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Pumping Up The Dow | Oil Watchdog

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Pumping Up The Dow

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Mon, Feb 11, 2008 at 11:26 am

    Pumping Up The Dow

    2-11-08 by Court

    Looks like the Dow Jones is looking for some
    speculative boost to the topsy-turvy, overall-sagging fortunes of Wall
    Street. Altria (aka Phillip Morris) and Honeywell are off of the Dow
    Jones Industrial Average. Chevron and Bank of America are
    in.   The Wall Street Journal alert says, "The change is the
    first in four years and reflects the index’s continued shift away from
    industrial firms and into other sectors such as energy and financial
    services." Odd, isn’t it? The "industrial average" moving away from
    "industrial firms." Hmmm. 

    What do banks and oil companies
    have in common?  Profits from speculative, virtual activity, not
    real production.  Oil and gasoline are both commodities pegged at
    artificially high values, leaps and bounds above actual production
    costs.  The subprime crisis is proving the fallout goes well
    beyond a sector of the economy when the bubble and bad bets are big
    enough. Big Oil’s bounty comes from a secretive, open-to-manipulation
    speculative market that reminds us of the Enron-era accounting. 
    In with the oil and banks, out with the folks who really make
    something. Hold onto your nest-eggs, shareholders, any short term
    inflation in the Dow is prone to a big Kaboom. 

    We are still waiting for the answer to the question Dugan asked about the cause of $100 per barrel crude oil. When will the regulators step in?

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