Obama team to probe oil market manipulation
April 21, 2011 5:33 PM Subscribe
Fraud in the oil markets? Previously discussed on this thread, where I posted this link to show how commodity traders are responsible for massive pestilence and price manipulation just for *their* benefit. I think it's revealing to see how the oil commodity folks are pointing fingers at everyone but themselves, and how they are the ones that too often cause people to have to go into hock, leading to poorly leveraged loans to simply keep themselves alive.
Here's an excerpt:
"The impacts of commodity speculation:
"The increase in the price of food has been disastrous for people across the world. There were 75 million more hungry people in 2007 and a further 40 million in 2008.[7] The latest estimate by FAO in June 2009 was that over one billion people are now chronically malnourished due to 'the global economic slowdown combined with stubbornly high food prices'.[8]
"But the impact of high prices goes well beyond not getting enough to eat. Poor households in Southern countries tend to spend between 50% and 90% of their income on food, compared to an average of 10-15% in Northern countries.[9] It is estimated that the food price spike increased the number living in poverty by between 100 and 200 million.[10] As well as eating less food, households have been forced to:
* Eat less fruit, vegetables, dairy products and meat in order to afford staple foods.
* Reduce any savings, sell assets or take out loans.
* Reduce spending on 'luxuries' such as healthcare, education or family planning.[11]
"Women tend to manage the food budget and often bear much of the suffering. Women may also try to increase income through taking on insecure and risky employment such as becoming domestic workers, mail-order brides and sex workers.[12]
"High food prices affect poor farmers as well as the urban poor. A high percentage of rural households are net buyers of staple foods. In Kenya and Mozambique, around 60% of rural householders are net buyers of maize.[13] Very few poor farmers produce a significant surplus to sell.[14] In Zambia, 80% of farm households grow maize, but fewer than 30% sell any.[15] In addition, any increase in income was for many producers negated by increasing costs of farm inputs such as oil and fertiliser. The cost of fertiliser almost doubled in 2007 and 2008.[16]
"Furthermore, in general terms wild price swings make it difficult for farmers to make decisions about what crops to grow and in what they should invest precious resources. As Prof. Jayati Ghosh says: 'The world trade market in food has started behaving like any other financial market: it's full of information asymmetry . So farmers think, "Well, wow, the price of sugarcane is really high," and they go out there and cultivate lots of sugarcane. By the time their crop is harvested, the price has collapsed. So you get all kinds of misleading price signals. Farmers don't gain.'[17] "
..end excerpt...
Here's an excerpt:
"The impacts of commodity speculation:
"The increase in the price of food has been disastrous for people across the world. There were 75 million more hungry people in 2007 and a further 40 million in 2008.[7] The latest estimate by FAO in June 2009 was that over one billion people are now chronically malnourished due to 'the global economic slowdown combined with stubbornly high food prices'.[8]
"But the impact of high prices goes well beyond not getting enough to eat. Poor households in Southern countries tend to spend between 50% and 90% of their income on food, compared to an average of 10-15% in Northern countries.[9] It is estimated that the food price spike increased the number living in poverty by between 100 and 200 million.[10] As well as eating less food, households have been forced to:
* Eat less fruit, vegetables, dairy products and meat in order to afford staple foods.
* Reduce any savings, sell assets or take out loans.
* Reduce spending on 'luxuries' such as healthcare, education or family planning.[11]
"Women tend to manage the food budget and often bear much of the suffering. Women may also try to increase income through taking on insecure and risky employment such as becoming domestic workers, mail-order brides and sex workers.[12]
"High food prices affect poor farmers as well as the urban poor. A high percentage of rural households are net buyers of staple foods. In Kenya and Mozambique, around 60% of rural householders are net buyers of maize.[13] Very few poor farmers produce a significant surplus to sell.[14] In Zambia, 80% of farm households grow maize, but fewer than 30% sell any.[15] In addition, any increase in income was for many producers negated by increasing costs of farm inputs such as oil and fertiliser. The cost of fertiliser almost doubled in 2007 and 2008.[16]
"Furthermore, in general terms wild price swings make it difficult for farmers to make decisions about what crops to grow and in what they should invest precious resources. As Prof. Jayati Ghosh says: 'The world trade market in food has started behaving like any other financial market: it's full of information asymmetry . So farmers think, "Well, wow, the price of sugarcane is really high," and they go out there and cultivate lots of sugarcane. By the time their crop is harvested, the price has collapsed. So you get all kinds of misleading price signals. Farmers don't gain.'[17] "
..end excerpt...
This post was deleted for the following reason: as much as I sympathize with this article, it's a sinfgle link editorial that you've quoted at length on MeFi which is probably best suited to your own blog where you can editorialize all you want. -- jessamyn
I totally agree that this is a crime and something that deserves a little more attention, and I'm a jerk for derailing this early, but even an editorial on the front page that I agree with 100% is still an editorial on the front page.
That said, all of this information needs to come to light and the more light we shed on it the better, so I shant be flagging it, just lamely whinging in the comment section.
I'm having a banner week.
posted by Joey Michaels at 5:38 PM on April 21, 2011
That said, all of this information needs to come to light and the more light we shed on it the better, so I shant be flagging it, just lamely whinging in the comment section.
I'm having a banner week.
posted by Joey Michaels at 5:38 PM on April 21, 2011
And you do rock for bringing this to light, just FYI.
posted by Joey Michaels at 5:38 PM on April 21, 2011
posted by Joey Michaels at 5:38 PM on April 21, 2011
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posted by KokuRyu at 5:34 PM on April 21, 2011