Diary

Obama's Perfect Storm. Rising Oil Prices had people scratching their head.

Anyone notice the price of gas at the pump recently? Why would a barrel of oil be sitting at $65 with our economy, along with Europe’s economy, in the tank? Are we really seeing “green shoots”? Or are we seeing something known in the business as covert government manipulation.

As a trader, I can tell you some “inside” information that you won’t have without digging through 100s of blogs, reading mind numbing reports, as well as being at trading desks or watching screens with a LOT of information that needs to be taken in rapidly.

Goldman Sachs, along with the other broker dealers have always had access to the markets (including commodities). That’s why they are known as “broker-dealers”. Merrill Lynch – broker dealer. Morgan Stanley – broker dealer. All the big guys on wall street that, oh, somehow wound up getting TARP funds as well as giving up warrants, were broker dealers.
I want to focus on one broker dealer: Goldman Sachs. Since the government took over GS and other “major” American broker dealers, there has been – let’s say, hanky panky, in the markets. Not to say there wasn’t hanky panky before hand (there was), but it was for capitalistic reasons: greed (which is, remember, GOOD).

I asked a few of the old timers what they made of what I was seeing and showing them, and in asking I could see that they were uncomfortable with my questions. They just said (basically) that’s how the market works. Sure, blow off the babe. Like I didn’t have my masters degree. Like I hadn’t made money for the company and more importantly kept the money, once made, from being sucked into a vortex of gloom. Nope, I was to be patted on the head and told, that’s the way markets work. Except they don’t and never have. When trading started out on Wall Street, it was already rigged. Someone betting on the delivery of a rum shipment on a certain date could be swindled by the person who betting against that delivery date, swam out and sank the boat. Thus making his own trade profitable and if he was hoarding rum to begin with, made the rum even more profitable. See the picture? Wall Street and trading companies are a gamble. A lot of that gamble was supposed to be taken out when the ‘little guy’ showed up with his 401k money, but this is blog entry is not about the inherent evils or good that the market does. The market is us or in this case: US as in Obama.

I started receiving a couple of emails to my private account from (obviously) some of the people I had started talking to/questioning, and they all confirm that what I’m seeing, they’re seeing but we can’t exactly explain it as we don’t know who’s buying those contracts for oil at $65. We can’t see the players as they’re playing in DARK POOLS.

Dark Pools are virtual gateways to the market with no ID-ing who’s buying or selling. We can only see the results. Which is why, when 1 million shares get dumped into a dark pool and we’re suddenly down 10% on one company’s share price, we’re wondering who’s selling – but there’s no ID as its being traded in a dark pool.

So, we, at the desks, are left trying to figure out, is this real? Does someone know something about the stock that we and our research department don’t? Or is it a head fake? This last one happens all the time.

It usually occurs around noon but lately they’ve been changing their set up as they don’t want it to look so manipulated. We can see their mode of choice in the manipulation and that is: S&P futures.

S & P futures being bought and within seconds the hand behind the curtain makes, let’s say GE, go up 15 cents a share. That may equate to 10% and get it on the hot sheets for those day traders still in the business that chase the volatility. That discussion is also not what this entry is about.

What this is about is: Oil and Obama. You just needed to know the fundamentals to see how easy this is going to be for him.

Given that Obama controls the banks through Geithner (known as the Sith Lord in these rooms) and Obama owns GM and needs people to want to buy tonka toy cars, how to make this all look oh so good for Obama? How to get GM profitable again?

Obviously its to make the cost of oil go up so people trade in their cars for the little ones that GM is making.

How do we know that the oil market is being played in? Same thing: options being bought with offshore ID accounts. We have our theories as to who these are and its: Goldman Sachs. You can rarely prove manipulation but it makes so much sense that GS is at the forefront of this:

Rubin, Geithner and Paulson were/are still involved with GS as they have pension and seperation contracts where GS shares are their money in the bank. Thus if Goldman ‘books’ a profit from riding the manipulation up – they can get out from under the US gov’t’s thumb after paying back not only TARP but those convertable warrants (ugly sting with these).

GS also acts as a conduit to dark pools for Geithner at the behest of Obama to get the price of oil up for the good of GM after it comes out of bankruptcy – their little go carts will start to sell quickly (even though they have to be imported from China until the assembly plants in the US can be refigured). This also helps Obama with China, as we buy more from them, and they reciprocate by continuing to purchase US treasuries (which they keep threatening to stop but won’t really as that would be suicidal for all who own US bonds- the first one to start selling or not buying only hurts themselves if they’re already holding bonds. Its a Kobyoshi-Maru situation or a chinese finger puzzle).

Obama gets what he wants from manipulating the oil markets because then it all looks good: more people driving smaller cars, GM raising from the dead and being a viable company, people using less oil so they turn to public transport which gets stimulus money to make the hordes that are new users – happy.

The people may not like Obama with higher oil prices but he won’t hear their pain. He’s the instigator as he wants us to change and he’s willing to go to $4/gallon again to make us give up the cars we like, going on vacations, and having lots of food (which contributes to obesity and higher medical costs) from the farms as delivery fees will be higher all around for that Green Giant can of corn.

Obama is making the Perfect Storm. There will be nowhere to hide.