Ben Stein's column in the NY Times today offers a nifty idea for a new HBO series. But Stein's real concern is the speculation in energy futures. Oil and gas prices seem to keep going up, even when you would think demand should start to slacken off. Stein believes prices keep rising because the hedge-fund managers of Greenwich are speculating in energy like crazy. And now, brokers and private bankers are steering their clients into oil futures as well.
A sign that another speculative bubble is about to burst?
Irrational exuberance over energy has already claimed a victim: twin ETF's conceived by Yale's Robert Shiller. MacroShares Oil Up and Macroshares Oil Down were intended to allow investors to bet on oil's ups and downs although the funds did not actually buy or sell oil contracts. The ETFs, launched when oil was about $60 a barrel, might have worked if oil had not soared much above $100. But it did, and the WSJ reports that the funds will be liquidated. See also Forbes' Accidental Gusher.
What about it, wealth managers? Are you still putting clients into energy futures, or are you telling them it's time to bail out?
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