...the oil producers eight...
There's the important bit. If it really
was a supply issue, the oil producers would be seeing the increased profits. Nobody else. But it's investors seeing all of the profits on the increased prices, not producers.
That's supports my claim.
The mortgage crisis was a multi-faceted problem as well. Speculators got sold a horrendous investment that they kept passing along the line until people couldn't take bad debts off other's hands anymore. The federal got involved years ago forcing more high risk mortgages that the financial managers figured out how to make a buck off of. It wasn't the selling that made the mortgages a toxic asset rather complete dishonesty about the return. Oil speculators aren't buying debt, they are buying shares of available production. Buying a bad loan with paper returns is not the same thing as buying something that will have value(or won't if you guess wrong).
The speculators knew these were bad investments when they purchased them. They also knew that they could be passed along at a profit or that people would simply refi to avoid foreclosure. You put too much blame on the Feds, BTW. The federal government had nothing to do with the vast majority of the subprime and alt-A loans. They were involved in the very minimal FHA side of things (a drop in the bucket in the whole mortgage mess).
Subprime and alt-A were the ****ty loans that allowed people to refi in order to avoid foreclosure and get away with NINA (no income, no asset), respectively. These loans were
entirely driven by investors. 100%. Nothing at
all to do with the Federal government. Option ARMs (which are the stereotypical 'toxic loan')? Investor driven.
115% LTV seconds? Investor driven.
Whenever someone says that the government "forced" lenders to make stupid loans to ****ty borrowers, the first thing I think is that they aren't really all that aware of what went on during the mortgage mess. The worst of the worst products were things that
investors dreamed up. These investors applied short term thinking to long term investments. This is what happened. The government is not the primary source of blame, except in the sense that they took away the barriers that were in place that prevent these simple-minded short-sighted morons from doing what they did.
The first rule of life is that people who make a lot of money are just as dumb, and are often far dumber, than those who don't. The only real difference is, when poor people are stupid, the effects are localized and other poor people tend to be the only ones affected. When rich people are stupid, it's global and the effects of the stupidity are inversely proportional to income.
Every major man-made disaster in history has been a result of rich people being stupid. And in every instance, rich people were the least affected by their stupidity. Sure, they were affected a little bit, but people who weren't rich ended up in far worse shape.
I only mention the above because that fact of life must be one's primary premise when approaching issues like this. When one realizes that almost everything that can be discussed involves stupid, short-sighted, selfish morons making stupid, selfish, short-sighted decisions based in their stupid, selfish, short-sighted approach to life, one can realize that nothing exists which cannot
Not all speculators are wealthy people. In fact many people have commodities in their retirement portfolios. And I still assert that there is more damage from outside(government regulation) interference than any internal damage(I'm not letting the industry off the hook).
It you added up all of the non-wealthy speculators, they probably have less money in the pool that the wealthiest one does. If you averaged everything out, they are probably closer to breaking even on their investment than they are to profiting (i.e. If you include the cost of commodities speculation which is passed on directly to the consumer).
People react to the conditions present. Predatory would be intentionally creating a sellers market by cutting the supply short or forcing less supply on the demand end through dishonest means.
But that's just it, though,
they are the primary condition present that they are reacting to.
It's just as predatory to create false demand for a commodity, and when the investment structure is already a parasitic one by it's very nature (which is my stance about all commodities trading), creating false demand makes it even worse, IMO. (False demand being defined as demand that is completely unrelated to consumption).
Just because something is parasitic and predatory, though, doesn't mean it's illegal. Lawmakers are just as short-sighted, selfish and stupid as the rest of the population.