MedicalConspiracies- Chemtrails and Weather Derivatives

In his paper 'Why in the World Are They Spraying?', journalist
Michael Murphy floats the idea that chemtrails are sprayed in order to
manipulate the weather derivatives market. He may not be too far off
the mark as my humble investigation leads me to many questionable
situations, strange bedfellows and none other than those legends of
corruption and waste, Enron. The thoroughly disgraced and vilified
corporation was one of the founders of the market. Would you put it
past Enron?

Overview:
Weather derivatives are financial instruments (options, futures
and options on futures) anyone can buy that either pay off or don't
pay off according to recorded atmospheric conditions such as
temperature and rainfall. These instruments are mostly traded on the
Chicago Mercantile Exchange (CME). They are also traded on smaller
Over the Counter (OTC) markets. Atmospheric conditions are recorded
and published by authorized organizations.

Although they are available for frost, snowfall, rain, wind speed
and many others, the most common type of weather derivative by far is
based on temperature. According to industry experts, temperature
based weather derivatives account for 75-99% of all weather
derivatives sold.

This is how temperature based weather derivatives work. Indices
take a location's daily average temperature, then a number is
determined by how much that day's average temperature deviates from 65
degrees Fahrenheit (or 18 degrees Celsius outside the U.S.). The
number deduced determines the derivative's value and is usually
aggregated over a period of weeks, months or seasons. Other indices
simply aggregate average daily temperatures. In short, the day's
average temperature determines the derivative's value. You can bet
that temperatures will be above or below the long term daily average
for a particular date or group of dates.

The first weather derivative transactions were conducted over the
counter in 1997 between Willis Group Holdings, Koch Industries, Pxre
Reinsurance Company and Enron. These transactions followed the
deregulation of the energy market in the U.S..

The weather derivatives market was greatly expanded in 1999 when
weather derivatives began trading on the Chicago Mercantile
Exchange.

The Weather Risk Management Association (WRMA) was founded in 1999
as well and is the leading industry association. The founding members
were: Aquila Power Company, Castlebridge Partners, Enron Capital and
Trade Associates, Koch Industries, Southern Company Energy Marketing,
and Swiss RE New Markets.

This year (2011), the WRMA released the results of a survey which
pegs the current global weather derivatives market value at about $12
billion.

USA today says in it's article 'Weather Derivatives Becoming Hot
Commodities' that the largest broker of weather derivatives in the
world is TFS Energy. A man named Kendall Johnson, who is described as
one of the industry's most powerful professionals, states, "Businesses
in the U.S., Japan, London and Amsterdam are the most frequent users
of weather risk management, though companies in emerging markets like
India are beginning to trade weather derivatives."

Other big corporate players include: British Gas, Hess Energy, ABN
Amro, Merrill Lynch, AXA Re, Swiss Re, Koch Energy, RenRe Energy,
Nephila Capital, Munich Re, Speedwell Weather Derivatives, Vyapar
Capital Market Partners, Galileo Weather Risk Management, PCE
Investors / Cumulus, EDF Trading Limited, Risk Solutions
International, E.ON Energy Trading, Mitsui Sumitomo Insurance Company
and Endurance Reinsurance Corporation of America.

As you can see, re-insurers are some of the biggest market
players. Geoffrey Considine, Ph.D. (a high profile weather
derivatives industry insider) writes in his paper 'Introduction to
Weather Derivatives', "There are a number of drivers behind the growth
of the weather derivative market. Primary among these is the
convergence of capital markets with insurance markets."

Swiss Re is a name that comes up repeatedly and just happens to be
the insurer of the World Trade towers at the time of the 9/11
attacks. But, I'm sure that's just a coincidence. Nothing to see
here... move along.

Enron:
By all accounts, Enron concieved and initiated the weather
derivatives market.

According to 'Weather Derivatives' by authors from the London
School of Economics, the Swiss Finance Institute and the University of
Geneva, "...electronic trading platforms have always played an
important role in the development of the market, especially Enron's
platform in the early days."

Enron initiated the weather derivatives market in Europe as well.
According to 'Weather, Finance and Meteorology - forecasting and
derivatives' by Samuel Randalls, "In the UK, the first weather
derivative deal was sold by Enron to Scottish Hydropower who, at that
time, 1998, were taking part in a government pilot scheme for the
privatization and deregulation of energy markets."

About Enron's weather derivatives divison known as 'Enron
Weather', one of the co-authors of the book 'Enron: The Smartest Guys
in the Room', Bethany McLean wrote me that, "A guy named John Sherriff
was pretty instrumental in starting it, but the woman who ran the
business, whose name was Lynda Clemmons, ended up leaving for a
reinsurer - can't remember the name of it - long before Enron's
bankruptcy." Lynda Clemmons now works as an advisor at Vyapar Capital
Market Partners; a big weather derivatives player. John Sherriff is
now the owner of Lake Tahoe Financial.

Market Participants:
The energy sector is the biggest buyer of weather derivatives
because energy companies' bottom lines and cash flows are largely
affected by temperature fluctuations. This is why temperature based
weather derivatives are the most prevalent. Energy companies produce
more power and thus increase cash flows when the weather gets either
hot or cold because people use more air conditioning when it is hot
and more heat when it is cold.

The weather derivatives market was created with the energy sector
in mind. As we have seen, the market was founded by big energy
players, most notably Enron. According to a Chicago Mercantile
Exchange brochure, the 65 degree baseline selected for determining
daily index values was chosen by the energy industry. The terms used
to describe index values are Heating Degree Days (HDD) and Cooling
Degree Days (CDD). Heating Degree Days refer to the number of degrees
Fahrenheit above 65 the average temperature of a Winter's day is.
Cooling Degree Days refer to the number of degrees Fahrenheit below 65
degrees a Summer's day is. It is this way because 65 degrees is about
the temperature where if it is warmer than that, people use more air
conditioning and if it is cooler than that, people tend to use more
heating.

