Yes, There Was An Oil Bubble

Back in May of last year, with four dollar a gallon gas prices staring us in the face, I asked the question, "Is There A Gas Bubble?" Well, now I have the answer. Yes, there was a gas bubble, and it was caused, in part, by corporate criminals at Goldman Sachs and Morgan Stanley.

Greenberger, who wanted more regulation while he was at the Commodity Futures Trading Commission, not less, says it all happened when Enron was the seventh largest corporation in the United States. "This was when Enron was riding high. And what Enron wanted, Enron got."

Asked why they wanted a deregulated market in oil futures, Greenberger said, "Because they wanted to establish their own little energy futures exchange through computerized trading. They knew that if they could get this trading engine established without the controls that had been placed on speculators, they would have the ability to drive the price of energy products in any way they wanted to take it."

"When Enron failed, we learned that Enron, and its conspirators who used their trading engine, were able to drive the price of electricity up, some say, by as much as 300 percent on the West Coast," he added.

"Is the same thing going on right now in the oil business?" Kroft asked.

"Every Enron trader, who knew how to do these manipulations, became the most valuable employee on Wall Street," Greenberger said.

But some of them may now be looking for work. The oil bubble began to deflate early last fall when Congress threatened new regulations and federal agencies announced they were beginning major investigations. It finally popped with the bankruptcy of Lehman Brothers and the near collapse of AIG, who were both heavily invested in the oil markets. With hedge funds and investment houses facing margin calls, the speculators headed for the exits.

There were no shortages last year (certainly not a shortage of greedy bastards ready to rip off Americans), nor was there a dramatic rise in demand or consumption. And the irony is, when these bastards went under because they could no longer reach into our wallets because the government was threatening regulation, Wall Street panicked and the Congress caved into their demands for more of our money. John McCain even suspended his campaign to help the crooks help themselves to more of our money. Nice.