Most people with half a brain already instinctively knew this, but for those who want just the facts, here ya go. Trading futures is a risky business on a huge scale. Instead of all the fun you might have going to Las Vegas or Atlantic City, you could just lose your money sitting at your desk.

Of course betting on commodities strikes me as perverse, since peoples' lives depend on food and energy.

Study links oil prices to investor speculation

By H. JOSEF HEBERT, Associated Press Writer Wed Sep 10, 1:03 PM ET

Speculation by large investors — and not supply and demand for oil — were a primary reason for the surge in oil prices during the first half of the year and the more recent price declines, an independent study concluded Wednesday.

The report by Masters Capital Management said investors poured $60 billion into oil futures markets during the first five months of the year as oil prices soared from $95 a barrel in January to $145 a barrel by July.

Since then, these investors have withdrawn $39 billion from those markets as prices have retreated dramatically, the report said. Oil traded at about $102 a barrel Wednesday on the New York Mercantile Exchange.

"We have clear evidence the fund flow pushed prices up and the fund flow pushed prices down," said Michael Masters of Masters Capital Management, calling the amount of money moving into oil futures markets by large institutional investors in the early part of the year "way off the scale."

Masters said its analysis shows investors "began a massive stampede for the exits" on July 15 and that this caused the price decline.

"These large financial players have become the primary source of the dramatic and damaging volatility seen in oil prices," concluded the report.

The report was released Wednesday by House and Senate sponsors of bills to put additional curbs on oil market speculation and comes in advance of a report on oil market speculation expected possibly this week by the Commodities Futures Trading Commission. The commission regulates commodity markets.

Sen. Maria Cantwell, D-Wash., a sponsor of an anti-speculation bill, said the Masters report challenges CFTC claims to date that supply and demand forces — and not excessive speculation — has driven up oil prices.

"This analysis illustrates that when oil speculators poured large amounts of speculative money into oil markets, prices skyrocketed just as they were hoping ... And when the speculative money got pulled out, prices tumbled," she said.

Sen. Byron Dorgan, D-N.D., said he wants to know "how oil speculators were able to drive prices up and down while the CFTC was asleep at the switch."

An interagency task force, led by the CFTC, concluded in an interim report last July that "fundamental supply and demand factors" influence the oil markets and that the data "does not support the proposition that speculative activity has systematically driven changes in oil prices."

Senate critics of the regulatory agency charged that report was based in flawed evidence.

"The CFTC has its head in the sand," said Rep. Bart Stupak, D-Mich., chairman of the House Energy and Commerce investigations subcommittee.

Stupak said the Masters report shows that that oil prices soared when speculators poured money into future markets even as the federal Energy Information Administration was forecasting supply would exceed demand.

Congress for months has been considering various measures aimed at curbing oil market speculation, but those efforts have been thwarted amid disputes over other energy issues from taxing oil companies to new offshore drilling.

Legislation before the Senate would put limits on the amount of oil certain traders, interested only in speculation, would be allowed to purchase in futures markets and give new authorities and staff to the CFTC to regulate oil markets.

(This version CORRECTS SUBS 3rd graf to correct price, $102 sted $1.02. Moving on general news and financial services.)

Source: http://news.yahoo.com/s/ap/20080910/ap_on_go_co/oil_speculation

With all the bad news that we hear of murder, terrorism, the war in Iraq, the spread of nuclear weapons, poverty, suffering, homelessness, hunger, disease, etc., it is often quite easy to get so discouraged by the events on the world stage to do anything. We feel helpless in the face of world events. I feel it. I know you do too.

I know that when I get personally discouraged, especially during the darkness of winter, that I literally have to start counting my blessings to get out of my funk. I don't want to sound trite here, because I really do this. Instead of dwelling on the negative, I compare how I'm living with how most of the rest of the world lives, and I know that things really aren't so bad after all.

Lately, I am starting to think of how things will soon be much, much better. Not just for me. No. For most of us. Given the state of politics in the US, I dare say that we will probably elect a Democrat as President in 2008 and the election of a fillibuster-proof Senate (60 vote majority, not counting Lieberman). Although I still want Gore to run, I can support any of the Democratic candidates...and will. There is not a Republican in the race that I would support because I want change...major change. Obama's entrance into the contest has certainly raised hope in a lot of places. I like him too.

So, all things are possible. We can do more than dream. We can plan to work in a campaign to make things happen. Instead of feeling helpless, we can feel powerful and be powerful.

We can look for candidates who want to house the homeless, to feed the hungry, to bring healthcare to the sick and non- or under-insured, to add more police again to our streets as crime is now rising again, to reduce our oil addiction and reduce greenhouse gases, to restore America's leadership and reputation as a democratic nation, to strengthen Social Security to help those retired and nearing retirement (as I am), to help those poor people on the Gulf coast who are still suffering from Katrina and government inaction even now, and...well the list is almost endless. "Imagine," as John Lennon sang. All things are possible with new beginnings.

The greed of corporate capitalists never ceases to amaze me. Yet most Katrina victims are still without housing, Bush is again trying to kill Social Security, global warming continues, the price of gas is forcing price inflation while most worker bee wages are frozen, and we don't have universal healthcare. And I bet some of these folks attend a church as pretend Christians.

I once worked for Phonezilla (AT&T) and am glad I work for a tiny company where people are treated well. I pray for all the people that suffer from corporate capitalist greed.

CBS News has reported that in 2006, more than 100 of the Fortune 1,000 biggest companies have terminated or frozen pension plans, complaining of the costs.  But in many cases the companies' leaders' benefits are getting bigger.  For example, AT&T's CEO, Edward Whitacre, will be entitled in November to a yearly pension of $5.4 million for life.  The Wall Street Journal found that 45 percent of AT&T's pension expenses go to just 1,500 top executives - less than 1% of the total number of AT&T workers.  The rest covers the other 189,000 employees. [Source]