OIL: It's a bubble, and we can thank Enron for it. NPR's 'Marketplace' 6/16/08

[Richardo]

Listen to this story, and tell your Congresspeople that re-regulation of the commodity futures trading markets should be TOP priority.

http://marketplace.publicradio.org/display/web/2008/06/16/cftc/

TEXT OF INTERVIEW
Kai Ryssdal:

The CFTC (Commodity Futures Trading Commission) <is> in charge of regulating oil markets in this country and Congress has been after the agency to do something -- to do anything -- about oil and gas prices, what lawmakers perceive to be speculation, in particular.

Michael Greenberger used to run the Trading division of the CFTC.

<snip>

Ryssdal: Why is it so hard to figure out what's going on in commodities markets -- oil specifically?

Greenberger: Well, the reason it's hard to figure out is about 30 percent of our crude oil energy futures are traded in what is called a dark market -- that is a market that was deregulated in December of 2000 at the behest of Enron. Prior to that legislation being passed, all energy futures traded in the United States or affecting the United States in a significant fashion were regulated by United States regulators under a very careful regime that had been perfected over about 78 years and many observers believe that because those markets are not being policed, malpractices are being committed and traders are able to boost the price virtually at their will.

<snip>

Ryssdal: How long is it going to take then if we are... in a bubble, for it <re-regulation> to work its way through and us to get back to something more realistic for the price of a barrel of oil, whether its 50 bucks or 80 bucks?

Greenberger: From my own experience as a commodity regulator, I believe that if the Bush Administration were serious about its regulation, we could begin seeing prices drop within a month. If we don't get the kind of regulation that has been done for decades and the market proceeds along the pace its proceeding, we will have to go through a very, very serious recession. The question is do you want to deflate the bubble by that kind of suffering or do you want to deflate the bubble by applying tight U.S. regulatory controls?

Read the whole thing, memorize it, and let's get some sensible regulation back. Call your Congresspeople and let them know that this is to be a top priority.

In the Bacchanalian orgy of deregulation that started in the Reagan years, no one ever seemed to stop and think: "Why are the regulations here in the first place?" Well, at least as far as oil trading goes, we get that answer every time we fill the tank.

[Trajan]

1. Is that Phil Gramm I smell ?

Ew ....... what a sour odor that is ....

[Richardo]

5. Not a doubt in the world, is there?

x(

[Trajan]

8. Enron's Man in the Senate ...

Along with Bush in the WH, Senator Gramm carried 'Kenny Boys' water for years ... and we will pay for DECADES for that evil triumvirate ....

[Trajan]

7. Delete

wrong thread

[sam sarrha]

14. yep.. got that right, here is the story>>LINK>>

allowed the mortage bubble, the oil bubble, and is causing the food bubble

http://www.star-telegram.com/ed_wallace/story/651928.html

http://www.star-telegram.com/ed_wallace/story/659081.html

http://www.onlinejournal.com/artman/publish/article_3252.shtml

randi rhodes was all over this before it came out..

[truedelphi]

2. Let's get our congress critters on it - I don't have much hope

That Buush would care.

[Teaser]

3. Except I don't believe it

not entirely. Sure there is an element of a bubble, but the greatest fraction of oils price is based on increasing demand and plateauing supply.

[Richardo]

9. I think the irrationality points to more speculation than supply and demand

We'll never know without re-regulating though. It only makes sense. Looka t what the Enron electricity traders did to California in the late 90's. Their successors are doing it to all of us now with oil.

[sandnsea]

11. No. It isn't. It's the speculators and the dollar.

And the speculators are pushing the price up due to global unrest, which led to this pointless bubble. At this particular point in time, there is plenty of oil.

[sam sarrha]

15. the media is perpetuating the propaganda, they are owned by the ReThuglican mafia>>LINK>>

allowed the mortage bubble, the oil bubble, and is causing the food bubble

http://www.star-telegram.com/ed_wallace/story/651928.html

http://www.star-telegram.com/ed_wallace/story/659081.html

http://www.onlinejournal.com/artman/publish/article_3252.shtml

[spag68]

20. You've been here since 2001 and you believe that??????

[hedgehog]

4. I heard a vague reference to this on NBC NIghtly News - in a story

on ALL commodity prices one of the interviewees said something like "this would never have happened when the market was regulated.." Of course, there was no follow-up to explain what had changed and when.