Industry publications claim substantial non-financial or non-
energy sector participation in the weather derivatives market. Of
businesses outside the finance or energy sectors, my investigation
revealed very little participation. It is unrealistic that,
especially in the tough economy we've been having lately, an organizer
of an outdoor event, let's say, would first of all even be aware of
weather derivatives, much less use the time, energy, expertise and
money to buy such things. Businesses outside of finance and energy
usually use more traditional forms of insurance or hedge with
commodities contracts. Weather derivatives are almost entirely an
energy and finance sector market. There is hardly any retail investor
activity here.

Industry publications also often claim that weather derivatives
are used by energy companies only as hedges against unforeseen demand
lapses. If a particular Winter is too warm, for example, an energy
company would not make as much money selling fuel as they would in an
abnormally cold Winter. But, the reasoning goes, if they have
purchased a hedge in the form of weather derivatives, they can make up
those losses. I assert that weather derivatives are traded like any
other Wall Street market. To make a buck, they are traded any way
possible. Enron, the founder of the market is famous for their
trading desk which specialized in arbitrage.

The Bloomberg article 'Hedge Funds Pluck Money From Air in $19
Billion Weather Gamble' had it right. Nowhere in this article will
you see any mention of non-financial or energy sector participation.
In fact, industry professionals are quoted as saying they are,
"...using weather as market intelligence." And that their business
is, "...like playing poker."

Because both weather derivatives and energy futures rise and fall
depending upon temperature, the two markets are related. It is
reasonable to assume that weather derivatives are traded in
conjunction with energy futures.

Conclusions:
Are weather derivatives the reason chemtrails are sprayed? I
don't know. It's very plausible. I believe I have provided here a
great circumstantial case. The errant, singular chemtrail doesn't
support the 'weather derivative market as a cause' thesis because a
lone chemtrail would not have a significant impact on temperature or
any other atmospheric condition. It might be done as a psychological
operation. But, when downtown Phoenix is gridded with chemtrails on
an otherwise clear day, producing a haze which is totally foreign to
that climate, temperature (which drives weather derivative and energy
markets) is probably effected significantly. Does anybody out there
know of a study showing how much influence stratospheric aerosols have
on temperature? After a Google search, I couldn't find one.
Although, I did see some stuff that seemed to suggest that aerosols
can move temperature 2 degrees F or more.

Weather derivatives by themselves are big money gambles. They may
be valuable enough to make it worth putting planes up in the sky
spraying stuff. If you divide last year's total market value ($12
billion) by the number of traded contracts (466,000), you get the
average contract value which is $25,321. A matter of a few degrees on
a given day or group of days could mean hundreds of thousands of
dollars. The current weather derivatives market may not be big enough
to support all chemtrail activity, but if you factor in the related
multi-trillion dollar energy futures markets and energy company
revenues, I don't have much doubt that there is enough to support
it.

The fact that chemtrails are sprayed over mostly urban areas makes
sense if one of the desired effects is manipulated power usage. More
people and therefore more power consumers affected per square mile
means a more efficient operation.

The weather derivatives market and probably other opportunities
were made possible by deregulation of the energy market. Enron
founded the weather derivatives market. Was the Department of Energy
in bed with Enron? I wouldn't doubt it.

The fact that Enron founded the market is very dubious. This is a
company whose accounting firm, Arthur Andersen, shredded more than a
ton of their documents in one day as Enron's chairman Ken Lay told
everybody everything was fine. When Enron CEO Lou Pai's wife found
out about his stripper girlfriend complete with his love child, she
divorced him. Enron's bankruptcy resulted in at least 33 criminal
charges against employees and executives. People suffered under high
power costs inflated by Enron. When Enron and their cronies
intentionally disrupted power service as they were known to do, people
were injured and died. Who knows how many bodies they left? These
guys were not playing patty cakes. These guys ARE the Nazi party.
Have you ever heard of something called 'Operation Paperclip'? If you
like being ripped-off, beaten and murdered, you'll love these guys.
Personally, I'm not into that. I wouldn't put anything past
Enron.

Notes:
-'Weather Products; Managing global weather exposures. Growing
opportunities. Reducing Risks' Chicago Mercantile Exchange brochure
2009
-'Hedge Funds Pluck Money From Air in $19 Billion Weather Gamble' by
Peter Robison, Bloomberg Aug 1, 2007
-'Weather Derivatives Instruments and Pricing Issues' by Financial
Engineering Associates 2000
-'Weather Derivatives' by Pauline Barrieu & Olivier Scaillet, London
School of Economics, Swiss Finance Institute and University of Geneva
2008
-'Want a Weather Forecast? Ask Wall Street' by Alice Gomstyn, Rich
Blake and Dalia Fahmy ABC News 2010
-'Weather derivatives becoming hot commodities' USA today 2008
-'Firing Up the Market for Weather Contracts' by Antoine Gara,
Bloomberg Businessweek 2011
-'OTC weather risk market grows 30% to $2.4bn' by Charlotte Dudley,
EnvironmentalFinance.com 2011
-'Introduction to Weather Derivatives' by Geoffrey Considine, Ph.D.
-'Weather, Finance and Meteorology- forecasting and derivatives' by
Samuel Randalls School of Geography, Earth and Environmental Sciences,
University of Birmingham

WEBSITES:
wrma.org
cmegroup.com/trading/weather

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