MSNBC has an article on the land grab for potential solar thermal power sites in the US south west - Wall St. firm behind slow solar pace on federal lands?.

Not a light bulb's worth of solar electricity has been produced on the millions of acres of public desert set aside for it. Not one project to build glimmering solar farms has even broken ground.

Instead, five years after federal land managers opened up stretches of the Southwest to developers, vast tracts still sit idle.

An Associated Press examination of U.S. Bureau of Land Management records and interviews with agency officials shows that the BLM operated a first-come, first-served leasing system that quickly overwhelmed its small staff and enabled companies, regardless of solar industry experience, to squat on land without any real plans to develop it.

At a time when the nation drills ever deeper for oil off its shores even as it tries to diversify its energy supply, the federal government has, so far, failed to use the land it already has — some of the world's best for solar — to produce renewable electricity.

Nowhere is this more evident than in Nevada, where a Goldman Sachs & Co. subsidiary with no solar background has claims with the BLM on nearly half the land for which applications have been filed, but no firm plan for any of the sites. ...

Congress in 2005 gave the Interior Department a deadline: approve 10,000 megawatts, or about five million homes' worth during peak hours, of renewable energy on public lands by 2015. Reaching that goal was left to the BLM, which oversees federal land and knows oil, gas and mining leases but is new to solar.

The Bush administration, however, kept BLM's focus on oil. BLM's database of solar applications shows many languished for years while the agency approved more than 73,000 oil and gas leases in the last five years. BLM has yet to give final approval to one solar lease.

BLM's solar leasing system ended up allowing developers to lay claim to prime sites — many located in the deserts that span California, Nevada and Arizona. All developers had to do was fill out an application, pay a fee and file development plans. ...

An AP review of BLM's applications database found Cogentrix has staked more development claims in the Southwestern deserts than any other company. In Nevada alone, Cogentrix has applied for exclusive development rights on nearly as much federal land as all other companies combined. Its active lease applications cover about 120,000 acres — the equivalent of more than eight Manhattans.

"Goldman Sachs was one of the first applicants to dot the map with potential projects, and since then they haven't moved on any of them," said Gregory Helseth, the BLM's new renewable energy project manager in southern Nevada. "You can't hold the land forever. You can't be a prospector and hope somebody down the road wants to buy."

A Goldman representative defended the firm's solar investments, saying the Wall Street titan has since gained experience through its 2009 purchase of an aged solar facility in San Bernardino, Calif., that it was moving forward in good faith and was not blocking anyone. The company also announced this month it had reached a deal to build a small, 250-acre project in Colorado on private land.

"While we continue to pursue development of projects utilizing public lands in the Southwest, we have not held land reservations if they are determined not to be viable for future solar development," company spokesman Ed Canaday said in an e-mail.

The Obama Administration has identified 14 promising "fast-track" projects targeted for approval by year's end so they can qualify for stimulus funding. None of Goldman's claims are among them.

When completed, these facilities could generate 6,000 megawatts, enough electricity for several million homes during peak hours. There is a ready market for big plants, with California's strict climate change laws creating a huge demand among utilities for solar power.

Companies that hold BLM solar development applications are prohibited from selling them, but the companies themselves can be sold along with the potentially lucrative applications.

Tempe, Ariz.-based First Solar, an industry leader and a maker of solar panels, bought two smaller companies, including the companies' land rights and power agreements with utility companies. First Solar paid about $400 million for OptiSolar and $285 million for NextLight. Analysts say the sale value of both companies likely was increased because they held BLM solar development applications. ..

In September, at least two of the "fast-track" projects — by Oakland, Calif.-based Brightsource Energy and by First Solar-owned Nextlight — are expected to get the first solar permits issued by BLM. Bringing plants online however will likely take years.

These fast-tracked sites are located on either side of the dormant Goldman lease near Roach Dry Lake, located about 35 miles south of Las Vegas, and will utilize the same Southern California Edison transmission lines that pass over Goldman's site.

The Independent has a look back at the great commodity speculation bubble of a couple of years ago - Johann Hari: How Goldman gambled on starvation.

By now, you probably think your opinion of Goldman Sachs and its swarm of Wall Street allies has rock-bottomed at raw loathing. You're wrong. There's more. It turns out that the most destructive of all their recent acts has barely been discussed at all. Here's the rest. This is the story of how some of the richest people in the world – Goldman, Deutsche Bank, the traders at Merrill Lynch, and more – have caused the starvation of some of the poorest people in the world.

It starts with an apparent mystery. At the end of 2006, food prices across the world started to rise, suddenly and stratospherically. Within a year, the price of wheat had shot up by 80 per cent, maize by 90 per cent, rice by 320 per cent. In a global jolt of hunger, 200 million people – mostly children – couldn't afford to get food any more, and sank into malnutrition or starvation. There were riots in more than 30 countries, and at least one government was violently overthrown. Then, in spring 2008, prices just as mysteriously fell back to their previous level. Jean Ziegler, the UN Special Rapporteur on the Right to Food, calls it "a silent mass murder", entirely due to "man-made actions."

Earlier this year I was in Ethiopia, one of the worst-hit countries, and people there remember the food crisis as if they had been struck by a tsunami. "My children stopped growing," a woman my age called Abiba Getaneh, told me. "I felt like battery acid had been poured into my stomach as I starved. I took my two daughters out of school and got into debt. If it had gone on much longer, I think my baby would have died."

Most of the explanations we were given at the time have turned out to be false. It didn't happen because supply fell: the International Grain Council says global production of wheat actually increased during that period, for example. It isn't because demand grew either: as Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi has shown, demand actually fell by 3 per cent. Other factors – like the rise of biofuels, and the spike in the oil price – made a contribution, but they aren't enough on their own to explain such a violent shift.

