Big Banks Today Control "Commodities To Countries"
Cross swaps in oil futures reportedly yielded mega profits of over $50 billion last year on a turnover of $2500 billion, a commodity whose global stock value has been traditionally less than $100 billion. In short each barrel of oil was swapped 20 to 25 times on paper among a closed cartel mostly at the trader friendly London ICE Exchange as volatility generated the super profits.
The big four, the Wall Street bankers, Goldman Sachs, Morgan Stanley, and European oil majors BP and Shell—who hold the major stocks of North Sea Brent Oil and West Texas Intermediate—were the prime movers and shakers. Incidentally they control the supply chain around Europe with the help of friendly Governments, lax regulators, and some quick decisive investment in stocking and pipeline facilities.
Over 80 million barrels of oil are being hoarded in super tankers around the world today, as per Frontline which owns the largest tanker fleet worldwide. Morgan Stanley, BP, and Shell’s own terminal stocking facilities in Kuwait, the UAE, Africa, Europe, and the Americas are used to soak up excess oil stocks and quickly dump back the same to create a market volatility at Europe’s future markets.
"Contango" trades and falling charter prices have ensured the viability of these giant flotillas, and Morgan Stanley recently leased out the giant super tanker Agenta to enhance the grip. With a liberal price gap of $8 on March futures and $21 on September rates it is profitable to buy spot oil and hire the super tankers today at around $1 a barrel for 3 to 6 months.
Veterans of manipulation of Governments in the West African oil deals, the big four are today debt managing Europe’s excessive leverage through a host of "off balance sheet transactions," through a myriad of financiers in lieu of regulators looking the other way at the Commodity exchanges.
Thus it is not only Greece who should be blamed for peddling future airport and lottery receipts. Even the UK and EU are to blame for off balance sheet financing deals comprising of PFI to reduce public sector cost (reportedly even a few prisons are off balance sheet expenditures). No wonder regulators can’t squarely deal with the "London loophole" despite mounting public pressure to levy a transaction tax on swaps