High Oil Prices, Commodity Prices, Emerging Market Prices....The Cause

L

libertad

It was mostly the high leverage offered to hedge funds which were the clients of Goldman Sachs, Morgan Stanley, Lehman, and Bear Stearns...etc....

Proof positive.....

This is very simple....Goldman Sachs, and Morgan Stanley had over 70% of the prime broker business providing the leverage to hedge funds....

When Goldman and Morgan became banks.....the leverage that was made available to hedge funds was called in.....

What happened ?

Oil down from $147 to $62....

Emerging markets....down 50 to over 70%.....

........................................

While all along...these firms kept insisting that it was supply demand that kept prices high....

Pure bullshit.....
.............................................

In addition...it was these very same firms that made it possible to distribute CCC real estate debt to banks throughout the world.....

Which at the end of the day.....has created financial devastation ...the likes of the world has never known....
...............................................

Now at the moment....one of the instigators of marketing "all of the above"....now has a free checkwriting account from the US Treasury.....to preserve the very firms that should be penalized out of existance....some deserving jail time.....
.................................................

This is proof positive that both excessive leverage....and faulty vehicles run by people who could give a shit less about hungry people and average workers...and for that matter emerging countries......are the cause of the recent financial disaster....

Furthermore these firms have first look of all the positions of the hedge funds ....and could also trade for their own accounts with the same or higher leverage.....
....................................................

Solution....

Eliminate the leverage that is excessive to more normal supply demand aspects of the oil, food, and emerging market markets....
..........................................

Also these companies continually talk their books on the public media such as Bloomberg, etc.....
..........................................

Obviously...this is a leverage and regulatory problem....but unfortunately the very employees of these firms infest the employment by the US Govt......namely the Sec/Treas....

..................................................

http://www.nakedcapitalism.com/2008/10/emerging-markets-capital-flight.html

...................................................

What should be done about it ?

..................................................

Looks like there will be plenty of opportunity for new firms....armed with a lot less leverage......

Damages .....and how to recover them ?

The legal fights are going to be all over the place for many years...

..................................................

Yeah....high oil prices was supply/demand alright..

It was the supply of leverage....and the demand by hedge funds.....

Proven....done....over and out......
 
Quote from libertad:

It was mostly the high leverage offered to hedge funds which were the clients of Goldman Sachs, Morgan Stanley, Lehman, and Bear Stearns...etc....

Proof positive.....

This is very simple....Goldman Sachs, and Morgan Stanley had over 70% of the prime broker business providing the leverage to hedge funds....

When Goldman and Morgan became banks.....the leverage that was made available to hedge funds was called in.....

What happened ?

Oil down from $147 to $62....

Emerging markets....down 50 to over 70%.....

........................................

While all along...these firms kept insisting that it was supply demand that kept prices high....

Pure bullshit.....
.............................................

In addition...it was these very same firms that made it possible to distribute CCC real estate debt to banks throughout the world.....

Which at the end of the day.....has created financial devastation ...the likes of the world has never known....
...............................................

Now at the moment....one of the instigators of marketing "all of the above"....now has a free checkwriting account from the US Treasury.....to preserve the very firms that should be penalized out of existance....some deserving jail time.....
.................................................

This is proof positive that both excessive leverage....and faulty vehicles run by people who could give a shit less about hungry people and average workers...and for that matter emerging countries......are the cause of the recent financial disaster....

Furthermore these firms have first look of all the positions of the hedge funds ....and could also trade for their own accounts with the same or higher leverage.....
....................................................

Solution....

Eliminate the leverage that is excessive to more normal supply demand aspects of the oil, food, and emerging market markets....
..........................................

Also these companies continually talk their books on the public media such as Bloomberg, etc.....
..........................................

Obviously...this is a leverage and regulatory problem....but unfortunately the very employees of these firms infest the employment by the US Govt......namely the Sec/Treas....

..................................................

http://www.nakedcapitalism.com/2008/10/emerging-markets-capital-flight.html

...................................................

What should be done about it ?

..................................................

Looks like there will be plenty of opportunity for new firms....armed with a lot less leverage......

Damages .....and how to recover them ?

The legal fights are going to be all over the place for many years...

..................................................

Yeah....high oil prices was supply/demand alright..

It was the supply of leverage....and the demand by hedge funds.....

Proven....done....over and out......
More...

100% correct.
 
I agree with you somewhat, but this is something that needs to be done slowly or you'll see more and worse storms than what we've had.

I had a conversation with someone on one of the message boards for moms that I'm on. She was consistently saying that the government needs to clean things up because they've "legislated in greed to the system." I talked about no, the greed's always there, she's greedy too because she worries about a better life for her family. What their mistake is is that they've legislated *out* the fear. Allowed banks and people to take excessive risks, and when that risk goes against them, they get bailed out or their slates get wiped clean with bankruptcy. From how she responded, it seems like something finally clicked.

I agree with many of the tenets of libertarianism, but what I question is whether it can co-exist with human nature for very long. We have a tendency to "fix" things and we are compassionate for the most part, so we go to people when they are suffering and offer whatever help we can. When the government does this, though, those are the roots of socialism, and once that starts, well I think it's hard to unwind it without total revolution.
 
Quote from libertad:

It was mostly the high leverage offered to hedge funds which were the clients of Goldman Sachs, Morgan Stanley, Lehman, and Bear Stearns...etc....

Proof positive.....



Proven....done....over and out......
More...





most of the herd have blown up.

now the survivors face stringent over sight and regulation.

about time too.

btw, whatever happened to the retards screaming "peak oil"?
 
In the "Happy Birthday" SA Post...today.....


The real question at hand is one concerning the velocity and availability of money....

To simplify....let's look at blanket prices for three types of economies.....and how one economy type moves to another....

The three types...

Highly levered...in all aspects.....from the family unit to the corporation to the government...


Moderately levered.....


Not levered......

................................................

Also one should distinguish from the different types of countries....

Advanced....when family, corporate, and government are levered....

Emerging....when corporate and government are levered....

Third World....
When government is levered....
......................................................

The US....along with some European countries could very well describe the increase in their economies as attributable to debt.....and not savings.....

When the advanced stage fails....then the emerging stage is entered....and when the emerging stage fails...then the third world category is entered....
.........................................................

The obvious position that the US and Euro countries will be entering will be a lower leverage advanced economy....perhaps 2/3's less leverage than before.....

This means that there are a lot of prices that have to adjust downward....
....................................................

The solution is not for the government to try to preserve prices that were in the highly levered stage....but to accept that prices will move to the lower levered stage....and must allow for it to happen.....

Any additional costs of trying to moderate this change ....just will end up as more costs to be paid by those that can....many years later....
.....................................................

Thus the solution either involves a social one...or a capitalistic one....

The capitalistic one allows for more property rights, gains, and losses to individuals.....

The social one....just allows the individual to have some work....but the state owns the firm....
 
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