Dirty Manipulation

Here are things that the commodities traders' lobby always stops: margin increases and any sort of regulation against manipulation. They always claim that the markets are too "deep" and they always have stats that back it up. We saw this in the commoditization of stock sectors that are now dominated and manipulated by power ultra futures.

The "deepness" of any sector is, of course, an illusion if you actually trade, but if you don't trade you are tempted to attribute anything to the rise and fall of a sector except manipulation, because manipulation means common-sense margin regulation, which cuts down on fees and therefore ruins the business. No one ever allows a cut in fees -- too much money at stake, too many politicians that can be easily bought, too many agency regulators that can easily be captured.

Manipulation's just part of the game -- a sanctioned part.

But even I, a seasoned realist who is willing to show that manipulation -- legal manipulation, as all manipulation is with these non-rules we have -- was taken aback by the ease with which a single trader could move up oil on a $10 million investment.

What a farce. This guy caused the world to wonder whether gasoline was going over $3 for the July 4 weekend. This guy determined the fortunes of the airline industry. This guy caused people to believe that the consumer-led recovery would "derail" because of higher oil prices. He revealed how fraudulent this commodities market is. (Caveats to all of the usual commodity trading apologists: Of course you are right and my eyes are lying to me again).

It is a great mystery to me why the big oil companies don't sell oil through futures for later delivery when they see these spikes. But maybe they are just as confused or maybe they aren't producing enough to take advantage of the spikes. Whatever. I can only imagine how stupid they feel that they have to be held to this silly little market and how much better off we would be without it. (Usual caveats: Of course we need to be able to trade anything to be able to hedge it, another canard that means more commissions and more fees).

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Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

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