Michael Perelman <[email protected]> wrote: > ... what happened with the debate about whether speculation or > market manipulation could affect oil prices? I'm wondering because of the > recent discussion about the urgency of preventing shortselling. Why would > shortselling in stocks have an effect, but not speculation in oil?
I don't know about that, but Randy Wray had a good explanation of the run-up of oil prices (up to mid 2008). As I said in an earlier pen-l missive: >>Randy Wray presented a talk on the current financial crisis. As usual, his talk was extremely interesting and useful. Crucially, he pointed to a simple explanation for the roller-coaster behavior of the markets for commodities (oil, etc.) in recent years. Organizations such as pension funds were allowed by deregulation not only to invest their funds in commodities, but in commodity futures. Like fools, they rushed in, buying oil futures and the like. This drove prices very high. Then then pulled their funds out, having an obvious negative effect on prices. >>This explanation, as I see it, is more satisfying than simple reference to speculation: first, the _new_ speculators rush in (with new money) and then they rush out.<< The old speculators' activities would exaggerate the resulting fluctuations. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
