Greed Gone Too Far

I must say that at this point we must all be afraid. I generally believe that an orderly rise in gas prices has been more a reflection of the success of the economy not a headwind but what we saw last week was anything but orderly. I don’t know whose pulling the strings behind the scenes but they went for broke. Maybe they (the string-pullers) know their days are numbered as the political landscape shaping up for the fall is clear. With the Democratic nomination wrapped up for Obama, Wall Street along with the oil companies, drug companies, Wal-Mart (WMT) and any person making a six figure income are the targets of what will be an incredible movement to somehow punish success and make mediocrity the ultimate virtue. 

 

 

 

Some of the intended victims of this movement are trying to make nice and hoping that maybe the fact they have been job creates, life extenders, innovators that have made life in generally easier, provide the fuel that makes it possible for people to get to work and grandma’s house over the weekend. Then there are the folks that have manipulated the crude oil market. Maybe they weighed the pros and cons from their perspective and figured it doesn’t matter now if they play nice so they are going for broke. Obviously what when oil spikes to a one-day record moving up $5.50 its going to grab headlines outside the financial pages. When it shatters that one-day record by trading up $11.00 the subsequent session it goes beyond the headlines and becomes kerosene for the populist movement to forcible redistribute wealth.

 

Right now the calls on crude oil serve as both a catalyst and cover for latest and most outrageous move.  $150 by July 4^th sounds nuts and really is by any measure. Sure, it could happen, especially not that all the oil bears and shorts have been slain or driven into the hinterlands. But going there and deserving to be there are two different things to be sure.  The economic and political fallout from last week will reverberate for a long time even if crude prices behave normally and begin to give up ground. In the meantime the markets are afraid and the masses are going to be burning torches as they head to the ballot box.  I’m a solider for capitalism but I understand the outrages of Main Street there should be an equal or even greater outrage on Wall Street. Manipulation is part of a lot of facets of life including the stock market but this level of greed is asinine and stupid.

 

 

Once regular gas cracked $1.00 a gallon back in April 1999 it took 64 months to clear $2.00.

 

After cracking $2.00 a gallon in October 2004 regular gas took 31 months to clear the $3.00 a gallon hurdle.

 

It has been just 12 months since gas has been (mostly) north of $3.00 but at the rate its climbing there is a chance of cracking $4.00 within two weeks.