By MICHAEL GRAY
Will cap and trade be helpful to the environment? No.
Will cap and trade be helpful to the monetary environment? Absolutely yes.
Cap and trade will be the next bubble to inflate the Wall St. bankers. The basic model used for cap and trade will be that carbon credits will be more and more expensive as the acceptable levels of emissions for industry will be reduced of time. Thereby guaranteeing larger and larger profits.
Look at the players that are involved in carbon trading, Goldman Sachs, JPMorgan and the largest Chicago-based commodities trading firms such as MF Global.
Goldman is on every end of this trade such as creating credits, trading credits and brokering credits. Goldman is on every side of the trade. The will generate credits through wind subsidiaries, sell long credits and sell short credits when it is profitable.
Although Washington will say this is a capital market-based solution, this is just another avenue for profit for debt-ridden money center banks.
Bank Holiday (cont.)
The stock market was left on its’ own for the beginning of the week and it traded lower and lower. The Plunge Protection Team was focusing on the bond market to lower the 10-year bond and prop up the dollar.
The moves in the 10-year this week were strange in that it moved lower, despite record Fed sales and disappointing macro-economic news. The dollar index bucked its 60-day trend of lower lows this week.
The PPT had to dip back into stocks late in the week to prop up the Dow on Thursday. As they moved to stocks the dollar index moved lower and closed the week below 80.
I’m hearing that the feds can’t play in both markets simultaneously, because actions in one retard movements in the other market. They have to play in the bond market to help the dollar almost daily because of the amount of dollar sellers.
How long can this go on? My guess is the third week of August. During the lowest volume-trading week because of vacations, the markets will close for more than three days to reset the banking industry and the dollar.
Needless to say this will bring new meaning to Labor Day.
For more on Wall and Washington and the economy see: http://mgray12.wordpress.com