"The People" are coming in to conflict with monopolies - Goldman and other Wall Street monopolies-giant businesses, BP, Healthcare giants - through crises , but there is no way to get it framed that way in the mass media.
On 5/28/10, CeJ <jann...@gmail.com> wrote: > Goldman Sachs' profitable 'oil spill' of 2008. I'll bet they also had > a huge 'short' bet on the price of oil futures going into 2008 as > well. The collapse in the price of oil (or at least leveraged > speculation on the future price of oil) is most likely deep at the > center of the financial turmoil of the past 3 years, but no one is > paying much attention apparently. > > > > http://www.forbes.com/forbes/2009/0413/096-sachs-semgroup-goldman-goose-oil.html > > except > > How Goldman Sachs was at the center of the oil trading fiasco that > bankrupted pipeline giant Semgroup. > > When oil prices spiked last summer to $147 a barrel, the biggest > corporate casualty was oil pipeline giant Semgroup Holdings, a $14 > billion (sales) private firm in Tulsa, Okla. It had racked up $2.4 > billion in trading losses betting that oil prices would go down, > including $290 million in accounts personally managed by then chief > executive Thomas Kivisto. Its short positions amounted to the > equivalent of 20% of the nation's crude oil inventories. With the > credit crunch eliminating any hope of meeting a $500 million margin > call, Semgroup filed for bankruptcy on July 22. > > But now some of the people involved in cleaning up the financial mess > are suggesting that Semgroup's collapse was more than just bad > judgment and worse timing. There is evidence of a malevolent hand at > work: oil price manipulation by traders orchestrating a short squeeze > to push up the price of West Texas Intermediate crude to the point > that it would generate fatal losses in Semgroup's accounts. > > "What transpired at Semgroup was no less than a $500 billion fraud on > the people of the world," says John Catsimatidis, the billionaire > grocer turned oil refiner who is attempting to reorganize Semgroup in > bankruptcy court. The $500 billion is how much the world would have > overpaid for crude had a successful scam pushed up oil prices by $50 a > barrel for 100 days. > > What's the evidence of this? Much is circumstantial. Proving > oil-trading manipulation is difficult. But numerous people familiar > with the events insist that Citibank, Merrill Lynch and especially > Goldman Sachs had knowledge about Semgroup's trading positions from > their vetting of an ill-fated $1.5 billion private placement deal last > spring. "Nothing's been proven, but if somebody has your book and > knows every trade, it would not be difficult to bet against that book > and put the company into a tremendous liquidity squeeze," says John > Tucker, who is representing Kivisto. > > What's known for sure is that Goldman Sachs, through J. Aron & Co., > its commodities trading arm, was in prime position to use such > data--and profited handsomely from Semgroup's fall. J. Aron was > Semgroup's biggest counterparty, trading both physical oil flowing > through pipelines and paper oil, in the form of options and futures. > > When crude oil peaked in July, Semgroup ran out of cash to meet margin > requirements on options contracts it had with Aron, contracts on which > it had paper losses of $350 million. Desperate to survive, Semgroup > asked Aron to pony up $430 million it owed on physical oil. Aron said > no, declared Semgroup in default on its contracts and demanded > immediate payment of losses. > > _______________________________________________ > Marxism-Thaxis mailing list > Marxism-Thaxis@lists.econ.utah.edu > To change your options or unsubscribe go to: > http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis > _______________________________________________ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
