Understanding “Speculators”

The stock market plunged 170 points this morning and oil jumped over $3, allegedly based on a New York Times storythat Israel is carrying out military exercises as a rehearsal to bombing Iran. But actually, the Times story, written by the very able war correspondent Michael R. Gordon, is talking about Israeli training exercises from early June, not now.

It’s a rehash story with some new details. And it does in fact confirm the market rumors of June 5 and 6 that Israel was planning an Iranian attack to stop the rogue state’s nuclear-weapons program.

Recall that oil jumped almost $15 on Thursday, June 5, and Friday, June 6, largely in response to Middle East war worries. In fact, on Friday, June 6, stocks plunged 400 points as oil jumped $11 to close at its peak price of $140 a barrel.

It was this oil spike that helped trigger various Washington and presidential-campaign attacks on so-called oil “speculators.” But what the heck? Anybody with half a brain operating in the oil markets who thought there was going to be an Israeli-Iranian war would be buying spot and futures contracts — which is exactly what happened.

So far as I know, there is no new news coming out of Israel. Today’s Times story is a look backwards.