I guess what infuriates me is that when the banks are using our money to trade in stocks it doesn't directly affect everyone because who cares about the price of apple stock on a given day. But when these fuckers plow into the commodity markets and drive the price up (which they will do under the guise of "hedging against inflation", if they aren't already doing it), they are directly increasing the cost of goods whether its food or gas and they're using our money to do it. I'm just baffled that people think its okay that banks be allowed to use taxpayer money to drive up the cost of commodities which shafts all the taxpayers through increases in living costs and the tax payer gets NO BENEFIT. Either the banks drive up commodity prices and shaft the consumer or they fuck up and the taxpayer gets the bill. Why is this acceptable?
Yeah, that is where banking should be headed anyway, back to the local communities. The problem is, a lot of those went down in the 1930s. Who knows how things would sort out today if the behemoths vaporized.
Agree, the banks are the ones making the best dime in this situation. The returns they make by taking on (in my opinion) totally risk free trading activities gives them unlimited power to do as they please, especially when the fed backs them up with zero % interest rates and tax payer bailouts.
You didn't read the newspapers right. Traders are pushing commodity prices up but also driving stock prices down, just to screw Main Street on both. That's their only trick, they never go the other way. When stocks goes up and commodities down, it's because of the ( good ) economy, traders are not involved in markets in those periods. Sorry I digress but I can't bear reading about "commodities up because of traders"
I have no problem with speculation driving prices up in stocks or commodities. I have a problem when the money used to speculate is tax payer money. If the banks want to put together a fund that consists of private FDIC uninsured money and go play in the oil markets and it causes the price to go up thats fine, I have no issue with that. But to do that with tax payer money is what I have problems with. How is it a capitalist market if I'm trading in the oil market with my own money or a private fund is trading in the oil market where they actually lose their own money and have to compete with banks that have federally backed dollars?
I think that a lot of people have misconceptions about Prop trading. It seems that a lot of the prop trading in the banks is just making markets on different products. The whole subprime mess was because the banks who sold subprime had to take the equity tranches of the CDOs which ended up failing even faster then the rest of the tranches. Could I be wrong? absolutely, but there is no need to take liquidity providers out of the markets, that will only lead to greater volatility.