Oil spike and fall caused by investors.. Question?
Posted: September 10th, 2008, 5:19 am
USA Today
I was trying to understand exactly what this is saying. Index traders put money into commodity markets to make it go up. Then they pulled money out. Is that to make it go down again? Wasn't the "Farm Bill" supposed to stop this?
I guess the easy answer is exactly that "it is caused by investors!"
Thanks...
USA Today wrote:The report, co-authored by the portfolio manager of Masters Capital Management, said from January to May 27 index traders poured $60 billion into commodity markets, causing a big spike in oil prices.
When Congress began holding hearings about speculation from May to July, traders pulled $39 billion from the market, the report says.
I was trying to understand exactly what this is saying. Index traders put money into commodity markets to make it go up. Then they pulled money out. Is that to make it go down again? Wasn't the "Farm Bill" supposed to stop this?
I guess the easy answer is exactly that "it is caused by investors!"
Thanks...