By Hashem Kalentari Tue Jun 17, 2:59 AM ET
ISFAHAN, Iran (Reuters) - The market is full of oil and the rising price trend is "fake and imposed," Iran's president said on Tuesday, partly blaming a weak U.S. dollar which he said was being pushed lower on purpose.
"At a time when the growth of consumption is lower than the growth of production and the market is full of oil, prices are rising and this trend is completely fake and imposed," President Mahmoud Ahmadinejad said in a televised speech.
"It is very clear that visible and invisible hands are controlling prices in a fake way with political and economic aims," he said when opening a meeting of the OPEC Fund for International Development in the central Iranian city of Isfahan.
Iran, the world's fourth-largest oil exporter, has repeatedly said the market is well-supplied with crude and blames rising prices on speculation, a weak U.S. currency and geopolitical factors.
"As you know the decrease in the dollar's value and the increase in energy prices are two sides of the same coin which are being introduced as factors behind the recent instability," Ahmadinejad said.
Oil steadied on Tuesday after touching a record near $140 the previous day, with traders caught between a weaker dollar and expectations that top exporter Saudi Arabia will ramp up output to its highest rate in decades.
Iran has often said it sees no need for the Organization of the Petroleum Exporting Countries (OPEC) to boost output.
Ahmadinejad reiterated his view that oil should be sold in a basket of currencies rather than U.S. dollars, an idea which has failed to win over other OPEC members, except Venezuela.
"The ever-increasing decrease in the dollar's value is one of the world's major problems," he said.
"A combination of the world's valid currencies should become a basis for oil transactions or (OPEC) member countries should determine a new currency for oil transactions," he said.
Iran, embroiled in a standoff with the West over its nuclear program, has for more than two years been increasing its sales of oil for currencies other than the dollar, saying the weak U.S. currency is eroding its purchasing power.
Ahmadinejad, who in the past has called the dollar a "worthless piece of paper," suggested "some big powers" were driving it lower on purpose:
"The planners for some big powers are acting to decrease the dollar's value," he said. "For years they imposed inflation and their own economic problems to other nations by injecting the dollar without any support to the global economy."
Foes since Iran's 1979 Islamic revolution, Tehran and Washington are also at odds over Tehran's disputed nuclear activities as well as over policy in Iraq. Iran says its atomic work is peaceful.
(Additional reporting by Zahra Hosseinian in Tehran; Writing by Fredrik Dahl; Editing by William Hardy)
Its not the farmers who set the prices its the shopping centres
how is it with oil we think its the other way round?
THE OIL COMPANIES DO IT.
AND MARKET SPECTULATORS TOO......
not the oil producers.....
AND WHY ARE THESE SAME FORCES PUSHING UP THE PRICE OF FOOD
AS WELL AS THE PRICE OF MONEY (LOANS) ?
WHO IS ENGINEERING ANOTHER RECESSION?
Zionist Banksters Are Behind The Oil/Fuel Crisis
June is Bustin’ Oil All Over!
June 18, 2008
According to Rep Peter DeFazio (D-Or), the entity that owns the most oil in the United States right now is not ExxonMobil or Chevron or Valero: it’s Morgan Stanley. So what’s Morgan Stanley doing with all that oil? Speculating on the petrofraud bonanza.
The problems with the short-sightedness of this utterly stupid investment pattern are many:
1. The faster they ratchet up the cost of oil, and, in turn, the gasoline that comes from it, the faster the public will change its patterns of consumption, the demand will go down, and the bottom will fall out of the market. That is the most logical supply-and-demand scenario, which ends in Morgan Stanley left holding billions of dollars of lost equity on the oil futures contracts. Note that Ford, GM. and Toyota – so far – have shuttered factories building large SUVs and trucks (the behemoth Toyota Tundra got axed today), thus, even the opportunity to continue buying these gas guzzlers has begun to be eliminated. GM has already hybridized the most ostentatious gas sucker of them all – the Cadillac Escalade – thus more than doubling the city mileage of that vehicle.
2. There is no reason for oil prices to be what they are, because there is no shortage. If there were a shortage, there would be rationing and/or gas lines. We have been through genuine shortages, most recently in 1979. In 1979, the price of gasoline increased from 69¢/gallon to 99¢/gallon, while an OPEC embargo was keeping the flow to a trickle. That was an increase of 43%. With no embargo, why has gasoline gone up over 100% in the past year (it is roughly $5/gallon in Los Angeles today, and was less than $2.50/gallon a year ago)?
3. The curves of a bubble are predictable, and this one, as was discussed here last month in Blowing Bubbles, is following in the pattern of several previous bubbles. Only this bubble, according to the economists at Bloomberg happens to be exceeding the curve of the dot.com bubble, which, when it burst, caused a loss of SIX TRILLION DOLLARS. Let me repeat. This bubble exceeds that one.
4. The “Enron Exemption”, part of a commodities trading legislation written by former Senator Phil Gramm (now John McCain’s economics advisor), has enabled the kind of under-regulated commodities trading that is still happening in energy markets. Enron was a private company engaging in capitalism without ethics (remember those?); the devastation was limited to the energy consumers in California (38 million people) who had to empty their wallets to cool their homes during a blistering hot summer, and, ultimately, investors, employees and the auditing firm that oversaw the criminality. The present oil bubble is dearly costing every driver in North America, Europe and Asia, and will, upon bursting take down Morgan Stanley and several other large investment companies that are deeply invested in oil futures, and with them, millions of investors.
