Oil prices are due to rampant, unregulated speculation - Alternet

[Phoebe Loosinhouse]

http://www.alternet.org/workplace/87474/

Government regulators of commodity markets used to recognize this reality. They placed rules on commodity markets that limited speculative trading. Those rules for energy, by the end of 2000, had almost all been deregulated away.

Since then, commodity trading volume has jumped six-fold. This speculative shot in the arm, Consumer Federation of America research director Mark Cooper believes, is adding at least $40 a barrel to the price of oil, about a third of the recent going price.

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skip Last week, in the Financial Times, widely respected London School of Economics analyst Meghnad Desai noted that nothing happening in the real-world market for oil — like growing demand from China — can explain the current oil market.

Oil prices, Desai adds, are now climbing at a rate that “would mean an unprecedented doubling in price every eight months.” Letting this situation continue will likely force the global economy “into a serious crisis.”

Nice concise article - much of the best information is in the comments.

Now when the bubble bursts, as it will inevitably, some hedge fund that caused the problem, and that made gazillions when they got in and out correctly, that is going to get burned by holding futures when they plummet downward, is going to jump up and down and scream that they are "too big to fail" and we, the taxpayers who got shafted in the first place by paying artificially inflated prices, will be asked to bail them out so that we will be shafted again and the funds will suffer no fiscal punishment.

Heads they win, tails we lose.

[Vanje]

1. Kicked! nt

[Canuckistanian]

2. What is the role of the oil companies?

Do they participate in the speculation?

Or do they just lie back and rake in the profits?

[MorningGlow]

3. Randi was pushing the same point on her show yesterday

It's not about supply and demand, it's not about drilling in ANWR or not--it's all about the speculation, she said. She made a good point in comparing our present oil situation with deregulation of the energy market: "Did we still have rolling blackouts in California after Ken Lay got arrested? No."

[INdemo]

4. Wish they would stop using the year 2000,,,

(that would one of those "Its all Clinton's" fault")It just happen be in 2003 early 2004 after Cheney and the oil industry drafted the energy bill,behind closed doors, that was passed quickly without first offering this legislation to committee for any input...

[Phoebe Loosinhouse]

8. Except that the Commodities Futures Modernization Act WAS passed in 2000

I honestly believe that there are things that happened in Clinton's term that do not stand up to scrutiny now. This is more of the alignment of the pro-business DLC wing of the Dems getting into line with the Repubs and passing stuff like this and NAFTA.

A rising tide did float all boats for a while before it swamped the little boats.

I also think this is why we cannot get our Congresssional reps to support the cause of the people anymore. They all make a lot of money, directly, indirectly from corporations and lobbyists.

We are totally screwed. I really think it may be beyond repair because the corruption is so pervasive. They get out of Congress and beome lobbyists themselves just to perpetuate the gravy train.

I would be willing to pay every single rep in the Congress a salary of million dollars a year with the proviso that they cannot earn ANY other dollars while they are representatives. All personal holdings have to go into a blind trust as well as the holdings of their spouse. If someone doesn't feel that works for them - fine. Let's get a whole new load of representatives from the middle classes who feel that would be a grand salary to make while being the stewards of the public purse.

[indepat]

5. A good case could be made that almost everything this administration has done/has not done is fbo

big oil, the energy meetings, failure to punish energy price manipulation in California, the Iraqi war, add your own. :D

[Phoebe Loosinhouse]

6. Unregulated markets are inherently prone to manipulation

All the right wing BS about the invisible hand, etc. is just that, BS - especially when you are talking about NECCESSITIES like fuel and food.

So, do all the industries and economies of the world (large and small) go down the tubes just so a small percentage of the population, already richer than Croesus, can become even richer?

[spanone]

7. bu$hco has destroyed any sense of oversight of corporate america, screwing us in the process

[Phoebe Loosinhouse]

9. late evening kick for more discussion. nt