To understand the biggest cause, you have to plough through some concepts that will make your head ache – but not half as much as they made the poor world's stomachs ache.

For over a century, farmers in wealthy countries have been able to engage in a process where they protect themselves against risk. Farmer Giles can agree in January to sell his crop to a trader in August at a fixed price. If he has a great summer, he'll lose some cash, but if there's a lousy summer or the global price collapses, he'll do well from the deal. When this process was tightly regulated and only companies with a direct interest in the field could get involved, it worked.

Then, through the 1990s, Goldman Sachs and others lobbied hard and the regulations were abolished. Suddenly, these contracts were turned into "derivatives" that could be bought and sold among traders who had nothing to do with agriculture. A market in "food speculation" was born.

So Farmer Giles still agrees to sell his crop in advance to a trader for £10,000. But now, that contract can be sold on to speculators, who treat the contract itself as an object of potential wealth. Goldman Sachs can buy it and sell it on for £20,000 to Deutsche Bank, who sell it on for £30,000 to Merrill Lynch – and on and on until it seems to bear almost no relationship to Farmer Giles's crop at all.

If this seems mystifying, it is. John Lanchester, in his superb guide to the world of finance, Whoops! Why Everybody Owes Everyone and No One Can Pay, explains: "Finance, like other forms of human behaviour, underwent a change in the 20th century, a shift equivalent to the emergence of modernism in the arts – a break with common sense, a turn towards self-referentiality and abstraction and notions that couldn't be explained in workaday English." Poetry found its break with realism when T S Eliot wrote "The Wasteland". Finance found its Wasteland moment in the 1970s, when it began to be dominated by complex financial instruments that even the people selling them didn't fully understand.

So what has this got to do with the bread on Abiba's plate? Until deregulation, the price for food was set by the forces of supply and demand for food itself. (This was already deeply imperfect: it left a billion people hungry.) But after deregulation, it was no longer just a market in food. It became, at the same time, a market in food contracts based on theoretical future crops – and the speculators drove the price through the roof.

Here's how it happened. In 2006, financial speculators like Goldmans pulled out of the collapsing US real estate market. They reckoned food prices would stay steady or rise while the rest of the economy tanked, so they switched their funds there. Suddenly, the world's frightened investors stampeded on to this ground.

So while the supply and demand of food stayed pretty much the same, the supply and demand for derivatives based on food massively rose – which meant the all-rolled-into-one price shot up, and the starvation began. The bubble only burst in March 2008 when the situation got so bad in the US that the speculators had to slash their spending to cover their losses back home.

When I asked Merrill Lynch's spokesman to comment on the charge of causing mass hunger, he said: "Huh. I didn't know about that." He later emailed to say: "I am going to decline comment." Deutsche Bank also refused to comment. Goldman Sachs were more detailed, saying they sold their index in early 2007 and pointing out that "serious analyses ... have concluded index funds did not cause a bubble in commodity futures prices", offering as evidence a statement by the OECD.

How do we know this is wrong? As Professor Ghosh points out, some vital crops are not traded on the futures markets, including millet, cassava, and potatoes. Their price rose a little during this period – but only a fraction as much as the ones affected by speculation. Her research shows that speculation was "the main cause" of the rise.

So it has come to this. The world's wealthiest speculators set up a casino where the chips were the stomachs of hundreds of millions of innocent people. They gambled on increasing starvation, and won. Their Wasteland moment created a real wasteland. What does it say about our political and economic system that we can so casually inflict so much pain?

The FT has a post pointing to a Goldman Sachs report on the oil market, noting the drop in US demand has been entirely offset by a rise in Chinese demand - China, setting the world’s oil prices .

They also point to a report from the IEA, pointing out that some Saudi Aramco grades are no longer available to European customers, "in favour of Asian markets and domestic power consumption".

The Daily Reckoning reports that Goldman Sachs is calling for the oil price to return to the US$100 per barrel mark - Goldman Calling For US$100 Oil By 2011.

When Goldman Sachs makes a prediction about the price of an asset, you can never be sure if it's a self-fulfilling prophecy or a psychological investment operation exercised by an elite trading team. Is Goldman calling for US$100 oil by 2011 because it's already long oil? Or is it just early on the trade in predicting that oil demand will recover faster than oil supply will grow and that the result will be higher prices this year and next?

Hmmn.

Goldman's oil analyst Jeffrey Currie is referring to what we termed last year, "The Long Aftershock." It refers to the 2007 oil price crash sowing the seeds for the next oil bull market. Currie says his analysis leads to the conclusion that, "By 2011, the [oil] market is back to capacity constraints...The financial crisis created a collapse in company returns which has significantly interrupted the investment phase."

You can't find oil that you're not looking for. And the oil price crash-along with the credit crisis-wiped out the exploration budgets of major oil companies. Obviously, in a free market this would be self-correcting. Higher oil prices would attract more investment and new exploration. All things being equal, more people would look for oil. More people would find it. More people would produce it. And supply would again match demand.

But life is not a textbook. And finding oil and producing large deposits of oil cheaply is not an academic exercise. The 'Peak Oil' theory is often deliberately mischaracterised by its opponents as concluding that the world is "running out of oil." But that's not the case.

The world is running out of cheap, easy-to-find, inexpensive to produce, and easy to refine oil. There is plenty of oil. But is it "economic" oil? Well the answer to that is no! Whether it's political risk (where supply is artificially tight because of regimes unfriendly to U.S. or Western interests), or it's just several miles under the surface of the ocean, finding and pumping oil to meet the world's 85 million barrel per day demand is not an easy task.

The Big Money has a post on various conspiracy theories about the financial sector - The Biggest Wall Street Conspiracies.

