Black People : How Wall street starved Millions and got away With It

[Ankhur]

The Food Bubble: How Wall Street Starved Millions and Got Away With It

While Goldman Sachs agreed to pay $550 million to resolve a civil fraud lawsuit filed by the SEC, Goldman has not been held accountable for many of its other questionable investment practices. A new article in Harper’s Magazine examines the role Goldman played in the food crisis of 2008 when the ranks of the world’s hungry increased by 250 million. We speak to Harper’s contributing editor Frederick Kaufman. .........

........How did this work? Instead of a buy-and-sell order, like everybody does in these markets, they just started buying. It’s called "going long." They started going long on wheat futures. OK? And every time one of these contracts came due, they would do something called "rolling it over" into the next contract. So they would take all those buy promises they had made and say, "OK, we still—we’re just going to—we’ll buy more later. And plus we’re going to buy more now." And they kept on buying and buying and buying and buying and accumulating this unprecedented, this historically unprecedented pile of long-only wheat futures. And this accumulation created a very odd phenomenon in the market. It’s called a "demand shock." Usually prices go up because supply is low, right? That’s the idea. There’s not a lot of supply, so the price goes up. In this case, Goldman and the other banks had introduced this completely unnatural and artificial demand to buy wheat, and that then set the price up

http://www.democracynow.org/2010/7/16/the_food_bubble_how_wall_street

 

[Ankhur]

The Food Bubble: How Wall Street Starved Millions and Got Away With It

While Goldman Sachs agreed to pay $550 million to resolve a civil fraud lawsuit filed by the SEC, Goldman has not been held accountable for many of its other questionable investment practices. A new article in Harper’s Magazine examines the role Goldman played in the food crisis of 2008 when the ranks of the world’s hungry increased by 250 million. We speak to Harper’s contributing editor Frederick Kaufman. .........

........How did this work? Instead of a buy-and-sell order, like everybody does in these markets, they just started buying. It’s called "going long." They started going long on wheat futures. OK? And every time one of these contracts came due, they would do something called "rolling it over" into the next contract. So they would take all those buy promises they had made and say, "OK, we still—we’re just going to—we’ll buy more later. And plus we’re going to buy more now." And they kept on buying and buying and buying and buying and accumulating this unprecedented, this historically unprecedented pile of long-only wheat futures. And this accumulation created a very odd phenomenon in the market. It’s called a "demand shock." Usually prices go up because supply is low, right? That’s the idea. There’s not a lot of supply, so the price goes up. In this case, Goldman and the other banks had introduced this completely unnatural and artificial demand to buy wheat, and that then set the price up

http://www.democracynow.org/2010/7/16/the_food_bubble_how_wall_street

This form of economic genocide of 3rd world nations and especially Africa, has not been questioned or debated, nor has it been made presented for abolition in the new Finance Bill

 

[Ankhur]

Published on Thursday, July 22, 2010 by The Guardian/UK
Speculating on Food Can Starve the World's Poorest
Sudden price spikes and falls in food prices cannot be explained away – the banks are making a killing from betting on food
by Deborah Doane

In defending cocoa futures trading, Seth Freedman is an apologist for big bankers, the "mammon worshipping culture" he feigns to despise. He not only gets his facts wrong, he attacks the World Development Movement (WDM) and a wider social movement who are on the right side of social justice. The WDM warriors - slings, arrows and all - have it right, and he's got it wrong.

Freedman naively takes Goldman Sachs's riposte to our research at face value. Any journalist worth their salt knows that where there's smoke, there's fire. And if there was nothing behind our accusations, they wouldn't be on the defensive. Goldman said that our estimates of their profits from commodity speculation were "ludicrously overstated", which is odd considering we based the figures on their annual report. In the report, they state confidently that commodities speculation produced "particularly strong results" (that's a cool $5bn in profits by the way) for the bank in 2009.

Goldman Sachs further claim that our report is "horribly misinformed" on a number of fronts and that the "overwhelming majority" of their activities in commodity markets are on behalf of clients. This may be so, but it doesn't make it any more acceptable that they earn vast profits from an activity that affects the price of basic foods. Goldman Sachs is hardly a paragon of honest marketing to clients in the interests of the public good, as the recently imposed fines on the company would suggest.

Freedman goes on to quote Goldman Sachs saying: "Research by respected international bodies like the OECD demonstrates clearly that long-term trends, including increased meat consumption by the growing middle class in the emerging markets and the increased use of biofuels in the developed markets, have created a backdrop for global food shortages. Our own research supports those findings."

Of course Goldman Sachs's research supports what makes Goldman Sachs's profits! If Freedman had read our report, he would have found that we acknowledge that these examples and the effects of climate change have been causing food prices to rise gradually. What they cannot explain are the sudden price spikes and falls, which mirror the entry and exit of speculative hot money, which has increased the price of commodities and seriously increased volatility. He thinks we're half-baked. Well then so is Gary Gensler, the chairman of the US commodity regulator, as well as the European commissioner responsible for financial markets, the UN's Food and Agriculture Organisation and the United Nations Conference on Trade and Development. They also agree with our findings.

http://www.commondreams.org/view/2010/07/22-8