Friday, October 07, 2011

Do Stock Brokerages Have the Right to Kill?

Why do big investment houses have the right to speculate in ways that can lead to death?  Speculation in food, in water.   While there are fortunes to be had in creating bottlenecks that restrict access to the very things people cannot survive without do nations and leaders have a moral right or duty to suppress this sort of perfidy?

A study released last week by Cornell University reveals that the relatively recent scourge of food insecurity manifested in substantial food price hikes is mainly the result of investor speculation and ethanol conversion.

"...The two sharp peaks in 2007/2008 and 2010/2011 are specifically due to investor speculation, while an underlying upward trend is due to increasing demand from ethanol conversion. The model includes investor trend following as well as shifting between commodities, equities and bonds to take advantage of increased expected returns. Claims that speculators cannot influence grain prices are shown to be invalid by direct analysis of price setting practices of granaries. Both causes of price increase, speculative investment and ethanol conversion, are promoted by recent regulatory changes---deregulation of the commodity markets, and policies promoting the conversion of corn to ethanol. Rapid action is needed to reduce the impacts of the price increases on global hunger."

If nothing else, it's high time we were honest with ourselves.  Our 21st century concept of deregulated market capitalism is entirely accommodating of practices that inflict suffering, even death on the most vulnerable for the sake of nothing more than maximizing investor profits.  And let's be honest enough to understand that these greed-driven practices will eventually spark retribution on us.


janfromthebruce said...

Well yes, and if one keeps supporting corporate party politics these kinds of global practices will con't.

The Mound of Sound said...

And you cling to the belief that your reborn party, now Official Opposition, isn't ready, willing and all to able to turn corporatist? Right.

Beijing York said...

Unfettered market speculation on a global scale is disaster economics. The anti-globalization movement was stopped in its tracks by the events of 9-11. The Seattle WTO mass protest was the pinnacle of the movement. But it seems that the economic meltdown of late has bolstered an even more dramatic movement that is far more focused and far reaching. It's basically fueled by an understanding that corporate interests and control have trumped all others, including elected governments. I'm trying to be hopeful that #occupywallstreet will continue to grow just as the protests in Greece, Spain and other EU countries gain momentum.

Anonymous said...

food speculation has been around for a bit. Even God himself played the market with insider tips. His advice to one of his own was, store up wheat lad, enough for seven years and boy, will you ever reap the profits.

I sort of thought god was above all of that and might well have put this advice on what passed for the web in those days rather than leaving the tip with a mere youngster albeit well connected pharoah wise.

The Mound of Sound said...

@BY - I so hope your take on the Occupy Wall Street movement pans out. Hopeful but not optimistic. The ties that bind economic and political corporatism are entrenched and resilient, the sort of thing that little short of a mass movement can sever. Perhaps OWS can instigate that type of follow-on populist movement. If so, I will gladly and humbly apologize for so underestimating my contemporaries.

Yet it seems the way ahead offers two paths - one leads to chaos, the other to an organized, broadly based, popular reform movement. Those who continue to milk the casino capitalism cow have a powerfully vested interest in seeing chaos prevail. It offers the justification for suppression and, at the same time, disaster capitalism.

@ES - yes we have a long history of food speculation but it was of a different kind. We used to allow farmers to sell futures in order to raise money required to fund their farming operations. Prices, however, remained driven by ordinary supply and demand forces.

Today's food speculation is of another order entirely. Now speculation drives prices, compounded by overpopulation and cyclical droughts and floods. We're also on the cusp of a similar situation for another essential resource - freshwater.