To properly explain why oil prices are so high, I enlisted the support of my friends Doug Wood and Rob Bellon to help me tell the story a little differently. In lieu of my normal offering in Off The Reservation, we have produced an 8-minute video called “The Book of Morgan,” which tells how investment banking giant Morgan Stanley came to rule the oil world.
The story itself is an age-old chronicle of greed and corruption filled with intrigue and dirty dealings. It illustrates how Morgan Stanley, among others, took the hidden world of commodities trading from a $10 billion industry to a $450 billion business by maneuvering through generous loopholes created by Congress. It shows how Morgan Stanley not only dominates the trading arena but how it has become a full-fledged Big Oil company from transportation to terminal storage to having an ownership stake in the very exchange that half of the world’s oil is traded on.
So with that, I invite you to watch the video and judge for yourself why the price of oil has skyrocketed. The purpose of presenting it this way is to open more eyes as to how rotten our system truly is and to elevate the dialogue about one of the most crucial economic elements of our daily lives. In the next several months we will be bombarded with finger pointing and accusations with respect to gasoline prices as the presidential campaign heats up. But few of the arguments you will hear will resemble the truth. For the truth, my friends, can only be found in the gospel according to Wall Street−and “The Book of Morgan.”