Rockefeller Foundation Quitting Crude Oil: Not Economically Viable?

Some might see it as a cheap publicity ploy taking advantage in the wake of the upcoming UN Climate Change Summit but do we all benefit from the Rockefeller Foundation quitting crude oil?

By: Ringo Bones 

As someone who experienced the hardships that resulted from both Operation Desert Shield and Operation Desert Storm first hand, it seems that the Rockefeller Foundation suddenly deciding to quit their hedge fund funding from crude oil and other non-renewable fossil fuels almost cold turkey 23 years after Operation Desert Storm seems like a cheap publicity ploy taking advantage of the upcoming UN Climate Change Summit this September 23, 2014 and in the wake of the very recent Climate Change action demonstrations in New York City back in Sunday, September 21, 2014 that also took place almost simultaneously in other 160 countries like the UK, Afghanistan to Australia over world governments’ lack of action on tackling the root cause of climate change – i.e. excessive fossil fuel usage. If the Rockefeller Foundation – a charitable foundation largely funded by the big crude oil boom of the 20^th Century – quits crude oil and other non-renewable fossil fuels and switch to greener renewable energy sources, will it benefit the rest of us, the lowly 99-percent?

Given that the United States is now the world’s leading producer of crude oil – and it has been since the middle of January 2013 – America’s Big Oil heir, the Rockefeller Foundation - suddenly quitting crude oil almost cold turkey could send anyone beholden to Capitol Hill’s “Crude Oil Lobby” in a suicidal panic. Fortunately, it hasn’t, but to those in the know and who have no control whatsoever on how their pension funds are invested are now doubtful of the future of their pension funds now that the Rockefeller Foundation has quit crude oil, coal and other fossil fuel based hedge fund funding almost cold turkey. Will the Rockefeller Foundation quitting crude oil cold turkey prove to be not economically viable in the long run?

Can the Euro Be Saved?

Since its introduction back in January 1999 to its near destruction by the Greek debt crisis, is the European common currency of the euro still worth saving?


By: Ringo Bones


From its origins dating back to the late 1960s to its eventual introduction in January 1999 with the help of the US Federal Reserve and the German Bundesbank. The common European currency – called the euro – supposed raison d’être was to provide Eurozone economies with a currency equipped with built-in price stability and hopefully apolitical-flavored neutrality. The euro nearly died back in December 1999 when its value tumbled below that of the US dollar. But the common European currency did wonders to Europe’s capital markets as its value dropped by triggering a mergers-and acquisition boom that allowed the European corporate bond market – then worth 2.3-trillion US dollars – to grow almost threefold.

Despite of its “miraculous” first twelve months of life, euro-skeptics were not so shy in voicing their opinions. Like the now-defunct British pop band called the Spice Girls -whose members can’t even tell a mathematical equation describing a typical credit derivative from one describing the ballistic coefficient of a 155-mm projectile. And who can forget former British P.M. Tony Blair who said during the 1998 EU summit that the UK would not be using the euro before 2002.

Even though I harbor the perception that the German propensity to over-engineer their creations, it seems to have done wonders to the euro’s apparent resilience despite of the current debt crisis affecting Greece that is also threatening other Eurozone economies like Portugal, Spain, Italy and Ireland. And maybe it is no wonder why Germany has exerted the most in trying to save the euro because, historically, it seems like it is their pride-child.

Wim Duisenberg was serving as the first European Central Bank president when the euro was launched back in 1999, and the then Finance Minister of Germany – Oskar Lafontaine – used the euro as a platform to reduce Europe’s unemployment rate at that time. Not to mention Hans Tietmeyer’s announcement back then on the Bundesbank deciding to join an Eurozone wide interest rate cut with a tragic result to many mortgage holders at the start of 1999. Nonetheless, then German Chancellor Gerhard Schröder together with then French President Jacques Chirac’s well-panned rhetoric of using the euro as a platform for economic growth.

Over-engineered supercurrency or not, it seems like the only solution for economic stability in Europe – and the rest of the world for that matter – is probably something like a Bretton Woods version 2.0 overhaul of the global financial system. The euro might survive even if an economic crisis rivaling that of the 2008 global credit crunch occurs with regularity every five years, but I doubt if typical Europeans and other working-class people around the world can survive such economic onslaught.

As of late, EU finance ministers have been meeting to put forth proposals that would save the euro after it plunged to an 18-month low of just below US$ 1.25 back in May 14, 2010. There has been a consensus in favor of more regulation of hedge fund trading on European soil in order to curb risky behavior by fund managers and its current fight against currency speculators that could irreversibly harm the euro. But as usual, UK opposed such a deal primarily because it handles 80% of Europe’s hedge fund market. A stricter regulation on hedge funds could put pension funds at a disadvantage because they are inherently tied down to hedge funds. It seems that in saving the euro, working-class folks are put into a disadvantage yet again – just like back in 1999. Isn’t quantitative easing such a fierce and fickle mistress?

Pyramid Scheme Killed the Hedge Fund Star?

Dubbed by Wall Street insiders as a scandal bigger than ENRON, will the Bernard L. Madoff hedge fund scandal forever undermine investor confidence?


