Friday, June 26, 2009

Carbon Traders Set to Benefit

Goldman Sachs and Morgan Stanley have carbon trading desks and stand to benefit mightily from pending U.S. climate control legislation. These same firms have opaque energy futures desks, which transform oil & gasoline from energy products into hedging instruments.

Energy futures offer a window into carbon trading. Despite a 15 month drop in U.S. miles driven, gas prices soared to over $4 a gallon, imploded to $1.40 before rebounding to $2.50. Demand consistently dropped, while prices whip sawed in roller coaster like fashion. What Goldman Sachs and Morgan Stanley did for energy, they stand to do for carbon. Make yacht-loads of money.