Once there was a simpler time, when pretty much everything that happened in the financial world had a straightforward explanation.

Take the crash of Oct. 19, 1987. In one day, the stock market lost more than one-fifth of its value. Back then there was considerable speculation about what caused the market to decline as much and as fast as it did. Something that most people never heard of (before or since) called “program trading” was widely blamed, and curbs were put in place. But very soon the nation moved on, the market rebounded, and the issue faded. Discussion of the causes of the crash was confined to presidential commissions and academics.

Today, of course, the market crash of 1987 seems like a happy interlude in comparison with the recent nightmare. With greater fear—reminiscent almost of the Red Scare of the 1950s—we’re seeing a rash of conspiracy theories.

It’s not surprising, really. In his 1963 essay “The Paranoid Style in American Politicians,” Richard Hofstadter marveled at the extent to which paranoia had become accepted part of the political dialogue. So it seems natural that paranoia has crept into the dialogue about the financial system as well. ...

So here’s a field guide to the five most prevalent Wall Street conspiracy theories, with each one graded on scope, durability, crowd appeal, and plausibility and each graded on a sliding scale from 1 to 5, with 1 being “fugetaboutit” and 5 being “damn right.”

The Times has an article on Goldman Sachs (aka the Vampire Squid on the face of humanity) - I'm doing 'God's work'. Meet Mr Goldman Sachs.

Number 85 Broad Street, a dull, rust-coloured office block in lower Manhattan, doesn’t look like a place to stop and stare, and that’s just the way the people who work there like it. The men and women who arrive in the watery dawn sunshine, dressed in Wall Street black, clutching black briefcases and BlackBerrys, are very, very private. They walk quickly from their black Lincoln town cars to the lobby, past, well, nothing, really. There’s no name plate on the building, no sign on the front desk and the armed policeman stationed outside isn’t saying who works there. There’s a good reason for the secrecy. Number 85 Broad Street, New York, NY 10004, is where the money is. All of it.

It’s the site of the best cash-making machine that global capitalism has ever produced, and, some say, a political force more powerful than governments. The people who work behind the brass-trim glass doors make more money than some countries do. They are the rainmakers’ rainmakers, the biggest swinging dicks in the financial jungle. Their assets total $1 trillion, their annual revenues run into the tens of billions, and their profits are in the billions, which they distribute liberally among themselves. Average pay this recessionary year for the 30,000 staff is expected to be a record $700,000. Top earners will get tens of millions, several hundred thousand times more than a cleaner at the firm. When they have finished getting "filthy rich by 40", as the company saying goes, these alpha dogs don’t put their feet up. They parachute into some of the most senior political posts in the US and beyond, prompting accusations that they "rule the world". Number 85 Broad Street is the home of Goldman Sachs.

The world’s most successful investment bank likes to hide behind the tidal wave of money that it generates and sends crashing over Manhattan, the City of London and most of the world’s other financial capitals. But now the dark knights of banking are being forced, blinking, into the cold light of day. The public, politicians and the press blame bankers’ reckless trading for the credit crunch and, as the most successful bank still standing, Goldman is their prime target. Here, politicians and commentators compete to denounce Goldman in ever more robust terms — "robber barons", "economic vandals", "vulture capitalists". Vince Cable, the Lib Dem Treasury spokesman, contrasts the bank’s recent record results — profits of $3.2 billion in the last quarter alone — and its planned bumper bonus payments with what has happened to ordinary people’s jobs and incomes in 2009.

It’s even worse in the US. There, Rolling Stone magazine ran a story that described Goldman as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money". In his latest documentary, Capitalism: A Love Story, Michael Moore drives up to 85 Broad Street in an armoured Brinks money van, leaps out carrying a sack with a giant dollar sign on it, looks up at the building and yells: "We’re here to get the money back for the American people!"

Goldman’s reputation is suddenly as toxic as the credit default swaps and other inexplicably exotic financial instruments it used to buy with glee. That’s bad for the one thing it values more than anything else: business. Being the prime target for popular and political outrage could put Goldman first in line for draconian new regulation. So it has, reluctantly, decided that the time has come to speak out, to fight its corner. That’s how, on one of those bright autumnal New York mornings when anything seems possible — even an invitation to break bread with the masters of the universe — I find myself walking past the security guard who held up Michael Moore and into the building with no name.

I suspect the answer is might be richer (just) for Australians but poorer for our friends in the northern hemisphere (unless they work for Goldman Sachs, aka the Vampire Squid of course). The New York Times has a review of Richard Wolff's book "Capitalism Hits the Fan" which looks at Americans' changing economic fortunes (a trend which will continue as China and India continue to industrialise and resource limits become more apparent) - The State of Families, Class and Culture.

Over the last 40 years, we have witnessed a profound shift in the American family, one that bears the deep footprints of a disappearing economic sector and a transformed culture. The shift has hit blue-collar families especially hard. These days, the best gauge of social class is years in school. In 1970, a female high school dropout had a 17 percent chance of becoming a single mother (versus 2 percent for a woman with a bachelor’s degree). By 2007, her chances had jumped to a whopping 49 percent (versus 7 percent for the B.A. holder). Nearly all new mothers with graduate training, but only half of high school dropout mothers, are married.

Why is this happening? As the economist Richard Wolff tells the story in his book “Capitalism Hits the Fan,” for a century before 1970 most American companies paid wages that slowly rose decade by decade, so that a male worker could feel better off than his dad and trust that his son would be better off than he was. But by the 1970s, the deal was off; corporate profits continued to rise while workers’ real wages stagnated. Scrambling to make up for this fact, fathers worked longer hours. Mothers got jobs — and this in a society without paid child care or parental leave. Families went into debt. The blue-collar family became the shock absorber of the broken deal. On top of this, Americans of every class found themselves less and less secure about their jobs, pensions and health insurance. For as Jacob S. Hacker, the Yale political scientist and Democratic adviser, argues in “The Great Risk Shift,” over the last 30 years, companies and government have offloaded risk onto the shoulders of individuals.

