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Posts Tagged ‘ratings’
Central Banking’s Split Personality Can’t Go On
Wednesday, 22 May 2013 09:34
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Central Banking’s Split Personality Can’t Go On

Central bankers have spent the past five years expanding their balance sheets to unprecedented degrees. Now they have modest (at best) growth, but an enormous monetary base. Some want to do more but others are worried about how hard it will be to normalize policy. Nowhere is this split more apparent than in the Bank of England, although there are signs of the same at the Federal Reserve and even the Bank of Japan. (Read more…) Once again the BOE’s Monetary Policy Committee voted 6-3 against providing more quantitative easing to the economy, with outgoing governor Mervyn King on the losing side.

http://www.financialjuice.com/News/109287/Central-Bankings-Split-Personality-Cant-Go-On.aspx

Canada’s Bond-Dumping Frenzy Escalates as Pensions Unload

Canada’s biggest pension-fund manager will “significantly” cut its C$64 billion ($62.3 billion) allocation to bonds as the fixed-income market’s foothold among its most loyal base of investors grows less certain.

http://www.financialjuice.com/News/109279/Canadas-Bond-Dumping-Frenzy-Es…

EUR/USD Most Vulnerable Pair Ahead of Bernanke, FOMC Minutes

Most currencies have fallen against the dollar towards the testimony of Ben Bernanke in Washington and the release of the recent FOMC meeting minutes. Some had good reasons to fall and some didn’t have specific ones.

http://www.financialjuice.com/News/109278/EURUSD-Most-Vulnerable-Pair-Ah…

Schaeuble: EU must accelerate fighting youth unemployment

Cutting unemployment decisive for EU legitimacy German bilateral programs compliment EU efforts Schaeuble is speaking in Berlin.

http://www.financialjuice.com/News/109277/Schaeuble-EU-must-accelerate-f…

Lehman Brothers Holding raises $1.88 bln selling broker claims

Lehman Brothers Holding Inc, the former investment bank that is working to repay creditors, said on Wednesday it had raised $1.88 billion by selling claims it held against its former brokerage.

http://www.financialjuice.com/News/109266/Lehman-Brothers-Holding-raises…

Bernanke expected to stay the course on Fed policy

NEW YORK (Reuters) – Federal Reserve Chairman Ben Bernanke is not expected to hint at a pending policy change when he testifies before the U.S. Congress on Wednesday despite some speculation among investors that the central bank could soon reduce its massive bond buying program

http://www.financialjuice.com/News/109264/Bernanke-expected-to-stay-the-…

Credit rating firms sow doubt on euro zone bond rally

Credit rating firms say they could further downgrade the ratings of highly indebted euro zone countries, putting their bonds at risk of being pitched out of global indexes and reversing a fall in their borrowing costs.

http://www.financialjuice.com/News/109237/Credit-rating-firms-sow-doubt-…

US Existing Home Sales 4.97 within expectations.

The annual level of US existing homes sales was expected to rise to 4.99 million. This is a rise of 0.6%. EUR/USD extends its gains after the publication and breaks above

http://www.financialjuice.com/News/109301/US-Existing-Home-Sales-497-wit…

    



 
Frontrunning: May 21
Tuesday, 21 May 2013 06:48
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  • IMF Tells Central Europe to Spend More (WSJ)
  • Tornadoes Blast Oklahoma (WSJ)
  • Frenetic search for survivors as 91 feared dead in tornado-hit Oklahoma (Reuters)
  • JPMorgan investors on edge over vote on Dimon; what if they win? (Reuters)

    • (Read more…)

