Confidential Commodities Futures Trading Commission (CFTC) documents released by Sen. Bernie Sanders (I-Vt) on Aug. 18, show how the takedown of Glass-Steagall has enabled the big crooks of Wall Street to steal from the public by bringing hyperinflation to the gasoline-pump.
Wall Street is using taxpayers' bailout billions to profit by bidding up the price of commodities such as oil, via futures markets. All the details are government secrets, however. But no longer!
Among other data, Sanders released a secret CFTC chart which showed the West Texas Intermediate (WTI) crude oil futures positions of major international corporations on June 30, 2008. Oil had reached $150/barrel in May, and gasoline had approached $4/gallon at the pump, just as it has recently. The futures positions revealed by the CFTC data included futures proper, combined with the secondary over-the-counter commodities futures derivatives pioneered by Goldman Sachs, which allow Wall Street gamblers to speculate on commodities futures, and control commodities prices, without even putting up the money to buy futures. Derivatives of derivatives: pure monopoly money!
Number one in the chart is Goldman Sachs, with 452,000 long and 419,000 short positions,— one single company controlling 32.5% of WTI open interest, according to calculations reported by Izabella Kaminska on FT/Alphaville on Aug. 18. Among the other Wall Street crooks, Morgan Stanley held 313,000 long and 320,000 short positions; JP MorganChase 200,000 long and 245,000 short; Lehman Bros 155,000 long and 146,000 short; and Merrill Lynch 115,000 long and 122,000 short.
Remembering that the reason for futures markets is supposedly to lock in future commodities supplies, compare the banksters' positions with those of the airlines, which have a real interest in insuring future fuel supplies at reasonable, predictable prices. Southwest Airlines was renowned for its hedging: its futures contracts, the most for any airline in the world, were 43,000 long and 2,000 short positions. Northwest Airlines had 602 long and 5,000 short positions.
Among British corporations, Barclays Bank had 277,000 long and 277,000 short positions. British Airways: 1,000 long and 3,000 short positions. Britain's Virgin Atlantic Airways, 239 long and 3,000 short positions.
Glass-Steagall limited banks' securities and derivatives trading to less than 2% of their assets, in case such trading might be necessary to help service customers' accounts. Then-Fed Chairman Alan Greenspan raised these limits first to 5%, then 10%, then 25%. When Glass-Steagall was repealed in 1999, all the limits went out the window, a process also furthered by Phil Gramm's so-called Commodities Futures Modernization Act of 2000, known as the "Enron Bill," which totally deregulated derivatives.
The true issue at hand however, is that if Glass Steagall is not implemented now, the whole world will crumble under hyperinflationary ruin. The matter is not about one single commodity, its about the whole Trans-Atlantic system coming down and taking civilization with it.