a new market darling, page-38

http://leavittbrothers.com/pdfs/goldman-sachs.pdf

Scroll down to "Bubble 6"

As envisioned by Goldman, the fight to
stop global warming will become a
"carbon market" worth $1 trillion a year
instead of credit derivatives or oil
futures or mortgage-backed CDOs, the
new game in town, the next bubble, is
in carbon credits - a booming trilliondollar
market that barely even exists yet,
but will if the Democratic Party that it
gave $4,452,585 to in the last election
manages to push into existence a groundbreaking
new commodities bubble, disguised
as an "environmental plan," called
cap-and-trade.
The new carbon-credit market is a virtual
repeat ofthe commodities-market casino
that's been kind to Goldman, except it
has one delicious new wrinkle: Ifthe plan
goes forward as expected, the rise in prices
will be government-mandated.

Here's how it works: If the bill passes,
there will be limits for coal plants, utilities,
natural-gas distributors and numerous
other industries on the amount
of carbon emissions (a.k.a. greenhouse
gases) they can produce per year. If the
companies go over their allotment, they
will be able to buy "allocations" or credits
from other companies that ha,ve :WilDaged
to produce fewer em:issions:~Pre§identObama conservatively
estimates about $646 billion worth of carbon credits
will be auctioned in thc first seven years
one of his top economic aides speculu,tes
that the real number might be twice Qr
even three times that amount.
The feature of this plan that has ,special
appeal to speculators is that the "cap"
on carbon will be continually lowered by
the government, which means that cllrbon
credits will become more and more scarce
with each passing year. Which means thllt
this is a brand-new commodities market
where the main commodity to be tracleq.
is guaranteed to rise in price over tim.e.
The volume of this new market will be
upwards ofa trillion dollars annu!tlly;for
comparison's sake, the annual combined
revenues of all' electricity suppliers in the
U.S. total $320 billion.