  • Wealthy bank depositors to suffer losses in EU law (Reuters)
  • Yen Slips as Amari Backtracks (BBG)
  • Japan Ready for More Yen Weakness Despite Recent Comments (WSJ)
  • IRS officials back on Capitol Hill hot seat over targeting (Reuters)
  • Li Keqiang pledges China boost to India trade (FT)
  • Europe’s Recession Sparks Grass-Roots Political Push (WSJ)
  • Obama and Xi to meet in effort to calm growing US-China rivalry (FT)
  • Berlin plans to streamline EU but avoid wholesale treaty change (FT)
  • France must reform or face punitive measures – EU’s Oettinger (Reuters)
  • Tumblr’s 26-Year-Old Founder Celebrates $1.1 Billion Deal (BBG)
  • SocGen Joins UniCredit in Warsaw as Equity Sales Surge (BBG)

 

Overnight Media Digest

WSJ

* JPMorgan Chase & Co is preparing for a shake up of its board even if every director wins re-election at Tuesday’s shareholder meeting and James Dimon keeps his dual job as chairman and chief executive.

* Even in the fast growing realms of the consumer Internet, some businesses are best served by old fashioned consolidation. GrubHub and Seamless, two nationwide startups used for ordering restaurant takeout by smartphone and computer, said they would merge. GrubHub Chief Executive Matt Maloney, who will lead the combined company, declined to discuss valuation.

* Here is a glimpse at the future of finance. When Deutsche Bank AG set out to win a role on Apple Inc’s $17 billion bond, it eschewed Wall Street’s traditional tactics. Instead of flying well-groomed bankers to Cupertino, California, to charm Apple’s top executives with powerpoint presentations, Deutsche relied on iTunes. The German bank has handled the back office work for Apple’s online store in recent years, according to people familiar with the situation.

* Aware that it needs China’s sweet tooth, Hershey Co is rolling out a Chinese brand designed for the world’s fastest growing candy market. In a first launch beyond the U.S. market, Hershey is unveiling on Tuesday a candy known in English as the Lancaster and in Chinese as Yo-man. Hershey will officially open its Shanghai-based Asia Innovation Center on Wednesday. It will be company’s second-largest research and development center world-wide.

 

FT

The U.S. Senate accused Apple Inc of paying little or no taxes to governments around the world by using loopholes and Irish units that are not tax residents of any country.

Actavis said it would by rival Warner Chilcott in a $5 billion deal that would see the combined company become the world’s third-largest generic drug company by sales.

ENRC’s co-founders, who are bidding to take control of the miner, are likely to be able to buy the company for a low price, analysts said.

India’s Essar Oil will sign a loan-for-oil deal with state-run China Development Bank under which the bank will provide the company with a loan in exchange for oil shipments to PetroChina.

The European Commission is seeking new information from trading houses, including Glencore, as part of its probe into the manipulation of energy price benchmarks.

 

NYT

* Yahoo’s $1.1 billion proposed acquisition of Tumblr is a huge coup for the young founder of the even younger start-up and a splashy move by Marissa Mayer to shake up her company. It also heralds a larger shift in social media. Facebook arguably invented modern social networking, and is still the king. But increasingly its approach is seen as passive and outdated as people flock to sites like Tumblr where they can be more actively engaged in creating personal, expressive content to share – and which could potentially translate to advertising dollars.

* Even as Apple became the nation’s most profitable technology company, it avoided billions in taxes in the United States and around the world through a web of subsidiaries so complex it spanned continents and went beyond anything most experts had ever seen, Congressional investigators disclosed on Monday.

* SAC Capital Advisors is bracing for another round of withdrawal requests as fears grow that insider trading investigations could further damage Steven Cohen and his firm.

* Courts are looking to Urban Dictionary, a crowd sourced website, as one way to define words on which a case may turn.

* While companies weigh bids for Hulu and industry heavyweights complain that TV Everywhere isn’t going much of anywhere, another way to watch time-shifted television is quietly gaining traction: video-on-demand, or VOD.

* The Obama administration and the European Union have each decided to negotiate settlements with China in the world’s largest anti-dumping and anti-subsidy trade cases involving China’s roughly $30 billion a year in solar panel shipments to the West, officials and trade advisers in Beijing, Brussels and Washington said.