Rolling Stone's Matt Taibbi has a long and very jaundiced look at the history of American market bubbles and the role he believes Goldman Sachs plays in them (with the oil price spike last year and the planned carbon trading market both getting a mention) - THE GREAT AMERICAN BUBBLE MACHINE.

The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled-dry American empire, reads like a Who's Who of Goldman Sachs graduates.

By now, most of us know the major players. As George Bush's last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton's former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup - which in turn got a $300 billion taxpayer bailout from Paulson. There's John Thain, the rear end in a top hat chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former Goldman banker, Thain enjoyed a multibillion-dollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain's sorry company. And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in golden parachute payments as his bank was self-destructing. There's Joshua Bolten, Bush's chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailed-out insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board. The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York - which, incidentally, is now in charge of overseeing Goldman - not to mention ...

But then, any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain - an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

The bank's unprecedented reach and power have enabled it to turn all of America into a giant pump-and-dump scam, manipulating whole economic sectors for years at a time, moving the dice game as this or that market collapses, and all the time gorging itself on the unseen costs that are breaking families everywhere - high gas prices, rising consumer-credit rates, half-eaten pension funds, mass layoffs, future taxes to pay off bailouts. All that money that you're losing, it's going somewhere, and in both a literal and a figurative sense, Goldman Sachs is where it's going: The bank is a huge, highly sophisticated engine for converting the useful, deployed wealth of society into the least useful, most wasteful and insoluble substance on Earth - pure profit for rich individuals.

They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They've been pulling this same stunt over and over since the 1920s - and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet.

If you want to understand how we got into this financial crisis, you have to first understand where all the money went - and in order to understand that, you need to understand what Goldman has already gotten away with. It is a history exactly five bubbles long - including last year's strange and seemingly inexplicable spike in the price of oil. There were a lot of losers in each of those bubbles, and in the bailout that followed. But Goldman wasn't one of them.

IF AMERICA IS NOW CIRCLING THE DRAIN, GOLDMAN SACHS HAS FOUND A WAY TO BE THAT DRAIN. ...

BUBBLE #4 - $4 A GALLON

By the beginning of 2008, the financial world was in turmoil. Wall Street had spent the past two and a half decades producing one scandal after another, which didn't leave much to sell that wasn't tainted. The terms junk bond, IPO, subprime mortgage and other once-hot financial fare were now firmly associated in the public's mind with scams; the terms credit swaps and CDOs were about to join them. The credit markets were in crisis, and the mantra that had sustained the fantasy economy throughout the Bush years - the notion that housing prices never go down - was now a fully exploded myth, leaving the Street clamoring for a new bullshit paradigm to sling.

Where to go? With the public reluctant to put money in anything that felt like a paper investment, the Street quietly moved the casino to the physical-commodities market - stuff you could touch: corn, coffee, cocoa, wheat and, above all, energy commodities, especially oil. In conjunction with a decline in the dollar, the credit crunch and the housing crash caused a "flight to commodities." Oil futures in particular skyrocketed, as the price of a single barrel went from around $60 in the middle of 2007 to a high of $147 in the summer of 2008.

That summer, as the presidential campaign heated up, the accepted explanation for why gasoline had hit $4.11 a gallon was that there was a problem with the world oil supply. In a classic example of how Republicans and Democrats respond to crises by engaging in fierce exchanges of moronic irrelevancies, John McCain insisted that ending the moratorium on offshore drilling would be "very helpful in the short term," while Barack Obama in typical liberal-arts yuppie style argued that federal investment in hybrid cars was the way out.

GOLDMAN TURNED A SLEEPY OIL MARKET INTO A GIANT BETTING PARLOR - SPIKING PRICES AT THE PUMP.

But it was all a lie. While the global supply of oil will eventually dry up, the short-term flow has actually been increasing. In the six months before prices spiked, according to the U.S. Energy Information Administration, the world oil supply rose from 85.24 million barrels a day to 85.72 million. Over the same period, world oil demand dropped from 86.82 million barrels a day to 86.07 million. Not only was the short-term supply of oil rising, the demand for it was falling - which, in classic economic terms, should have brought prices at the pump down.

So what caused the huge spike in oil prices? Take a wild guess. Obviously Goldman had help - there were other players in the physical-commodities market - but the root cause had almost everything to do with the behavior of a few powerful actors determined to turn the once-solid market into a speculative casino. Goldman did it by persuading pension funds and other large institutional investors to invest in oil futures - agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed.

As is so often the case, there had been a Depression-era law in place designed specifically to prevent this sort of thing. The commodities market was designed in large part to help farmers: A grower concerned about future price drops could enter into a contract to sell his corn at a certain price for delivery later on, which made him worry less about building up stores of his crop. When no one was buying corn, the farmer could sell to a middleman known as a "traditional speculator," who would store the grain and sell it later, when demand returned. That way, someone was always there to buy from the farmer, even when the market temporarily had no need for his crops.

In 1936, however, Congress recognized that there should never be more speculators in the market than real producers and consumers. If that happened, prices would be affected by something other than supply and demand, and price manipulations would ensue. A new law empowered the Commodity Futures Trading Commission - the very same body that would later try and fail to regulate credit swaps - to place limits on speculative trades in commodities. As a result of the CFTC's oversight, peace and harmony reigned in the commodities markets for more than 50 years.

