Has Anyone Learned Anything?

I should never read the Sunday paper ...

When the price of a gallon of gas got over four dollars, like most folks, I assumed that it was in response to the laws of supply and demand. I tended to disagree with the people who were claiming that the commodities markets were being manipulated by greedy traders.

I was wrong.

I really don't know who trades commodities. I have a slight inkling of the size of the markets and some understanding of the structure of the CBOE and the New York Mercantile Exchange. I do know however, the fundamentals of a market. Right now, the fundamentals of the markets for energy, as an example, dictate that prices should be lower. That is, there is less demand for energy, especially for natural gas and gasoline. Why are the commodity prices higher then? Why are markets that are so deep - meaning that the size of the contracts traded and the number of companies on the exchanges that trade them, so many - as thin as they seem to be and the prices of commodities as easy to manipulate? I know why ... because nobody has learned anything from the mortgage meltdown and the greed that caused it is alive and well.

Hope you all have a swell summer of driving around in your SUV's.