* Last week’s disclosure by Ronald Machen Jr, the United States attorney for the District of Columbia, that his office had secretly seized telephone records of Associated Press reporters as part of a leak investigation surprised and shocked many people. But to some on Wall Street, Machen’s involvement in a phone records case had a familiar ring. They recalled the case of Allied Capital, a formerly high-flying business development company based in Washington whose shares collapsed in 2009. Two years earlier, Allied had admitted that one of its investigators had stolen the phone records of a prominent hedge fund manager who had been critical of the company’s accounting practices. The chief outside lawyer counseling Allied was Machen, then a partner at WilmerHale.

* Japan’s Prime Minister Shinzo Abe’s economic shock therapy, which combines a flood of cheap cash, fiscal stimulus and deregulation, is getting early results.

 

Canada

THE GLOBE AND MAIL

* When Toronto city council meets Tuesday morning to formally kill the proposal for a downtown casino, it will end for good what was once a pet project for mayor Rob Ford.

The meeting will also be the first time the beleaguered mayor must face his council colleagues since accusations he was videotaped smoking crack cocaine surfaced last week. (http://link.reuters.com/heg38t)

Reports in the business section:

* Alaska proposed a multiyear, multimillion dollar plan aimed at determining the true oil and gas potential in the Arctic National Wildlife Refuge. State officials hope the plan will reinvigorate and reshape the debate over whether to drill on the refuge’s coastal plain. (http://link.reuters.com/peg38t)

NATIONAL POST

* Canadian Prime Minister Stephen Harper will head to South America this week to suss out membership in a new trading bloc he has been working to join for many years.

The Pacific Alliance was formed by Chile, Colombia, Mexico and Peru in 2011 and Canada took a spot on the sidelines the next year, along with several other countries as observers. (http://link.reuters.com/reg38t) (Compiled by Avik Das in Bangalore)

 

China

PEOPLE’S DAILY

- Chinese Premier Li Keqiang’s visit to India, his first foreign trip since taking office in March, has enhanced the strategic partnership of the two countries, the ruling Communist Party’s newspaper said in a report.

CHINA SECURITIES JOURNAL

- China is expected to further increase supervision of local government debt to prevent risk of defaults.

- Chinese wine makers have applied to the Ministry of Commerce to launch an anti-dumping investigation into sales by European counterparts in China.

SHANGHAI SECURITIES NEWS

- Experts believe the Chinese currency yuan has the potential to rise further in the near term as China steps up exchange rate reforms. Driven by strong capital inflows into China, the central bank has guided the yuan to a slew of record highs since early April.

- Bank stocks are still being favoured by Chinese investors and have led a recent rally in China’s stock market, although foreign investors have been withdrawing from the Chinese sector.

CHINA DAILY

- China’s marine economy will account for 13 percent of the country’s GDP by 2020, a government think-tank said on Monday. The China Institute for Marine Affairs said the sector would be worth more than 10 trillion yuan ($1.63 trillion) by then.

- Many of China’s first-tier cities are “barely suitable for living”, according to a report released on Sunday by a top Chinese think-tank. Beijing, Shanghai and Guangdong all failed to make the list of “habitable cities”.

SHANGHAI DAILY

- The number of weddings in Shanghai skyrocketed more than 800 percent to 3,766 on Sunday alone, as happy couples flocked to tie the knot. May 20 is seen as an auspicious date in China.

Corporate Finance

* Charlie Ergen, the chairman of U.S. satellite company Dish Network Corp, has offered to buy bankrupt broadband company LightSquared Inc’s wireless airwaves, a source close to Ergen told Reuters. Bloomberg reported the offer to be valued at $2 billion, citing people familiar with the bid.

* U.S. private equity firm Riverstone Holdings LLC is planning to invest as much as $1 billion in a new commodities venture run by Deutsche Bank AG former head of commodities David Silbert, the Financial Times reported.

* India’s Essar Oil Ltd will sign a $1 billion loan deal with China on Tuesday that sources with knowledge of the matter said would be backed by supply of refined products to top state oil producer PetroChina Co Ltd.