All that changed in 1991 when, unbeknownst to almost everyone in the world, a Goldman-owned commodities-trading subsidiary called J. Aron wrote to the CFTC and made an unusual argument. Farmers with big stores of corn, Goldman argued, weren't the only ones who needed to hedge their risk against future price drops - Wall Street dealers who made big bets on oil prices also needed to hedge their risk, because, well, they stood to lose a lot too.

This was complete and utter crap - the 1936 law, remember, was specifically designed to maintain distinctions between people who were buying and selling real tangible stuff and people who were trading in paper alone. But the CFTC, amazingly, bought Goldman's argument. It issued the bank a free pass, called the "Bona Fide Hedging" exemption, allowing Goldman's subsidiary to call itself a physical hedger and escape virtually all limits placed on speculators. In the years that followed, the commission would quietly issue 14 similar exemptions to other companies.

Now Goldman and other banks were free to drive more investors into the commodities markets, enabling speculators to place increasingly big bets. That 1991 letter from Goldman more or less directly led to the oil bubble in 2008, when the number of speculators in the market - driven there by fear of the falling dollar and the housing crash - finally overwhelmed the real physical suppliers and consumers. By 2008, at least three quarters of the activity on the commodity exchanges was speculative, according to a congressional staffer who studied the numbers - and that's likely a conservative estimate. By the middle of last summer, despite rising supply and a drop in demand, we were paying $4 a gallon every time we pulled up to the pump.

What is even more amazing is that the letter to Goldman, along with most of the other trading exemptions, was handed out more or less in secret. "I was the head of the division of trading and markets, and Brooksley Born was the chair of the CFTC," says Greenberger, "and neither of us knew this letter was out there." In fact, the letters only came to light by accident. Last year, a staffer for the House Energy and Commerce Committee just happened to be at a briefing when officials from the CFTC made an offhand reference to the exemptions.

"1 had been invited to a briefing the commission was holding on energy," the staffer recounts. "And suddenly in the middle of it, they start saying, 'Yeah, we've been issuing these letters for years now.' I raised my hand and said, 'Really? You issued a letter? Can I see it?' And they were like, 'Duh, duh.' So we went back and forth, and finally they said, 'We have to clear it with Goldman Sachs.' I'm like, 'What do you mean, you have to clear it with Goldman Sachs?'"

The CFTC cited a rule that prohibited it from releasing any information about a company's current position in the market. But the staffer's request was about a letter that had been issued 17 years earlier. It no longer had anything to do with Goldman's current position. What's more, Section 7 of the 1936 commodities law gives Congress the right to any information it wants from the commission. Still, in a classic example of how complete Goldman's capture of government is, the CFTC waited until it got clearance from the bank before it turned the letter over.

Armed with the semi-secret government exemption, Goldman had become the chief designer of a giant commodities betting parlor. Its Goldman Sachs Commodities Index - which tracks the prices of 24 major commodities but is overwhelmingly weighted toward oil - became the place where pension funds and insurance companies and other institutional investors could make massive long-term bets on commodity prices. Which was all well and good, except for a couple of things. One was that index speculators are mostly "long only" bettors, who seldom if ever take short positions - meaning they only bet on prices to rise. While this kind of behavior is good for a stock market, it's terrible for commodities, because it continually forces prices upward. "If index speculators took short positions as well as long ones, you'd see them pushing prices both up and down," says Michael Masters, a hedge-fund manager who has helped expose the role of investment banks in the manipulation of oil prices. "But they only push prices in one direction: up."

Complicating matters even further was the fact that Goldman itself was cheerleading with all its might for an increase in oil prices. In the beginning of 2008, Arjun Murti, a Goldman analyst, hailed as an "oracle of oil" by The New York Times, predicted a "super spike" in oil prices, forecasting a rise to $200 a barrel. At the time Goldman was heavily invested in oil through its commodities-trading subsidiary, J. Aron; it also owned a stake in a major oil refinery in Kansas, where it warehoused the crude it bought and sold. Even though the supply of oil was keeping pace with demand, Murti continually warned of disruptions to the world oil supply, going so far as to broadcast the fact that he owned two hybrid cars. High prices, the bank insisted, were somehow the fault of the piggish American consumer; in 2005, Goldman analysts insisted that we wouldn't know when oil prices would fall until we knew "when American consumers will stop buying gas-guzzling sport utility vehicles and instead seek fuel-efficient alternatives."

But it wasn't the consumption of real oil that was driving up prices - it was the trade in paper oil. By the summer of2008, in fact, commodities speculators had bought and stockpiled enough oil futures to fill 1.1 billion barrels of crude, which meant that speculators owned more future oil on paper than there was real, physical oil stored in all of the country's commercial storage tanks and the Strategic Petroleum Reserve combined. It was a repeat of both the Internet craze and the housing bubble, when Wall Street jacked up present-day profits by selling suckers shares of a fictional fantasy future of endlessly rising prices.

In what was by now a painfully familiar pattern, the oil-commodities melon hit the pavement hard in the summer of 2008, causing a massive loss of wealth; crude prices plunged from $147 to $33. Once again the big losers were ordinary people. The pensioners whose funds invested in this crap got massacred: CalPERS, the California Public Employees' Retirement System, had $1.1 billion in commodities when the crash came. And the damage didn't just come from oil. Soaring food prices driven by the commodities bubble led to catastrophes across the planet, forcing an estimated 100 million people into hunger and sparking food riots throughout the Third World.

Now oil prices are rising again: They shot up 20 percent in the month of May and have nearly doubled so far this year. Once again, the problem is not supply or demand. "The highest supply of oil in the last 20 years is now," says Rep. Bart Stupak, a Democrat from Michigan who serves on the House energy committee. "Demand is at a 10-year low. And yet prices are up."

