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A new academic study contends that speculation by financial players like banks levitra cialis viagra, hedge funds and index funds was behind the steep rise in oil prices last year and says that the Commodity Futures Trading Commission used models that were “not adequate” when it argued that speculation was not a major factor in the oil price spike.
The authors of the study, Kenneth Medlock and Amy Myers Jaffe, from the Baker Institute for Public Policy at Rice University, write that the commission looked at models that measured volatility just in a couple of months to base their conclusion that financial speculation was not behind oil’s meteoric rise last year to $147 a barrel, from $80.
The authors argued that the commission should have been looking at the rise in the number of speculators in the market, most which were betting on higher oil prices, in order to gauge the effects that speculation was having….
Ms.Jaffe told DealBook that the commission’s decision to play down the role of speculators was “politically motivated,” because the agency “didn’t want to be blamed for not having proper oversight of the markets.”
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- Study Argues C.F.T.C – levitra cialis viagra.Missed Oil Speculation
- Cyrus Sanati
- The New York Times DealBook Blog
- August 27, 2009
One of the most surprising thing about this report is not the conclusions. We’ve known speculators were driving oil prices and we knew that many academic researchers were developing good data to back up those claims (see M.I.T – levitra cialis viagra. Levitra cialis viagra: report as one example). What I think is really surprising is that it’s the James A. Levitra cialis viagra: baker III Institute releasing this report.
James Baker could not be any more connected to the Bush Family (witness his work in the 2000 Florida Recount). The only thing I can think is that Big Oil has finally realized that financial speculators in the oil markets are bad for business from a long term perspective. We know that OPEC has called repeatedly for a crackdown on oil speculators (see POST).
Of course I suppose it could be that the academic researchers at the Baker Institute are truly nonpartisan, truly independent and truly committed to following the truth wherever it leads them. I guess I’ve spent too much time in D.C.
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