Want to see the plump financial tail wag the scrawny economic dog? Look no further than the wild, wooly oil markets.
Crude futures for delivery next month tumbled $4 and change in New York Wednesday, marking their biggest decline in a month. The recession obsession being what it is, the selloff was taken as confirming poor prospects for U.S. growth and rising risks that Europe will melt down.
But what Wednesday's plunge actually shows is how the bankers and their buddies are having their way with the economy yet again. Financial types – starting with the big banks that so graciously lean on our tax dollars, but also hedge funds and asset managers that sell index funds and the like – have spent the past half decade or so flooding into commodities. These markets are supposed to serve producers and consumers, but lately have served as much as anything as a profit center for deep-pocketed speculators.
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