Asked why politicians continue to harp on things like drilling or hybrid cars, when supply and demand have nothing to do with the high prices, Stupak shakes his head. "I think they just don't understand the problem very well," he says. "You can't explain it in 30 seconds, so politicians ignore it."

Taibbi also has a blog post looking at changes to NYSE program trading disclosure rules that also seem to benefit Goldmans - NYSE Halts Transparency, Feels Goldman Program Trading Disclosure Is Unnecessary.

"In a move set to infuriate and send many Zero Hedge readers over the top, the NYSE has taken action to make sure that nobody will henceforth be able to keep track of the complete dominance that Goldman Sachs exerts over the New York Stock Exchange. This basically ends our weekly Program Trading updates disclosed every Thursday indicating that Goldman has singlehandedly captured all of NYSE's program trading."
-- Zero Hedge

I'm sorry I didn't post this earlier, but I urge readers to go over to Zero Hedge and check out this post about the NYSE's recent decision to change its procedures... to protect Goldman Sachs from bloggers like Zero Hedge!

This is complicated stuff (for people with no financial background, like me, it's nightmarish) and I have a longer thing about this coming out later. But the essence of this story is that Tyler Durden over at Zero Hedge has, for months, been complaining that Goldman has been manipulating the NYSE, in particular manipulating program trading in somewhat the same way (although perhaps not to the same extent) that they manipulated the commodities markets. In order to make his case -- and his theory has gained a lot of acceptance, to the point where Goldman had to respond to the allegations publicly -- he has been analyzing data the NYSE releases on program trading every week.

So what happened this week? The NYSE announced that it will no longer be releasing its weekly program trading data. This is quiet obviously a move designed to make it even more impossible to track what's going on in the NYSE and shield, in particular, Goldman Sachs. Let's hope there's a public uproar about this; Zero Hedge posted contact info for NYSE officials, and has urged readers to petition the exchange to restore the old rules in the name of transparency.

The Green Wombat reports that the land rush for good solar thermal power sites has shifted from California to Nevada, where there are fewer constraints - Credit crisis shakes up solar land rush.

The land rush to stake prime sites in the Mojave Desert for solar power plants has moved east from California to a state that knows a thing or two about desert dreaming and scheming — Nevada.

When Green Wombat’s story on the solar land rush was published in the July 21 issue of Fortune (see “The Southwest desert’s real estate boom”), solar energy developers, financiers and speculators had filed lease claims on 226,000 acres of federal land in Nevada. Today, 702,000 acres are in play, largely thanks to Goldman Sachs’ aggressive moves to lock up land. The New York investment giant has put claims on about 300,000 acres of Bureau of Land Management dirt in the Silver State – in one week alone, it filed claims on some 187,000 acres.

Given its financial firepower, Goldman’s designs on the desert have been a matter of intense interest. (The firm also has filed claims on 125,000 acres in California.) Goldman (GS) declined to discuss its solar strategy, but a review of BLM documents and interviews with green energy executives sheds some light on its power plans as the financial crisis triggers a shakeout in the solar land rush.

Over the past two years, scores of companies — from Silicon Valley startups to Chevron (CVX) to utility FPL (FPL) — have scrambled to put lease claims on the nation’s best solar real estate to build massive megawatt solar power plants. In California, where utilities face a state mandate to obtain 20% of their electricity from renewable sources by 2010 with a 33% target by 2020, claims have been filed on nearly 1 million acres. If all those solar stations were built, they would generate a staggering 60,000 megawatts of electricity, or nearly twice the power that California currently consumes.

With most of the prime solar hot spots taken in California, the action is moving to sun-drenched states like Nevada where there’s plenty of wide-open desert land. The BLM has yet to issue any leases and is currently evaluating the applications on a first come, served basis. A key consideration: whether the applicant can deploy a viable solar technology.

But with the credit crunch threatening to derail many of those projects, companies are jockeying to score the best sites - those near transmission lines and water - when the weak are weeded out by a failure to obtain financing or a proven solar technology. Some sites have two or three companies queued up in case the first company in line falters.

For its part, Goldman Sachs has brought in its Cogentrix Energy subsidiary to develop its solar projects, according to BLM records. Cogentrix is a Charlotte, N.C.-based owner and operator of coal and natural gas-fired power plants that Goldman acquired for $2.4 billion in 2003.

“Cogentrix doesn’t have a solar technology,” says Rob Morgan, executive vice president and chief development officer for Silicon Valley solar startup Ausra. He says Ausra, which is building a solar power plant for utility PG&E and itself has staked claims in Arizona and Nevada, has held discussions with Goldman about its solar technology.

Strange court decisions blocking construction of new transmission capacity (in what must be the world's most protected strip of desert) aren't helping - Big Solar project short-circuited.

The risky nature of Big Solar projects has been driven home with California regulators’ move to kill a controversial $1.3 billion transmission line that would have connected massive solar power stations in the desert to coastal cities.

“These projects are unlikely to proceed,” wrote Jean Vieth, an administrative law judge with the California Public Utilities Commission, in a ruling rejecting San Diego Gas & Electric’s Sunrise Powerlink transmission line.

Phoenix-based Stirling Energy Systems in 2005 scored a contract to provide SDG&E (SRE) with up to 900 megawatts of electricity to be generated by as many as 36,000 solar dishes. A few months later, the utility filed an application to build the Sunrise Powerlink, a new transmission line to connect the Stirling power plants and other renewable energy projects to the coast.

But the utility’s proposal to build 150-foot-high transmission towers right through wilderness areas of Anza-Borrego State Park, home to a host of protected species, triggered a long-running fight with green groups that generated an 11,000-page environmental impact report. On Halloween, Vieth issued a ruling that found that despite state mandates to cut greenhouse gas emissions, the environmental impact of the transmission project was frightening.