[earthside]

10. Nope.

There is speculation to be sure ... however, most of the cost is due to a plateau in production versus increasing demand.

A couple of links:

http://us.ft.com/ftgateway/superpage.ft?news_id=fto061220081357084547">Refinery Oil Premiums Cast Doubt on Speculators - Financial Times

http://europe.theoildrum.com/node/4112">Why Oil Costs Over $130 Per Barrel: The Decline of North Sea Oil - TheOilDrum.com

After the tech bubble and the housing bubble, it is tempting to think that the the rise in oil prices is another bubble -- but this time it is something much more serious -- Peak Oil.

Sorry folks, there isn't going to be an easy fix to expensive gasoline -- So, conserve, conserve, conserve!

[hedgehog]

16. I'd tend to agree with you regarding oil. The gist of the story was to suggest that grain

prices are being subjected to manipulation by speculators.

[Carnea]

6. Oil is finding a new price because the supply is starting to dwindle.

Is there some froth in the futures price/ Sure there is. Has Mexico basically ran out of Oil and is on the brink of total collapse... Yup can't put that fence up fast enough... Are the Saudi''s and Iranians stuck with some sour crap no-one can refine... so it's said...

There is speculation hey it drives prices both ways ask any farmer. But the reality of a more crowded planet that wants a middle class life is undeniable... should be some interesting times ahead.

[izquierdista]

12. They could be getting ready

To pop this bubble right after the Republican convention so they can take credit for it. Campaign on the fact that they were the ones who brought gas prices down. If you go back and look at 2004, there was a summer high and prices eased during the fall campaign.

[On the Road]

17. Yes, I Think That's a Very Likely Scenario

It's not going to stay this way without a substantial retreat. The administration has levers it is not using yet.

[sam sarrha]

13. here are some good links..>>

allowed the mortgage bubble, the oil bubble, and is causing the food bubble, allowed food to be traded as a commodity


http://www.star-telegram.com/ed_wallace/story/651928.html


http://www.star-telegram.com/ed_wallace/story/659081.html

http://www.onlinejournal.com/artman/publish/article_3252.shtml

[Seen the light]

18. This was done by Phil Gramm, McCain's top economic advisor

If there was only some way more people could find out about this.

[ben_meyers]

19. Have to clean Congress out first

You can't trust either political party

In June 2000, Senator Gramm co-sponsored the Commodity Futures Modernization Act, a measure aimed at deregulating certain kinds of futures trading, but not energy futures. That bill never made it to the floor, and thus quietly died. Six months later, on December 15, Gramm curiously turned up as co-sponsor of a bill with the same name, the Commodity Futures Modernization Act, which did deregulate energy futures and which, without undergoing the usual committee hearings and preliminary votes, was immediately attached as a rider to an 11,000-page appropriations bill. It passed and was signed into law by President Bill Clinton six days later. Few lawmakers had likely perused the rider carefully, if they even knew it was there. And at any rate, Enron had given to the campaigns of over 200 legislators.

http://www.villagevoice.com/news/0203,ridgeway,31534,6.html

[Richardo]

26. Thanks for that.

I was wondering about the circumstances of its passage - I figured it had to be a rider.

Gramm has resurfaced as McCain's economic adviser - this is a great opportunity to tie gas prices directly to McCain's campaign. :patriot:

[snot]

21. k&r'd

[populistdriven]

22. Clinton is the elephant in the room at DU

[readmoreoften]

23. Yes but free-market free-market free-market? SQUAAAWK? Free market?

Free-market wanna cracker? SQUAWK-SQUAWK? Market. Market. Free.


Free is a good word so a free market must be good because we are free to like freedom.

[Richardo]

24. Tiresome, isn't it?

"Free to like freedom" :rofl:

[readmoreoften]

25. Whatta you want? An Unfree market? A slave market? How could you support slavery, you monster?

Halliburton, United, Will Never Be Defeated! Get it through yer thick skull, ya lefty tyrant! We will overcome the working class (and middle class and moderately wealthy class and kinda sorta really wealthy class) someday.......