By: Vanessa Uy


When the 70 year old former NASDAQ chairman Bernard L. Madoff was arrested a few days ago as the result of an on-going investigation over might be one of the largest fraud case of the 21st Century. He is suspected of being responsible for creating a pyramid / Ponzi scheme disguised as a hedge fund firm that dates back to the 1960 which resulted in the defrauding of his investors by 50 billion US dollars.

Bernard L. Madoff started a hedge fund firm called Bernard L. Madoff Securities LLC was even regarded by many Wall Street insiders as “the birthplace of modern Wall Street” due to it’s pioneering business model. Bernard L. Madoff’s business model was deemed to tempting – even to seasoned investors due to his promise of relatively high return of investment when compared to the norm despite of the risks involved or the obvious lack of transparency. During its heyday, Madoff’s hedge fund firm was trading on average of 50 million shares a day. And even during October 2008, when the global financial crisis was already in full steam, his firm was still the 23rd largest market maker on NASDAQ.

What became of Bernard L. Madoff’s undoing is by running his hedge fund firm like a pyramid or Ponzi scheme, where money is being exchanged despite of the lack of trade in goods or services being provided – the primary reason that made it illegal. First tier investors were comfortably living off from the investment funds of latter entrants of their shaky pyramid scheme, which miraculously, only recently collapsed despite dating from the 1960’s. Bernard L. Madoff’s fraudulent dealings even predated mortgage backed securities and other complex credit derivatives which are primarily blamed for the ongoing global financial crisis.

Will Bernard L. Madoff’s stunt forever undermine investor confidence? Well, given that the start of 2008 saw the audacious rogue trading antics of Société Générale junior trader Jérôme Kerviel, lack of investor confidence will be the norm – rather than the aberrant exception – which will probably worsen our ongoing global financial crisis. Those new “green technologies” being peddled by newly elected US President Barack Obama will never get of the ground due to lack of investment. The pyramid scheme did indeed killed one of NASDAQ’s leading hedge fund “stars” by sending its greedy CEO to the slammer.

Hedge Funds: Financial Cloak and Dagger?

First made famous as a financial instrument that made spectacular hostile takeovers possible during the 1980’s “Decade of Greed”. Now used by speculators to drive up oil and food prices, will stricter regulation tame hedge funds’ unbridled avarice?


By: Vanessa Uy


Okay I’ll admit it – and so do maybe a large number of people – that the financial world’s bereft of any semblance of corporate social responsibility is what probably makes it interesting to outsiders. If ever corporate social responsibility or ethical business governance existed during the “Decade of Greed”, the movie “Wall Street” surely would have never been made. Part of the financial world’s “cash cow” that tore the financial world into two camps when it comes to the widespread adoption of corporate social responsibility are hedge funds. But before we proceed further, let us discuss first the arcane and rigmarole – infested world of hedge funds.

A hedge fund is a private investment fund that charges a performance fee and usually offered only to a limited range of qualified accredited investors. Unlike true blue Initial Public Offerings or IPO s, in which anyone with money or other requisite funds can qualify to invest. Alfred Winslow Jones was credited for inventing hedge funds back in 1949. While there is no legal definition of hedge funds under the US securities laws and regulations, the term hedge fund usually pertain to funds invested in more complex and risky investments ignored by most – if not all - public funds. As a hedge fund’s investment activities are limited only by contracts governing the particular fund, it can make greater use of complex investment strategies such as short selling, entering into the futures markets, swaps and other derivative contracts and leverage.

As the nomenclature implies, hedge funds usually avoid potential losses in the principal markets they are invested to by hedging it by any number of available methods. But a number of long-term investments had been inappropriately named as hedge funds, especially absolute-return funds. Even though these so-called “pseudo hedge funds” do not actually hedge their investments.

Hedge funds had always acquired a reputation of secrecy, a financial cloak and dagger if you will. This could cause serious headaches in its attempt to comply the transparency proviso of corporate social responsibility and / or ethical business governance. Unlike open-to-the-public “retail” funds - like US mutual funds - which are marketed freely to the public, in most countries, hedge funds are specifically prohibited from being marketed to investors who have no professional accreditation or to individuals with sufficient private funds. Sadly, this limits the information a hedge fund is legally required to release because divulging a hedge fund’s methods could unreasonably compromise their business interests. Thus limiting the pertinent information that a hedge fund is allowed legally to release.

Since a typical hedge fund’s assets can run into many billions of dollars and is always be multiplied by leverage, their sway over markets, whether they succeed or fail, is potentially substantial. There is even a continuing debate over whether hedge funds should be more thoroughly regulated. Given their current sway in the commodities markets, especially to crude oil and staple foods like rice, corn and soybeans, a more thorough regulation is indeed a long time coming. The bad news is that a more thorough regulation could be viewed by the majority in the financial world as a move from an already over regulated Keynesian style economics into a Soviet-era “Socialist Command Economy”. A move that would prove to be an anathema to an overwhelming majority in the financial world who had clung on to their Protestant / Calvinist Work Ethic like their lives depended on it.