“The potentially high economic costs to ratepayers and the potential implications for our [greenhouse gas] policy objectives do not justify the severe environmental damage that any of the transmission proposals would cause,” concluded Vieth in a 265-page decision.

The battle isn’t over — the public utilities commission will vote in December whether to accept the judge’s ruling. They will also consider an alternative decision issued by a commissioner assigned to review the case. That decision would let SDG&E build a transmission line along a different route under certain conditions.

But the case highlights the conflicting environmental values that will dog solar power projects. In other words, just what trade-offs are we willing to make to secure a planet-friendly source of energy? In this case, the judge ruled that to avoid the environmental damage of a massive new transmission line, the preferred alternative is to build more fossil-fuel plants close to San Diego along with a smaller-scale solar power station and a huge increase in rooftop solar arrays. The judge acknowledged that such an alternative “would cause substantially more GHG emissions than the proposed project and other transmission proposals.”

The judge’s second preferred alternative was to build only renewable-energy projects near San Diego that would not require big new transmission lines. Some Sunrise Powerlink opponents argue that San Diego has enough roof space to generative massive amounts of electricity from photovoltaic solar panels. (The cost of such an undertaking was left unsaid.)

Moving down under, the SMH reports that BP are shutting their solar PV plant, citing problems with expanding the existing site, along with low economies of scale and long distances from silicon suppliers - BP shuts Sydney solar plant.

In a major blow for the state's solar industry, BP will close its Sydney solar panel factory at the end of March, leading to a loss of 200 jobs. The British energy group will shift its manufacturing operations offshore to lower costs.

"The challenge for solar power is to reduce its costs to the level at which it competes on an equal footing with conventional electricity delivered through the power grid. To do this we need to expand at scale and reduce costs,'' the global chief executive of BP Solar, Reyad Fezzani, said this morning in a statement.

"We've looked at all options in our Sydney manufacturing site and the physical location, lack of expansion potential and lease agreements just don't make it competitive,'' Mr Fezzani said, adding that the most modern solar photovoltaic manufacturing plants are up to 20 times larger than the Sydney site.

BP invests about $2.3 billion a year in alternative energy and has solar-cell plants in countries including Germany, the United States, Spain, France and India.

The closure of the plant, at Sydney Olympic Park, comes ahead of a supposed boom in renewable power - including solar, wing, biomass and other ways of generating electricity without greenhouse gas emissions - predicted by the Federal Government. According to modelling done by the Federal Treasury, the renewable energy industry is expected to expand 30 times over by the year 2050.

Despite appeals from the solar industry, the Federal Government is yet to introduce legislation to bring in a "feed-in tariff'', in which people who generate their own solar power get paid above market rates per kilowatt hour. It voted down legislation introduced into Federal Parliament by the Greens last week.

While the Federal Government may be content to slow the progress of the clean energy industry, the NSW govt is showing some spirit for a change and has introduced a feed-in tariff here - Get paid for solar power on your roof.

HOUSEHOLDERS who put solar panels on their roofs and generate power that feeds back into the electricity grid will be paid a fee, but how much will not be decided until January.

The move to introduce the "feed-in tariff" will be announced today by the NSW Minister for Environment and Climate Change, Carmel Tebbutt, at a solar power conference in Sydney.

It marks an end to the State Government's opposition to solar subsidies. The Energy Minister, Ian Macdonald, is backing it despite strong objections from one of the state's main energy retailers, Energy Australia. NSW is the last state to introduce the solar subsidy or feed-in tariff.

"We know the community want to act on climate change and this is one way the NSW Government can support people who want cleaner, greener energy," Ms Tebbutt told the Herald. "A feed-in tariff makes solar panels more affordable because people are paid for the clean electricity they produce."

But the minister and a state taskforce on the tariff, which will report in January, will face intense lobbying from the solar industry, which does not want NSW to follow the example of Victoria, South Australia and Queensland. Those states have announced only a minimal solar feed-in tariff that leaves most solar households with little or no fee after they pay their own electricity bills.

"We're pleased that NSW is looking at a feed-in tariff," said Muriel Watt, who chairs the main solar panel industry group. But Dr Watt said NSW should introduce a "gross" feed-in tariff where power companies pay households for all the electricity they generate, including their own, at a premium rate. The household would then be billed at the normal rate for their own power use. This would be an incentive to people who invest in solar panels to feed into the electricity grid.

Dr Watt said states such as Victoria paying "net" feed-in tariffs provided little incentive for households to install solar panels.

Goldman's oil "superspike" team seems to have given up the ghost (after a presumably very profitable 4 year period), with the firm closing oil trading recommendations. From FT Alphaville - It’s official, Goldman capitulates on oil.

Goldman’s latest commodities note is out, and this is all you need to know:

Closing our oil trading recommendations.

Although we have emphasized in the past few weeks that continued weak oil demand exacerbated by constrained credit conditions will contribute to soften near-term fundamentals keeping WTI prices, timespreads and gasoline cracks under pressure, we have left our oil trading recommendations open, expecting that high volatility would provide a better exit point to our trades. The volatility in the past few weeks has mostly been to the downside and the pressure on the oil complex has increased. In the near term, we do not expect significant upside potential and as a consequence we are closing all of our oil trading recommendations.

Bloomberg has an article on the rush to build solar thermal power plants in California, with Google being joined by Chevron and Goldman Sachs in investing in Brightsource - Google, Chevron Build Mirrors in Desert to Beat Coal With Solar.

Along a dusty two-lane highway in California's Mojave Desert, 550,000 mirrors point skyward to make steam for electricity. Google Inc., Chevron Corp. and Goldman Sachs Group Inc. are betting this energy will become cheaper than coal.