5. The Oil Ministers of Saudi Arabia, Kuwait, and even the President of Iran have all said that there is no reason for the present trading price of oil. Well, they don’t get paid that price for most of the oil that is pumped from their soil (they are paid a fractional royalty), but they are, of course, making vulgar amounts of money from this bubble. They clearly, however, can see that the end result will be the reduction of demand, and after the inevitable price decline, they will suffer long-term.
6. As certain as I am about the forthcoming collapse of this bubble, is how certain I am that the price of gasoline will plummet after Labor Day (Sept. 1). The powers-that-be will want you to have forgotten the “pain at the pump” by Election Day. But you won’t forget. How could you? If you have any retirement savings or oil stocks, you will be broke. If you have a gas guzzling car it will have no resale value. And while the Fed may bail out still more investment houses (thus further devaluating the dollar) they will not bail you out. You won’t get a dime back.
June 18, 2008
Morgan Stanley Vice Chairman Honored By The American Jewish Committee
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The American Jewish Committee last month presented its Judge Learned Hand Award to David W. Heleniak, vice chairman of Morgan Stanley.
The presentation took place on June 23 at a dinner at the Pierre Hotel in New York City.
From 2001 to 2005, Mr. Heleniak was a senior partner at Shearman & Sterling LLP and a member of its Mergers & Acquisitions Group, which he headed or co-headed from 1987 to 1995. From 1981 to 1984, Mr. Heleniak headed Sherman & Sterling's Hong Kong office and represented China National Coal Development Corporation in China's first major joint venture with a Western corporation.
From 1977 to 1979, he served the U.S. government in the Department of the Treasury, first as executive assistant to the deputy secretary and subsequently as assistant general counsel (domestic finance).
Among his numerous philanthropic and civic affiliations, Mr. Heleniak is a member of the boards of directors of the New York City Partnership, the New York City Ballet, the Legal Aid Society, the Japan Society, and the Council fort the United States and Italy, and a member of the Council on Foreign Relations.
Government and action against futures speculation
By Jeffrey H. Birnbaum
Washington Post Staff Writer
Thursday, June 19, 2008; Page D01
Wall Street banks and other large financial institutions have begun putting intense pressure on Congress to hold off on legislation that would curtail their highly profitable trading in oil contracts — an activity increasingly blamed by lawmakers for driving up prices to record levels.
Representatives of Goldman Sachs and Morgan Stanley, along with the trade associations for hedge funds and other financial groups, have lobbied the offices of key legislators, briefed senior staffers on committees that oversee pivotal parts of the energy markets and distributed research materials explaining their view about oil and how it’s traded.
In a pair of lengthy and sometimes testy, closed-door sessions in the Senate last week, executives from Goldman Sachs and Morgan Stanley, two of Wall Street’s largest investment banks, made the case that their multibillion-dollar investments in energy contracts have not led to higher oil prices. Rather, they told Democratic staff members of the Energy and Natural Resources Committee, a panel responsible for energy policy, that the trades allow international markets to operate efficiently and that the run-up in oil prices results not from speculation but from actual imbalances of supply and demand.
But the executives were met with skepticism and occasional hostility. “Spare us your lecture about supply and demand,” one of the Democratic aides said, abruptly cutting off one of the executives, according to a staff member in the room.
Another aide at the meetings warned the executives that no matter what arguments they muster, it would be hard to prevent Congress from acting. Referring to a vote earlier this year to impose new mileage standards on automobile makers, the aide said, “At 90 bucks a barrel, Congress rolled the autos for the first time in 30 years — is it too much to think that Congress will impose more restrictions on you if oil goes to $150 dollars a barrel?”
Goldman and Morgan declined to comment about the meetings.
Separately, lobbyists for the International Swaps and Derivatives Association (ISDA) and other financial entities such as hedge funds roamed through congressional office buildings this month and, in the Senate, left behind short policy statements that defended the current state of regulation. “Blaming speculation for the increase in energy prices is to confuse causation and correlation,” one of the documents said.
A second document, or “talker,” asserted: “Congress and regulators have acted to strengthen oversight of the energy markets. Give the new authorities time to work.”
But time is running short. The Commodity Futures Trading Commission, the federal agency that regulates oil trading, has drawn the increasing ire of lawmakers for exempting financial firms from rules that limit speculative buying, a prerogative usually reserved for airlines and trucking companies that need to lock in future fuel costs. The CFTC has also waived regulations on U.S. investors who trade commodities on some overseas markets, allowing them to accumulate large quantities of the future oil supply by making purchases on lightly regulated foreign exchanges.
Under pressure from lawmakers, the CFTC and its British counterpart agreed Tuesday to impose new limits on the trading of the United States’ benchmark oil contract on a London exchange. Such trading of West Texas Intermediate oil contracts has been occurring beyond the purview of U.S. regulators on the London platform, the Intercontinental Exchange.
The move did not go far enough to satisfy some Democrats who criticized the CFTC for abdicating the job of policing overseas oil traders to the Intercontinental Exchange.
Until recently, Congress had been reluctant to intervene in the energy futures markets, and the lobbying by financial entities has been a major reason. “We have known since 2001 that there were problems here, but we’ve run up against people on Wall Street who don’t want to be helpful in policing the market,” said Sen. Maria Cantwell (D-Wash.), one of several lawmakers frustrated by the effectiveness of the financial lobby.