Planting the seeds of conspiracy theories

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The New York Times artfully feeds the conspiracy theorists with some facts, true in and of themselves, which can be taken by those with little experience or knowledge as evidence of a vast right wing conspiracy, to borrow a phrase from Senator Clinton. With enough time, the left wing media food chain (again, a hat tip to the Senator) will no doubt start claiming they have proof of evil machinations intended to dupe the poor voters into supporting the GOP.

The facts come from an article by Heather Timmons published Friday. The headline reads,

"Change in Goldman Index Played Role in Gasoline Price Drop"

Timmons names the G.S.C.I commodity index and avers

The announcement did not make big headlines, but it has reverberated through the markets in the weeks since and some other investors who had been betting that gasoline would rise followed suit on their weightings.

Wow! Sounds pretty sinister. Changing the arcane signals sent to the market by their proprietary commodity index is almost like a conspiracy. Add in the fact that Henry Paulson recently left Goldman Sachs to become Treasury Secretary, and shazam, you have a full blown conspiracy, if your standards are as low as those of most conspiracy theorists, at least. Of course, you have to ignore all the important Democrats who have come out of Goldman Sachs, but never let a few facts get in your way when you're spinning conspiracies.

But other information, a little later in the article, combined with basic knowledge of how markets work, dispells thios notion.

The firm said in early June that it planned to roll its positions in the harbor contract into another futures contract, the reformulated gasoline blendstock, which is replacing the harbor contract at the end of the year because of changes to laws about gasoline additives.

Later in June, Goldman said it had rolled a third of its gasoline holdings into the reformulated contracts but would make further announcements as to whether the remainder would be rolled over. Then in August, the bank said it would not roll over any more positions into gasoline and would redistribute the weighting into other petroleum products. [emphasis added]

The energy commodities which replaced the harbor contract, including gasoline futures, would have surged upward, if the change in the commodity index had any effect at all. But the entire process of investors changing positions in these markets is driven far more by their own reading of trends, their own cost of holding inventories, and other market—driven realities, not by the changes of one invetsment house in the way it calculates an index of commodity prices.

The Times maintains deniability here. It is not exactly peddling a conspiracy theory itself, and it remains factual. But this is bait for the nutjobs.

Ed Lasky, Richard Baehr, and Thomas Lifson   10 01 06

The New York Times artfully feeds the conspiracy theorists with some facts, true in and of themselves, which can be taken by those with little experience or knowledge as evidence of a vast right wing conspiracy, to borrow a phrase from Senator Clinton. With enough time, the left wing media food chain (again, a hat tip to the Senator) will no doubt start claiming they have proof of evil machinations intended to dupe the poor voters into supporting the GOP.

The facts come from an article by Heather Timmons published Friday. The headline reads,

"Change in Goldman Index Played Role in Gasoline Price Drop"

Timmons names the G.S.C.I commodity index and avers

The announcement did not make big headlines, but it has reverberated through the markets in the weeks since and some other investors who had been betting that gasoline would rise followed suit on their weightings.

Wow! Sounds pretty sinister. Changing the arcane signals sent to the market by their proprietary commodity index is almost like a conspiracy. Add in the fact that Henry Paulson recently left Goldman Sachs to become Treasury Secretary, and shazam, you have a full blown conspiracy, if your standards are as low as those of most conspiracy theorists, at least. Of course, you have to ignore all the important Democrats who have come out of Goldman Sachs, but never let a few facts get in your way when you're spinning conspiracies.

But other information, a little later in the article, combined with basic knowledge of how markets work, dispells thios notion.

The firm said in early June that it planned to roll its positions in the harbor contract into another futures contract, the reformulated gasoline blendstock, which is replacing the harbor contract at the end of the year because of changes to laws about gasoline additives.

Later in June, Goldman said it had rolled a third of its gasoline holdings into the reformulated contracts but would make further announcements as to whether the remainder would be rolled over. Then in August, the bank said it would not roll over any more positions into gasoline and would redistribute the weighting into other petroleum products. [emphasis added]

The energy commodities which replaced the harbor contract, including gasoline futures, would have surged upward, if the change in the commodity index had any effect at all. But the entire process of investors changing positions in these markets is driven far more by their own reading of trends, their own cost of holding inventories, and other market—driven realities, not by the changes of one invetsment house in the way it calculates an index of commodity prices.

The Times maintains deniability here. It is not exactly peddling a conspiracy theory itself, and it remains factual. But this is bait for the nutjobs.

Ed Lasky, Richard Baehr, and Thomas Lifson   10 01 06