Some Scenery and Still a Beard

If you’d like to get very depressed, slide on over to the Washington Post and their story on oil market speculators and their relationships with the nice folks who regulate markets here in the United States <a href=”http://www.washingtonpost.com/wp-dyn/content/article/2008/08/20/AR2008082003898.html?hpid=topnews”>Washington Post<a/> Bear with me, this linking gizmo is still giving me fits. Then, when you’re lower than a snake’s belly, mosey on over to this: <a href=”http://www.nytimes.com/2008/08/21/opinion/21press.html”>New York Times</a>

There is a lot of money sloshing around the globe. Some of it is invested in enterprises designed to create a product/service/necessity (which generally means jobs/taxes). Some of it is sitting in investment funds which are chasing returns. I’d like to know if anyone truly has an idea of where the funds in this world are sitting and what uses it’s being put to (apologies to my English teachers). Much is said about lowering taxes on persons who supposedly do the prior thing with their funds because that makes life better for the non-investing class. Money that is chasing a return eventually benefits pensioners and university endowments…

The best headline I’ve seen this morning: “Positive Attitude Improves The Brian”.  I wonder what his wife is thinking.

Back to all the sloshing money… and I risk ‘simplistic’ here: tax cuts on persons earning more than $200,000 per annum led to more money in the hands of fewer persons who absolutely must have at least 8% per annum return on all that money which means there is too much money chasing too few returns.  Since the money is chasing the return, it is distorting markets (mostly comodities, currencies).  In the first story regarding oil futures, U.S. Government Regulators removed controls on these markets and relaxed oversight.  Next on the menu – runaway trading leads to oil at $147 per barrel (oil up, dollar down).  The non-investing class pays a higher percentage of its income for oil (and downmarket for food).  The investing class sees a higher return on its money.  It makes perfect sense.