Friday was tough in world and US markets, no matter what measure you use. Despite their reliance on unreliable numbers, the US govt. still admitted to remarkably high unemployment figures, and oil took twice the largest jump per day of anything seen in decades. The equities markets responded with negative vigor.
Perhaps we’ve reached the point already when a serious conversation needs to be had about speculation in the energy markets. This is my polite way of saying: perhaps we should rid the energy markets of speculation by the vampires.
There’s nothing wrong with people in the actual market doing their best to hedge against future price increases (SW Airlines would be a great example), but one can honestly question whether we’ve now moved, in just a few weeks, from a time when the hedge etc. vampires are not just taking profit without contributing, but are actually endangering economic stability.
Kids in college learn that free markets generally increase stability; here, we have the opposite case. If the vampires drive inflation and threaten equity markets without contributing an economic good, it might be time to move to the next century in terms of market regulation.
By restricting market access in oil to those who actually use it, we would be doing the world a gigantic favor, when it was most needed. Everyone from the Saudis to the Bushes ought to get behind this one.