Did Goldman Goose Oil?

Discussion in 'Wall St. News' started by makloda, Mar 27, 2009.

  1. 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.


    Anybody remember those weekly new record crude targets released by GS, Merril et. al.? Who would've thunk :cool:
  2. occam's razor: semgroup fucked up
  3. "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,"

    That is the arguement against transparency in hedge funds.
  4. Had it been a stock....and not oil....

    GS would have done the same ?

    Money is money....

    GS is an opportunist....THEIR JOB....

    And the reason they have such a firm ?
  5. GS, MS are not only opportunist, they are manipulators of the market. The former is legal, the latter not.

    They created the unregulated ICE exchange to hide their oil contracts (unreported) and lobbied the BUSH CTFC to permit trading of US oil contracts from an unregulated exchange.

    There is nothing free about a market that is controlled by hedge funds and cartels.
  6. Let someone come forth and tell the world that hedgies weren't paying people off at terminals to fudge inventory manifests, and that no one (let alone not a lot of funds) weren't hiring tankers to store crude out-of-terminal, so as to drive down deliveries.

    Those are just two things that happened which serve as incredibly strong indications that oil was severely manipulated and not trading at market prices. There were about 25 more gimmicks used by commodity traders in their criminal conspiracy.
  7. That's a good reason to clear through an AGENCY ONLY brokerage, like MF Global.

    At least you know they're not betting against you.

    I don't trust these wirehouse guys one bit.
  8. Exactly.

    It is well established that GS, MS, JPM and the likes are total crooks. So why do business with them if you're afraid of getting screwed.
  9. While it's true that there appeared to be an awful lot of shenanigans going on ( Thank You ICE, Phil Gramm, among others like Platt's and their widely used price-reporting system that may have tipped off owners of storage tankers), I do seem to recall that the Israeli's had asked the United States for permission to fly over Iraqi airspace and deliver a few American made bunker-busting bombs on Iran's main nuclear reactor in Natanz last Spring.

    Bush declined the Israeli's request for permission to fly over Iraq, not too mention using American made bunker-busting bombs, and our State Dept. never heard back from the Israelis for quite some time . . . fueling the uncertainty of whether or not an attack on Natanz was imminent.

    Thus, people "in the know" were well aware that Iran was about to go "offline"--- hoarding crude and bidding it up to outrageous prices.

    Semgroup Holdings must have been out of the foreign intelligence loop.


  10. CRUDE to $147 was a buy the rumor; sell the fact trade.

    The pusillanimous American media never reported the real reason crude went so high...

    Cooler heads prevailed. For now.
    #10     Mar 27, 2009