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Re: Report Faults Wall Street for High Energy Prices

By: Down And Out Man in POPE | Recommend this post (0)
Tue, 13 Mar 12 5:09 PM | 41 view(s)
Boardmark this board | (The) Pope's for real stock market report 		Msg. 53384 of 65535
(This msg. is a reply to 53352 by clo)
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clo, of course Wall Street is responsible for out of control oil and gasoline prices. It's a no brainer for anybody that has bothered to understand what's happening.

Obama says there is no silver bullet. Well, yes there is. Severely restrained position limits and higher margin requirements would bring prices way down in hurry.

Of course Wall Street is railing against that. It would take hundreds of millions out of their coffers.

I cringe every time CNBC reports from the NYMEX oil pit. Excited traders, breathlessly driving the price up. A SMALL fraction of them actually involved in the purchase/sale of "real" oil for real suppliers or users. Mostly it's just "investing" for huge institutions and hedge funds.

So, if several times the market of "real" oil trades everyday, and Wall Street is pocketing hundreds of millions without ever taking delivery of a drop, why would anyone think this doesn't drive the prices out of "normal"?

Good grief.

I wrote a long dissertation on this four years ago, sent it to all my Senators and Reps, along with other Senators and Congressmen that were on pertinent committees. The typical form letter I got back was something like this:

"Thank you for your concern on high oil prices. Please be assured that Mr. XXXXX is in support of drilling in ANWR and opening more offshore drilling areas."

My letter was about reigning in the Street before it brought down the economy with four dollar gasoline, and that's what I got for a response.

And still, nothing has changed.

And what REALLY irks me is the lame argument the Street makes, that they need to be allowed to take huge positions to help provide a liquid market. HAH, the oil market is HUGE just with real oil. Hasn't anybody noticed?

What a pathetic joke.

And it's one of the things that REALLY pisses me off about the GOP. But, of course, the Dems are equally bought and paid for by the Street.

Nothing changes, and this economic recovery we're finally getting is in extreme danger of being shot down by oil again.

If you want to "invest" in oil, buy a tank, fill it with oil.

Stop the massive paper trading!!!!!! Before it destroys us again.

D&O


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The above is a reply to the following message:
Report Faults Wall Street for High Energy Prices
By: clo in POPE
Tue, 13 Mar 12 12:23 AM 		Msg. 53352 of 65535

snapits, thought you'd appreciate this article.

Report Faults Wall Street for High Energy Prices

By BEN PROTESS
October 14, 2011, 4:15 pm Legal/Regulatory

J. Pat Carter/Associated PressA new study ties the value of oil to commodity index funds.

A new report by Better Markets, a nonprofit group advocating constraints on speculative trading, blames Wall Street for inflating prices at the gas pump and the grocery store.

The study centered on commodity index funds, investments tied to the value of oil, wheat and other commodity futures contracts. The funds, according to the Better Markets review of more than 25 years in data, have historically caused an uptick in futures market prices as they periodically exit expiring contracts and roll into a new batch of deals.

“The data shows the trading those funds do every month has severely disrupted and dramatically changed those markets, causing food and fuel prices to increase, hedging costs for businesses to rise, and prices to swing erratically up and down, which also raises everyone’s costs,” Dennis Kelleher, president and C.E.O. of Better Markets, said in a statement. 

The report was timed to an upcoming meeting where regulators plan to unveil new limits on speculative commodities trading. The Commodity Futures Trading Commission’s so-called position limits rule, which stems from the Dodd-Frank financial regulatory overhaul, would cap the amount of futures contracts that a single trader or firm can hold on certain commodities. The limits would apply to trading on 28 commodities like oil, wheat and gold, while existing position limits apply to only nine items.

The commodity commission plans to vote on the rules on Tuesday.

Wall Street has railed against the proposal, with some groups even threatening legal challenges. The agency received a barrage of comment letters, 13,000 in all, from both industry lobbyists and consumer groups.

Industry groups say speculators are needed to keep liquidity flowing. They also argue that regulators lack data tying speculative trading to price distortions. 

But Better Markets says it has the data to back it. The group’s report, it said in a statement, indicates that speculative trading has triggered market distortions, which in turn pushed “prices needlessly higher.” 

http://dealbook.nytimes.com/2011/10/14/report-faults-wall-street-for-high-energy-prices/

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