* Specialty chemicals producer Rockwood Holdings Inc’s pigments businesses have attracted offers from buyout firms including Blackstone Group LP and Advent International Corp, several people familiar with the matter said.

* Italian motorway operator Atlantia SpA is close to selling its transmission towers to U.S. investors for almost 100 million euros ($128.56 million), a source close to the matter said on Monday.

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

American Tower (AMT) upgraded to Outperform from Neutral at Macquarie
BlackRock (BLK) upgraded to Outperform from Neutral at Macquarie
Con-way (CNW) upgraded to Buy from Hold at Wunderlich
Cubist (CBST) upgraded to Hold from Sell at Cantor
Felcor Lodging (FCH) upgraded to Buy from Neutral at SunTrust
IntercontinentalExchange (ICE) upgraded to Outperform from Neutral at Macquarie
Stifel Financial (SF) upgraded to Market Perform from Underperform at Wells Fargo
T. Rowe Price (TROW) upgraded to Outperform from Market Perform at Bernstein
Wet Seal (WTSL) upgraded to Buy from Hold at KeyBanc

Downgrades

Acquity Group (AQ) downgraded to Neutral from Buy at Roth Capital
Beazer Homes (BZH) downgraded to Neutral from Buy at Sterne Agee
CME Group (CME) downgraded to Neutral from Outperform at Macquarie
Carnival (CCL) downgraded to Neutral from Buy at UBS
Coach (COH) downgraded to Equal Weight from Overweight at Morgan Stanley
Deutsche Bank (DB) downgraded to Neutral from Overweight at JPMorgan
First Republic Bank (FRC) downgraded to Hold from Buy at Jefferies
Franklin Resources (BEN) downgraded to Neutral from Outperform at Macquarie
Life Technologies (LIFE) downgraded to Underperform from Outperform at CLSA
Oil States (OIS) downgraded to Neutral from Buy at Sterne Agee
Raymond James (RJF) downgraded to Market Perform from Outperform at Wells Fargo
VF Corp. (VFC) downgraded to Market Perform from Outperform at Wells Fargo
WellCare (WCG) downgraded to Neutral from Buy at Goldman

Initiations

Aetna (AET) reinstated with a Buy at Goldman
BioScrip (BIOS) initiated with a Buy at Jefferies
Cray (CRAY) initiated with a Buy at Sterne Agee
Harris (HRS) initiated with a Hold at Stifel
Hasbro (HAS) initiated with an Overweight at Piper Jaffray
JAKKS Pacific (JAKK) initiated with a Neutral at Piper Jaffray
LeapFrog (LF) initiated with an Overweight at Piper Jaffray
Mattel (MAT) initiated with an Overweight at Piper Jaffray
Sony (SNE) initiated with a Buy at Jefferies
Summer Infant (SUMR) initiated with an Overweight at Piper Jaffray
Taylor Morrison (TMHC) initiated with a Hold at Deutsche Bank

HOT STOCKS

Dish (DISH), Sprint (S) to engage in talks
Softbank (SFTBF) confirmed waiver, expects Sprint (S) deal to close in six weeks
Cadbury Schweppes (CSG) begins modified $125M “Dutch Auction” tender offer
Apple (AAPL) has used Ireland as a tax-haven for the past five years by creating “No-shore” tax entities, said Senator Carl Levin (D-MI)
S&P lowered Dell (DELL) ratings to ‘BBB’ from ‘A-’, remains on watch negative
Carnival (CCL, CUK) lowered FY13 EPS to $1.45-$1.65 from $1.80-$2.10, consensus $1.97
General Cable (BGC) initiated dividend and extended $125M repurchase authorization
DOJ reached settlement with Cinemark (CNK) in Rave Holdings deal
Wausau Paper (WPP) agreed to divest specialty paper business for about $110M
Regeneron (REGN), Bayer (BAYRY), Genentech (RHHBY) resolved certain patent disputes

