Comments on: How Over-Regulating Goldman Sachs Will Lead to Higher Oil and Commodity Prices

By: tomt

tomt — Sat, 22 Aug 2009 12:17:06 +0000

I am a bit of a gambler, ahem speculator myself and I can understand why you might be inclined to defend this group in general, but this ends up being biased PR for letting GS, JPM, etc. speculate as they wish. A little knowledge is a dangerous thing. You chose to debunk the premise that any entity could have a significant influence on markets, because somebody else said it was so.
You can't recognize the past, present, and future damage associated with their many successes because you don't believe they could influence outcome in their favor.
I think we will suffer far more public outcry, and draconian regulation in the future, primarily because we failed to address abuses such as this. We can't predict the future, but I suspect you see it differently as well.

By: Carlos Comesana

Carlos Comesana — Fri, 21 Aug 2009 19:15:07 +0000

So,…it is justify ty to pay Mr. Hall the U$S 100 MM??

By: ERROL LORENTZ

ERROL LORENTZ — Fri, 21 Aug 2009 18:48:33 +0000

I think that you are full of bs. I don't care how many or what kind of trades that they make, just when they circle the bowl, the goverment should just wave goodby.

By: Stephen Cammans

Stephen Cammans — Fri, 21 Aug 2009 15:32:59 +0000

One thing you have not addressed is how markets can be dominated and abused in the USA. Remember Enron? They worked at manipulating the market. That is why regulators want limit positions. I agree that a free market is best, however, when greed enters the picture there is a need for some regulation.

By: George

George — Fri, 21 Aug 2009 15:18:41 +0000

How ironic? In making your final point, you suggest the best approach is "an unfettered approach" that ultimately the market will solve its own problems. What is ironic is that without the intervention of the government into the market bailing out AIG and indirectly Goldman, there would be not Goldman today.

By: N.Red

N.Red — Fri, 21 Aug 2009 14:16:04 +0000

Wild commodity trading is fine for investors,but that is exactly what drove the entire economy to the brink of distruction, When supply and demand no longer govern the market place our entire economy is in jeopardy. The average consumer is at the mercy of a few greedy investors who have no regard to what is good for the country,but only what they can profit from. The devil is in thier greed.

By: Robert Johnson

Robert Johnson — Fri, 21 Aug 2009 13:44:18 +0000

Re USO and UNg you said, "That means that a limitation on futures positions – let alone an outright prohibition – would work against the best interests of individual investors."

Hah, hah, hah. USO and UNG so badly underperform their oil and natural gas that individual investors should be banned from owning them. USO and UNG enrich Wallstreet not the regular people. If USO and UNG disappeared today it would be a POSITIVE.

Goldman Sachs should lose their exemption. They are not hedging in the traditional sense of producers and users. Goldman Sachs is just playing financial games and should have to observe the same position limits as other firms.

By: Mark

Mark — Fri, 21 Aug 2009 13:33:10 +0000

Did not Goldman Sachs become a bank? I understand why oil went to almost $150 and had no problem except grumbling to myself when I bought a tank of gas it was traders making positions and the market corrected itself. My problem is GS seems to want no rules until they get in trouble and then they want to be protected when it looks like they will have to pay up for their mistakes. They are so big they make insider info and then trade on it. If they are to big to fail then they need to pay something for that protection. You and I don't have anybody in the Government calling us so we know how to position our trades.
At the very least I hope they are not allowed to show they are almost bankrupt when they file their tax forms with the IRS.
It just bugs me when the big decision makers that caused the problems get bonuses and the under $40k workers get laid off.

By: Philippe

Philippe — Fri, 21 Aug 2009 13:01:37 +0000

Thanks for this article.
There are many things to say. For this comment, I would like to share 2 points
1/ I agree with the risk to see the business flee abroad but I would not this mean no regulation can take place, it just mean it takes a worldwide regulation in a worldwide business world and if some say worldwide regulation is impossible they should consider the reason why worldwide business is possible ? As this reason is easy to know, it also why worldwide regulation is not impossible but unwanted…Quite a difference.
2/ If bureaucracy is not able to price fairly, the question of how well can a free market give fair prices is very crucial. The very first defensors of free market as Adam Smith gave conditions to this and if these conditions are not met, free market is not pricing fair. On a pure theorical base, indeed, a fair pricing is quite impossible as all required conditions for a fair market are never reached but we may think it can tend to it. Does speculation help to tend to it ? It just depends upon many conditions so I am not so confident as the article is about the supply and demand can give fair prices. On the contrary, I would think not but I would say this is because of speculation but because the conditions of efficient market are not in place hence the speculation…So finally speculation is a proof that our economic system is not flawless, regulation to stop the regulation will not the flaws ! Still, speculation does not correct them as it is here to exploit them…

By: p v subramanyam

p v subramanyam — Fri, 21 Aug 2009 12:49:17 +0000

Amazingly well written article. Quite an eye opener. Liar's Poker live long!