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Gasoline Price Manipulation? Looks like some proof here [View All]

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IChing Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Oct-08-06 10:44 PM
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Gasoline Price Manipulation? Looks like some proof here
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Is Goldman Sachs manipulating the gasoline price?

There has been some speculation that the Saudis have been driving down the price of oil to help Republicans in the upcoming elections. I personally haven't seen any evidence that the Saudis are doing this, but it sure looks as though Goldman Sachs is doing some strange trading in the gasoline futures market. Can the Saudis be far behind?

Check out this timeline:

President George W. Bush nominated Henry M. Paulson, Jr. to be the 74th Secretary of the Treasury on June 19, 2006. The United States Senate unanimously confirmed Paulson to the position on June 28, 2006 and he was sworn into office on July 10, 2006.

Before coming to Treasury, Paulson was Chairman and Chief Executive Officer of Goldman Sachs.

So what does Goldman do just weeks after Paulson is sworn in as Treasury Secretary?

It announces a subtle move that drives down gasoline prices, short-term.

Nice move, coming just months before the election.

This weekend (They always hide the good stuff in the low circulation Saturday edition.), Heather Timmons at the New York Times spilled the beans on the maneuver:

Politics and worries about oil supplies may have caused gasoline prices to go up at the pump earlier this year, but one big investment bank quietly helped their rapid drop in recent weeks, according to some economists, traders and analysts.

Goldman Sachs, which runs the largest commodity index, the G.S.C.I., said in early August that it was reducing the indexs weighting in gasoline futures significantly. The announcement did not make big headlines, but it has reverberated through the markets in the weeks since and some other investors who had been betting that gasoline would rise followed suit on their weightings.
They started unwinding their positions, and those other longs also rushed to the door at the same time, said Lawrence J. Goldstein, president of the Petroleum Industry Research Foundation.

The August announcement by Goldman Sachs caught some traders by surprise.The firm said in early June that it planned to roll its positions in the harbor contract into another futures contract, the reformulated gasoline blendstock, which is replacing the harbor contract at the end of the year because of changes to laws about gasoline additives.>>>>snip

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