boutons_deux
12-01-2011, 05:18 PM
As The GOP Slashes Regulator’s Budget, Runaway Speculation In Cotton Market Hurts Farmers And Consumers
Such financial speculation helped drive an overheated cotton market to record levels of $2.17 a pound on March 7. Before peaking, cotton prices had risen by more than 140 percent in less than 18 months. … [T]his speculative money from investors who’ll never actually take delivery of cotton is distorting the futures market, driving up cotton prices, and thus raising prices for apparel retailers and consumers alike.
Sifting through CFTC historical data, McClatchy found that the total number of outstanding futures contracts grew by about 80 percent from 1990 to 2010. That’s big growth in a historically small market. Moreover, the number of contracts doubled between 2004 and 2010. This parallels the timeframe when institutional investors began to play seriously in commodity markets, aided by popular commodity indices developed by investment bank Goldman Sachs and the now-disgraced financial giant American International Group.
http://thinkprogress.org/economy/2011/12/01/379524/cotton-speculation-cftc/
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Guess who gets screwed and who is doing the screwing?
Such financial speculation helped drive an overheated cotton market to record levels of $2.17 a pound on March 7. Before peaking, cotton prices had risen by more than 140 percent in less than 18 months. … [T]his speculative money from investors who’ll never actually take delivery of cotton is distorting the futures market, driving up cotton prices, and thus raising prices for apparel retailers and consumers alike.
Sifting through CFTC historical data, McClatchy found that the total number of outstanding futures contracts grew by about 80 percent from 1990 to 2010. That’s big growth in a historically small market. Moreover, the number of contracts doubled between 2004 and 2010. This parallels the timeframe when institutional investors began to play seriously in commodity markets, aided by popular commodity indices developed by investment bank Goldman Sachs and the now-disgraced financial giant American International Group.
http://thinkprogress.org/economy/2011/12/01/379524/cotton-speculation-cftc/
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Guess who gets screwed and who is doing the screwing?