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
hhgregg (HGG), TiVo (TIVO), Urban Outfitters (URBN)

NEWSPAPERS/WEBSITES

  • JPMorgan Chase (JPM) plans to shake-up of its board even if every director wins re-election at today’s shareholder meeting and James Dimon keeps his dual job as chairman and CEO, the Wall Street Journal reports
  • Mutual-fund firms are joining activist investors in getting more aggressive over demands for change in how board members are paid at U.S. companies. Activist investors have been experimenting more frequently with incentive pay packages for the board members they nominate in proxy fights, the Wall Street Journal reports
  • Specialty chemicals producer Rockwood Holdings’s (ROC) pigments businesses have attracted offers from buyout firms including Blackstone Group (BX) and Advent International, sources say, Reuters reports
  • The Asian prime brokerage unit of Credit Suisse (CS) replaced Morgan Stanley (MS) as the second largest firm servicing the region’s $148B hedge funds industry, according to a survey by AsiaHedge. Goldman Sachs (GS) remains Asia’s top prime broker with 179 clients and total assets under management of $24.6B, Reuters reports
  • Bank managers in the U.S. are less likely to engage in mergers and acquisitions this year as regulators heighten scrutiny on potential deals and sellers wait for higher valuations, according to a KPMG survey, Bloomberg reports
  • PIMCO’s Bill Gross says the bull market for bonds may have ended last month. But investors are staying put. Four years into the biggest rally in U.S. stocks since 2000, bond mutual funds are attracting more money than their equity counterparts, Bloomberg reports

SYNDICATE

Cimatron (CIMT) files to sell ordinary shares
First Potomac (FPO) files to sell 6M shares of common stock
Ironwood (IRWD) files to sell 10.5M shares of common stock
Laclede Group (LG) files to sell 8.7M shares of common stock
NPS Pharmaceuticals (NPSP) files to sell 6M shares of common stock
Oaktree Capital (OAK) files to sell 6M shares of common stock
TCP Capital (TCPC) files to sell 4M shares of common stock
Wesco Aircraft (WAIR) files to sell 15M shares of common stock

    



 
Is EVERY Market Rigged?
Sunday, 19 May 2013 19:38
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CNN reports:

The European Commission raided the offices of Shell, BP and Norway’s Statoil this week as part of an investigation into suspected attempts to manipulate global oil prices spanning more than a decade.

 

None of the companies have been accused of wrongdoing, but the controversy has brought back memories of the Libor rate-rigging scandal that rocked the financial world last year. (Read more…)

 

***

 

A review ordered by the British government last year in the wake of the Libor revelations cited “clear” parallels between the work of the oil-price-reporting agencies and Libor.

 

“[T]hey are both widely used benchmarks that are compiled by private organizations and that are subject to minimal regulation and oversight by regulatory authorities,” the review, led by former financial regulator Martin Wheatley, said in August . “To that extent they are also likely to be vulnerable to similar issues with regards to the motivation and opportunity for manipulation and distortion.”

 

***

 

In a report issued in October, the International Organization of Securities Commissions — an association of regulators — said the ability “to selectively report data on a voluntary basis creates an opportunity for manipulating the commodity market data” submitted to Platts and its competitors.

 

Responding to questions from IOSCO last year, French oil giant Total said the price-reporting agencies, or PRAs, sometimes “do not assure an accurate representation of the market and consequently deform the real price levels paid at every level of the price chain, including by the consumer.” But Total called Platts and its competitors “generally… conscientious and professional.”

 

***

 

“Even small distortions of assessed prices may have a huge impact on the prices of crude oil, refined oil products and biofuels purchases and sales, potentially harming final consumers,” the European Commission said this week.

USA Today notes:

The Commission … said, however, that its probe covers a wide range of oil products — crude oil, biofuels, and refined oil products, which include gasoline, heating oil, petrochemicals and others.

 

***

 

The EU said it has concerns that some companies may have tried to manipulate the pricing process by colluding to report distorted prices and by preventing other companies from submitting their own prices.

