop prices before the election. The level of complexity something like that would entail is mind-boggling.

Robert,

I would like to remind you that Enron managed to thoroughly corrupt the California energy market for many months. There were a number of "experts" who maintained such actvity was not possible and "market forces" were at work, etc... I am sure you are familiar with the details. They were widely reported in major news media.

I haven't read the RR/joule debate, but to indicate energy markets cannot be manipulated is unwise.

Comments can no longer be added to this story.
Leanan on September 28, 2006 - 11:18am Permalink | Subthread | Parent | Comments top
Hmmm.  Good point.  I wonder if the American public would be so willing to believe the prices are being manipulated if it weren't for Enron.
Comments can no longer be added to this story.
Robert Rapier on September 28, 2006 - 11:27am Permalink | Subthread | Parent | Comments top
I would like to remind you that Enron managed to thoroughly corrupt the California energy market for many months.

There is a vast difference between what Enron did in California, and managing to have a big impact on a global commodity that trades on an enormous scale. It's like saying because a warlord managed to take over a small part of Afghanistan, he could then take over the world.

I haven't read the RR/joule debate, but to indicate energy markets cannot be manipulated is unwise.

That's not what I said, even in the post that you just responded to.

Comments can no longer be added to this story.
Will on September 28, 2006 - 2:25pm Permalink | Subthread | Parent | Comments top
There is a vast difference between what Enron did in California, and managing to have a big impact on a global commodity that trades on an enormous scale.

I mean no disrespect here. I follow your contributions avidly. But I disagree. California is something like the 10th largest economy in the world. The scale of market manipulation there was profound... and it went on for a long while. During which... it was denied by very experienced finance professionals.

In the recent Amaranth case, Bloomberg reported that Hunter (the trader) had purchased, in some cases, 20% of the market's available positions. Nymex NG, though not global, is not a small market either. My point is that the technology, the leverages and the access to many, many billions of $$$ does exist. My disagreement has nothing to do with gasoline going up or down, it has to do with your assertion that oil is too big a commodity to manipulate. Nate Hagens reminds us twice a week that's it's the marginal barrel that prices the market.

It would be interesting to know how Goldman-Sachs traded the market in the run-up to reducing that allocation <g>.

Comments can no longer be added to this story.
jim burke on September 28, 2006 - 4:02pm Permalink | Subthread | Parent | Comments top
The reason people believe presidents have some power over the economy is that presidents have been claiming the power to do so for generations, and personally take the credit for good times in order to get reelected.

Of course this can backfire, as when the very good engineer and humanitarian Herbert Hoover tried to get reelected.

Comments can no longer be added to this story.
Dryki on September 28, 2006 - 2:29pm Permalink | Subthread | Parent | Comments top

Is my memory right that Reagan is credited with using oil prices to destabilize and ultimately crash the Soviet Union? Beyond that, isn't it part of what governments are supposed to do - to maintain market structures. Keeping the price of energy down, whether with the 7th Fleet or subsidies, is government action. It strikes me as meaningless to say that a government does not influence prices. Of course it does. But it's not going to happen at RR's level - the Saudi princes, do they take GWB's phone calls - of course they do. I'd not even be surprised if God doesn't tell him where to tell them to drill and find new reserves.

cfm in Gray, ME

Comments can no longer be added to this story.
GROK on September 29, 2006 - 1:03pm Permalink | Subthread | Parent | Comments top
Ronnie RayGun's <politically manipulated< the world oil market by having a secret deal with the swing producer, SA, to pump oil like mad to drive down world oil prices. Prices plumetted. The USSR was deprived of huge cash inflows that had been coming in from it's oil.  Within 5 years they, the USSR and it's empire, started to collapse.  The SA"s got the high tech fighter planes, communication, promises of defense if the kingdom was challenged.  They called that chip in after the invasion of kuwait by So-Damn-Insane of Iraq.<p> Of course SA seems to be producing all out so this particular scenario is unlikely.  Are there other scenarios?  Likely.
Comments can no longer be added to this story.
davidsmi on September 29, 2006 - 1:39pm Permalink | Subthread | Parent | Comments top
Don't forget that we were also in an arms race and we kept upping the ante so that they reached a point where they were spending an unsustainable portion of their national budget on the military. I've seen some estimates that it may have reached as much as half of the entire economy of the Soviet Union.
Comments can no longer be added to this story.

302 comments on DrumBeat: September 28, 2006

Comments can no longer be added to this story.

Show without comments | PDF version