The New York markets ended up a few points today despite being weighted down by the major banks. Bank of America lost another 6% making for a 50% decline in stock value over the past year. There are continued worries about that trillion in sub-prime loans they hold and fears that attempts to unload divisions to raise cash may take place at fire sale prices leaving nothing but a zombie bank behind. If you look a little too close of course, all the Wall Street banks are really just zombies that have been animated by the printing presses of the Federal Reserve and lack a soul. That‘s not a problem though, bankers don‘t have souls to begin with.
Goldman Sachs stock dropped 5% on word their CEO, Lloyd Blankfein has lawyer-ed up with a high profile DC defense council. A company spokesman described that as “nothing unusual and standard operating procedure”. Well, every successful crime family needs a highly paid mouth-piece, so no, it’s nothing unusual. It’s likely that Blankfein wouldn’t be doing this unless there is a big criminal case coming out of the DOJ and Blankfein and Goldman Sachs’s interests are going in different directions. This is likely to either be bad news for the bank or very bad news for Blankfein.
Oil prices dropped sharply in early trading on news that Tripoli fell without a significant fight. Then the news was plastered with headlines that it could take many years to get Libyan oil production going again. This despite ongoing reports that the oil facilities have been largely in rebel hands from early on, didn’t suffer any damage and have continued in production.
Michelle Bachman has promised that President Bachman will provide 2.00 gasoline. (she’s starting to talk about herself in third person and she’s not in the Senate) No explanation of how, of course, but she blames Obama for the high price since gasoline was only 2.79 when he took office. In fact you could see gasoline at 2.00 if the Dodd-Frank Law is enforced as written. This would prohibit banks and hedge funds from trading in the futures market. The CEO of Exxon Mobil testified to Congress that 40% of the pump price was from this speculative trading on Wall Street.
The problem is that Republicans, especially the tea baggers like Bachman don’t believe in any regulation of the rich at anytime and are doing everything possible to make Dodd-Frank ineffective. Keep in mind that when you take 40% off to get down to the “real” price then you must consider what they added to the price to get the “inflated” price. The math is that Wall Street is adding fully 2/3 to the price of gasoline. That’s the cost of the “free market”.
Tea baggers and libertarians are always wanting to end the gas tax which is 18.4 cents and will try to do so in September (who needs public roads, the free market can do better). But they have no problem with the “free market” adding 66.6% to the price of gasoline and it would be the same for “free market“ roads.
It’s only because Obama won’t let them “drill baby, drill” don’t you know. Even though there has always been a surplus of gasoline in the US as we export billions of barrels just to get rid of the gasoline. This is because gasoline is a “waste” product of oil refining and not the principle production goal of the petro-chemical industry.
If there really was a “free market”, gasoline would be $2.00 a gallon or less, but you need to believe in angels to actually believe in “free markets”. The oil companies used to burn gasoline to get rid of it and would again if they could, just to keep the price up. But Wall Street does an even better job of gouging on price by managing the news to make you think gasoline is a rare and valuable commodity. They also use their unlimited money to tie up the supply to the point that even oil company executives are impressed and that‘s saying something. www.prairie2.com