Posted on 06/22/2008 6:50:54 PM PDT by tobyhill
Sen. Barack Obama rolled out a proposal yesterday to curb speculation in energy markets, which his advisers said would help stabilize soaring gasoline prices.
The presumptive Democratic presidential nominee laid out a four-step program that would, among other things, close an "Enron loophole" that protects some trading in energy futures from federal oversight, his advisers said.
"I think everyone believes there's too much speculation in the oil markets, and a lot of it flows directly from that particular loophole," New Jersey Gov. Jon S. Corzine (D) said on a conference call hosted by the Obama campaign.
The other three components of the plan, as described by Obama economic adviser Jason Furman, are to ensure that U.S. energy futures cannot be traded in offshore, unregulated markets; to work toward international regulation of oil futures markets, in cooperation with like-minded countries; and to have both the Federal Trade Commission and the Justice Department investigate the oil markets.
(Excerpt) Read more at washingtonpost.com ...
What about the increasing the margin requirements for speculators?
The reason for the increase in the price of Crude is primarily the devaluation of the dollar and increased demand. The short squeeze is merely icing on the cake.
The bottom line is that there is no oil shortage and as soon as all the shorts get squeezed out of the market, the price will go down, at least a little.
Longer term though, a lower price bodes ill for increased supply. The very best possible solution would be for the Feds to quit devaluing the dollar, but that isn’t likely because they are afraid of a financial collapse.
I believe they did increase the margins.
Honestly, has this air head ever had an original idea?
Of course, the other Lefties in D. C. were posing in front of the msm cameras last week fulminating about oil leases...”use them or lose them” was the phrase they all parroted.
If they knew anything about government oil leases, they would have known that this is already the law...unless they just wanted to deflect the heat they are feeling from disgusted drivers who realize the Democrats are to blame for $4/gal gas.
1) ensure that U.S. energy futures cannot be traded in offshore, unregulated markets;
Guaranteeing nothing, since the price of futures -- which is supposedly the problem -- will be determined on a world market that includes regulated and unregulated trades.
2) to work toward international regulation of oil futures markets, in cooperation with like-minded countries;
Again, guaranteeing nothing, because either it will not happen, or, if it reflects market conditions these will not be changed by regulating it, or, if it does not reflect the market because the regulation effectively regulates prices, it will simply regulate supply.
4) Have both the Federal Trade Commission and the Justice Department investigate the oil markets.
By all means, if that will make people feel better, which is all this is about.
You’re right, there is no oil shortage, it’s right under our feet. If we strengthened our own position by using our own resources then the Dollar will also strengthen. Right now we’re owned by China and India even though their economies are a tenth of ours. How did we get to this point?
How much?
Looking into the future, it’s cloudy, but, yes, I see President Obama Osama naming as his Lord of the Nationalized Petroleum Industry none other than William Jefferson, Democrat, Louisiana.
I’m not sure but from what I was just reading the NYMEX had already increased their margins voluntarily back in March.
“The so-called “Enron Loophole” was dealt with in the Farm Bill that President Bush vetoed but that got overrode by congress so it already is law.”
Did Barry vote “present”?
Not to worry. I’m from the Government and I’m here to help you!..../sarc
I’m not sure if that one was one of his “Presents”.
The answer is not nice at all : (
The problem is that the Saudi’s cost of producing oil is very cheap. We simply can’t compete. The second problem is that the price of commodities always tend to fall over the long run.
There will be no boost in our domestic supply until the Saudi’s supply of cheap oil is drastically reduced. Or our government funds nuke, shale and coal gasification programs, not likely in my opinion.
How does Obama manage to control the futures market if the futures market goes overseas in response to new US regulation?
It does not look like it rose much. Stock margins are 50 %.
Can't he just sue OPEC - or is that an old idea?
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