 

***

 

Unlike oil futures, which set prices for contracts, the data used in the MOC process is based on the physical sale and purchase of actual shipments of oil and oil products.

 

***

 

According to Statoil, the EU investigation stretches back to 2002, which is when Platts launched its MOC price system in Europe. The suspicion is that some companies may have provided inaccurate information to Platts to affect the oil products’ pricing, presumably for financial gain.

Fox points out:

At issue is whether there was collusion to distort prices of crude, refined oil products and ethanol traded during Platts’ market-on-close (MOC) system – a daily half-hour “window” in which it sets prices.

 

But the European Commission also is examining whether companies were prevented from taking part in the price assessment process.

The Guardian writes:

The commission said the alleged price collusion, which may have been going on since 2002, could have had a “huge impact” on the price of petrol at the pumps “potentially harming final consumers”.

 

Lord Oakeshott, former Liberal Democrat Treasury spokesman, said the alleged rigging of oil prices was “as serious as rigging Libor” – which led to banks being fined hundreds of millions of pounds.

 

He demanded to know why the UK authorities had not taken action earlier and said he would ask questions of the British regulator in Parliament. “Why have we had to wait for Brussels to find out if British oil giants are ripping off British consumers?” he said. “The price of energy ripples right through our economy and really matters to every business and families.”

 

***

 

Shadow energy and climate change secretary Caroline Flint said: “These are very concerning reports, which if true, suggest shocking behaviour in the oil market that should be dealt with strongly.

 

“When the allegations of price fixing in the gas market were made, Labour warned that opaque over-the-counter deals and relying on price reporting agencies left the market vulnerable to abuse.

 

“These latest allegations of price fixing in the oil market raise very similar questions. Consumers need to know that the prices they pay for their energy or petrol are fair, transparent and not being manipulated by traders.”

 

Shadow financial secretary to the Treasury Chris Leslie said: “If oil price fixing has taken place it would be a shocking scandal for our financial markets.

The Telegraph reports:

“97 per cent of all we eat, drink, wear or build has spent some time in a diesel lorry,” said a spokesman for FairFuel UK, the lobbyists. “If it is proved, they have been gambling with the very oxygen of our economy.”

 

***

 

Platts – to determine the benchmark price – examines just trades in the final 30 minutes of the trading day. A group of half a dozen analysts gather round a trading screen and decide on the final price. As with much that goes on in the City, it is a surprisingly old-fashioned method, reliant on gentlemanly conduct. Critics say it leaves the market open to abuse, and the price can suddenly spike or fall in the final minutes of the day.

The New York Times notes of agencies like Platt and Argus Media:

Their influence is extensive. Total, the French oil giant, estimated last year that 75 to 80 percent of crude oil and refined product transactions were linked to the prices published by such agencies.

The Observer points out that manipulation of the oil markets has long been an open secret:

Robert Campbell, a former price reporter at another PRA, Argus – he is now a staffer at Thomson Reuters, which also competes with Platts and others on providing energy news and data – said this a few days ago in a little-noticed commentary: “The vulnerability of physical crude price assessments to manipulation is an open secret within the oil industry. The surprise is that it took regulators so long to open a formal probe.”

Reuters reports that the probe may be expanding to the U.S.:

In Washington, the chairman of the Senate energy committee asked the Justice Department to investigate whether alleged price manipulation has boosted fuel prices for U.S. consumers.

 

“Efforts to manipulate the European oil indices, if proven, may have already impacted U.S. consumers and businesses, because of the interrelationships among world oil markets and hedging practices,” Sen. Ron Wyden (D-Ore.), chairman of the Senate Energy and Natural Resources Committee, wrote in a letter to Attorney General Eric H. Holder Jr.

 

Wyden also asked Justice to investigate whether oil market manipulation was taking place in the United States.

Not only are petroleum products a multi-trillion dollar market on their own, but manipulation of petroleum prices would effect virtually every market in the world.

