maximax

Speculation, Swaps and the Price of Oil

Dan Walker, this old conspiracy theory that the Fed does what their shareholders want is... well, an old conspiracy theory. Rubbish. JP Morgan et al have no say in what the Fed does.

I just read the linked article. Oh man, academia at its worst. The paper reads like a student essay. Those dudes downloaded some data from Haver and slapped some pretty standard econometrics techniques on it. The citations say a lot about the standing of the authors in this field... newspaper articles and a few seminal econometrics articles that one always has to quote when the methods are applied. The authors seem to have no clue of the oil market. They do not demonstrate any knowledge of the data (most of it would have been freely available at the EIA), statements like "OPEC having only 40% of world production" and the finding that the presence of cointegration between longer term oil futures and oil stocks is evidence for hoarding smack of ignorance. They do not even seem to be aware of the role of middle distillates in the current market, they would at least have to acknowledge it, even if they exclude it in their analysis. But their model is too simple to capture the oil market, as far as I am concerned I will not put any value into this paper's findings.