The 1,000-acre plant uses concentrated sunlight to generate power for as many as 112,500 homes in Southern California. Rising natural gas prices and emissions limits may make solar thermal the fastest-growing energy source in the next decade, say backers including Vinod Khosla, the founder of computer maker Sun Microsystems Inc.

Costs for the technology will fall below coal as soon as 2020, the U.S. government estimates. JPMorgan Chase & Co. and Wells Fargo & Co. invested last year in the biggest solar plant built in a generation; Chevron and Google are funding research; and Goldman Sachs is seeking land to lease as demand outpaces wind turbines and geothermal. ...

Costs for solar thermal may fall as low as 3.5 cents a kilowatt hour by 2020, according to a report commissioned by the U.S. Energy Department. Meanwhile, coal expenses may rise. Congress is considering limits on carbon dioxide and other greenhouse gas emissions. The purchase of pollution permits may be required under a measure the Senate will begin debating next month.

`To Beat Coal'

Ausra's plants will produce electricity at 10 cents a kilowatt-hour starting in 2010, and the price will fall to 8 cents a few years later as it adopts systems with fewer parts that will be less costly when widely deployed, the company says. ``We are going to beat coal,'' says Bob Fishman, Ausra's chief executive officer. His company has a contract with PG&E Corp.'s Pacific Gas & Electric for a site in central California.

Chevron, Goldman Sachs, FPL, PG&E and other companies have filed more than 50 applications with the Bureau of Land Management to lease government-owned desert property for solar power systems. Chevron, which has invested in the solar thermal builder BrightSource Energy Inc. in Oakland, California, and Goldman, the biggest U.S. securities firm, declined to comment.

Google's philanthropic division put $10 million into eSolar, a start-up in Pasadena, California. Dan Reicher, a former Energy Department official who manages the unit's climate and energy initiatives, said there will be more such investments.

The Bloomberg article points to this report from the NREL last year to congress on the Potential impact of CSP for electricity generation (pdf), quoting a likely cost of CSP power of 5 cents per kilowatt by 2020.

Between 2000 and 2003, four reports were released on the potential for CSP. An assessment of the main issues raised by these reports leads to the following conclusions:

1. Further technology development and deployment could reduce the cost of CSP: The S&L study quantified the significant cost reductions that are possible with continued technology development and deployment. It concluded that there were three elements that could reduce the cost of CSP from approximately 12 cents/kWh today to about 5 cents/kWh by 2020: technology development (42 percent), building larger plants (37 percent), and volume production (21 percent). All four studies mentioned in this report are in agreement that the costs of CSP would fall with greater levels of deployment.

2. CSP requires policy incentives for initial deployment: All the reports emphasized that in the near-term, deployment of CSP depends on the establishment of policy incentives that offset the current higher cost of solar energy. The CSP industry provided a list of incentives it stated were necessary to initiate deployment. These were included in DOE’s 2002 report. Six southwestern States have now established renewable portfolio standards, and the Federal Government has created an investment tax credit that encourages the deployment of CSP. These policies have resulted in the establishment of CSP projects in California, Arizona, and Nevada that could result in 2,000 MW by 2010.

Development of CSP could provide energy, economic, environmental, and security benefits. The following factors could make CSP an attractive option for the Southwestern States if policymakers determine that these benefits outweigh the costs.

1. Energy: CSP could provide hundreds of gigawatts of clean power.

2. Economic: Analyses for California, Nevada, and New Mexico estimate that there could be significant benefits in job creation and additions to gross state product accruing from building and operating CSP plants. It is expensive to build a CSP plant and it requires a relatively large number of people to operate and maintain it. Counter balancing this, however, is the absence of a fuel cost. Much of the money that would otherwise be spent on monthly fuel costs, instead is spent on salaries. States and the Federal government have indicated their concern over the rising and volatile price of fossil fuels and their impact on the economy.

3. Environmental: CSP plants do not emit criteria pollutants or greenhouse gases, an issue of growing concern throughout the Federal and State governments. Thus, CSP could be an element of potential future policies related to climate change.

Bruce Sterling has a few comments on the Bloomberg report - as usual his interjections are marked ((())).

Along a dusty two-lane highway in California's Mojave Desert, 550,000 mirrors point skyward to make steam for electricity. Google Inc., (((dot-greens))) Chevron Corp. (((reforming petrocrats))) and Goldman Sachs Group Inc. (((East Coast finance establishment))) are betting this energy will become cheaper than coal.

(((Once people realize that coal plants are drowning major cities, coal plants are gonna get really, really expensive. Like, probably dangerous even to stand around. There must be any number of rich and evil people who own seaside mansions and could hire a global-guerrilla gang to blow up coal plants with truck bombs. You could probably leverage that activity in the markets and make a whole lot of money. Very "Shadow OPEC," except that the general population would cheer you on.)))

The 1,000-acre plant uses concentrated sunlight to generate power for as many as 112,500 homes in Southern California. Rising natural gas prices and emissions limits may make solar thermal the fastest-growing energy source in the next decade, say backers including Vinod Khosla, the founder of computer maker Sun Microsystems Inc. (((Rupert Murdoch's Wall Street Journal is afraid of Vinod Khosla. Proof the guy is onto something useful.)))

Costs for the technology will fall below coal as soon as 2020, the U.S. government estimates. JPMorgan Chase & Co. and Wells Fargo & Co. invested last year in the biggest solar plant built in a generation; Chevron and Google are funding research; and Goldman Sachs is seeking land to lease as demand outpaces wind turbines and geothermal.

``Solar thermal can provide a substantial amount of our power, more than 50 percent,'' says Khosla, who along with the Menlo Park, California, venture capital firm Kleiner Perkins Caufield & Byers led a $40 million investment in solar power producer Ausra Inc. ``This is an industrial-strength solution.''