For example, the Cato Institute notes how many industries use oil:

U.S. industries use petroleum to produce the synthetic fiber used in textile mills making carpeting and fabric from polyester and nylon. U.S. tire plants use petroleum to make synthetic rubber. Other U.S. industries use petroleum to produce plastic, drugs, detergent, deodorant, fertilizer, pesticides, paint, eyeglasses, heart valves, crayons, bubble gum and Vaseline.

The India Times reports that:

The price variation in crude oil impacts the sentiments and hence the volatility in stock markets all over the world. The rise in crude oil prices is not good for the global economy. Price rise in crude oil virtually impacts industries and businesses across the board. Higher crude oil prices mean higher energy prices, which can cause a ripple effect on virtually all business aspects that are dependent on energy (directly or indirectly).

The Federal Reserve Bank of San Francisco notes:

When gasoline prices increase, a larger share of households’ budgets is likely to be spent on it, which leaves less to spend on other goods and services. The same goes for businesses whose goods must be shipped from place to place or that use fuel as a major input (such as the airline industry). Higher oil prices tend to make production more expensive for businesses, just as they make it more expensive for households to do the things they normally do.

 

***

 

Oil price increases are generally thought to increase inflation and reduce economic growth.

 

***

 

Oil prices indirectly affect costs such as transportation, manufacturing, and heating. The increase in these costs can in turn affect the prices of a variety of goods and services, as producers may pass production costs on to consumers.

 

***

 

Oil price increases can also stifle the growth of the economy through their effect on the supply and demand for goods other than oil. Increases in oil prices can depress the supply of other goods because they increase the costs of producing them. In economics terminology, high oil prices can shift up the supply curve for the goods and services for which oil is an input.

 

High oil prices also can reduce demand for other goods because they reduce wealth, as well as induce uncertainty about the future (Sill 2007). One way to analyze the effects of higher oil prices is to think about the higher prices as a tax on consumers (Fernald and Trehan 2005).

The Post Carbon Institute notes (via OilPrice.com) that high oil prices raise food prices as well:

The connection between food and oil is systemic, and the prices of both food and fuel have risen and fallen more or less in tandem in recent years (figure 1). Modern agriculture uses oil products to fuel farm machinery, to transport other inputs to the farm, and to transport farm output to the ultimate consumer. Oil is often also used as input in agricultural chemicals. Oil price increases therefore put pressure on all these aspects of commercial food systems.

Figure 1: Evolution of food and fuel prices, 2000 to 2009
Sources: US Energy Information Administration and FAO.

Economists Nouriel Roubini and Setser note that all recessions after 1973 were associated with oil shocks.

Interest Rates Are Manipulated

Unless you live under a rock, you know about the Libor scandal.

For those just now emerging from a coma, here’s a recap:

Derivatives Are Manipulated

The big banks have long manipulated derivatives … a $1,200 Trillion Dollar market.

Indeed, many trillions of dollars of derivatives are being manipulated in the exact same same way that interest rates are fixed: through gamed self-reporting.

Gold and Silver Are Manipulated

The Guardian and Telegraph report that gold and silver prices are “fixed” in the same way as interest rates and derivatives – in daily conference calls by the powers-that-be.

Everything Can Be Manipulated through High-Frequency Trading

Traders with high-tech computers can manipulate stocks, bonds, options, currency and commodities. And see this.

Manipulating Numerous Markets In Myriad Ways

The big banks and other giants manipulate numerous markets in myriad ways, for example:

  • Engaging in mafia-style big-rigging fraud against local governments. See this, this and this
  • Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here
  • Pledging the same mortgage multiple times to different buyers.  See this, this, this, this and this.  This would be like selling your car, and collecting money from 10 different buyers for the same car
  • Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this
  • Engaging in unlawful “Wash Trades” to manipulate asset prices. See this, this and this
  • Participating in various Ponzi schemes. See this, this and this
  • Bribing and bullying ratings agencies to inflate ratings on their risky investments