Pitfalls and Pipelines - Philippine Indigenous Peoples Links

62 Pitfalls and Pipelines: Indigenous Peoples and Extractive Industries
move could cause an immediate spike in the cash price for copper, with
manufacturers and fabricators having to pass these increases on to their
customers. 48
Of late these Funds have also included supposed “clean energy” and
“clean water” portfolios, although some are distinctly dubious. For
example, the Power Resources Water Portfolio includes the giant GE
(General Electric) group that invests in nuclear power and defence
contracts. Unlike mutual funds, trading at prices fixed at the end-of-day,
ETFs can be bought and sold instantaneously on major stock exchanges
throughout the working day. ETFs may also be sold “short” to profit from
falling share values. Unlike individual stocks, U.S.-based ETFs are exempt
from the “uptick rule”—one introduced by the SEC to prevent selling of
shares at a lower price than that at which they were previously sold.
Box 2: Getting Something from Nothing
“Derivative” is a term simply denoting “something that derives its value
from something else.” It is the ugliest beast in a murky universe inhabited
by creatures (“products”) such as CDOs (collaterized debt obligations),
CSOs (credit default swaps), CFDs (contracts for difference) and trading
in “futures.” In March 2010, iron ore became the latest natural resource
commodity to join oil, coal and aluminium in this surreal world, as “[b]
ankers and brokers gear[ed] up to exploit the new iron ore pricing system
by developing a multi-billion dollar derivatives market” 49
Since 2008, and in the most graphic and egregious manner
conceivable, we have seen what this means in practice, in terms of the
massive accumulations of concealed, unpaid, unpayable—and even
unidentifiable—tranches of debt. Once the value of a material good, such
as a ton of iron, a barge of coal, or a brick of gold, is determined—not by
current demand and supply, but by a contract for putative delivery at some
point in future, we are all at the mercy of speculators.
In theory, there should always be physical stocks of commodities,
maintained in a warehouse or on the high seas, to back derivative
transactions. But, moving these stocks around, and “dealing” them among
a coterie of traders, has come to resemble a highly secretive game of
poker—with an added frisson of the players sometimes not even knowing
which cards they hold in their own hands. No wonder the game has been
widely characterized as “Casino Capitalism.” At the time of writing, the