05-06-2011, 04:27 AM
Crude has not always been financialized the way it is now.
Think mortgages. The terms of speculation have changed. We need someone who knows what contango and backwardation mean to explain all of this...I can't. I just know I hate it when it's costing $70 to fill the tank - dang!
So when we say "speculators are driving prices up" it's not that anyone is doing anything intentionally or that any person or institution is to blame, it's what they are allowed to do now on Wall Street.
We've seen this play before and the ending wasn't good. Not all creative investment vehicles are good for the economy.
Think mortgages. The terms of speculation have changed. We need someone who knows what contango and backwardation mean to explain all of this...I can't. I just know I hate it when it's costing $70 to fill the tank - dang!
So when we say "speculators are driving prices up" it's not that anyone is doing anything intentionally or that any person or institution is to blame, it's what they are allowed to do now on Wall Street.
We've seen this play before and the ending wasn't good. Not all creative investment vehicles are good for the economy.