Commodity Bubble Proponent

Options Trader: Friday Outlook

Yesterdays fast money is a PERFECT example of CNBC's lack of a balance.

When they decide to actually discuss speculation in the oil market, they brought in Hirsch of the Hirsch report in 2005 that warned of impending peak oil. With all due respect to him, if you look up his bio (former Exxon Mobil guy, now with "Management Information Services", a company that doesn't have any profile whatsoever) you'll realize that he's part of "Dick Cheney oil fraternity", which also happens to include our good friend Matt Simmons (who's wonderful investment bank has never represented an oil major in any transaction in it's 3 decades of existence), Boone Pickens (who was such a shitty oil man that he decided to start his own hedge fund), and the other "Peak oil prognosticators". This clearly detracts from the discussion about what is really going on in the oil market and how the hedge funds are operating (and they never talk about this ever).

Matt "There's no speculation in the oil market" Simmons clearly demonstrates with the following article that he is a complete hypocrite who's opinion should not be trusted.

www.simmonsco-intl.com...

Here's the cliff notes version:

In the late 1990s, the price of oil was tanking with ample supply. Matt Simmons, in his ultimate wisdom, argued that speculators basically were artifically pushing down the price of oil and were more important as price determinants than fundamentals b/c of their large sums of money.

Fast forward to today, there's now ALOT more money from hedge funds, large investors, investment banks trading the physical oil and purchasing tanks to manipulate supply/demand data for futures trading, and at least two new deregulated dark trading platforms in the oil market, but in Mr. Simmons mind there is less speculation now than there was in 1998? I guess he's totally missed the boat on the following energy trading scandals in the last 5 years (and these are the ones we know about:

Enron
El Paso
Amaranth
BP's cornering of the propane market
Two other hedge funds getting busted for manipulating the gasoline market

And while this one wasn't illegal:

Goldman Sachs' rebalancing of it's Commodity Index that tanked the price of gasoline overnight.