Dem Sen. Casey calls on CFTC to act against oil speculators

The Hill ^ | 3/04/12 | Vicki Needham

[Cringing Negativism Network]

Dems are for anything and everything, except the one thing which would actually help:

An immediate and across the board push to drill every place available.

We’re going to need all the oil we can get, when the middle east eventually goes down the tubes.

It’s going to happen. One way or another, the Strait of Hormuz will at some point be unavailable.

Now is the time to act. Now is the time to drill more.

Not after the next crisis happens.

[jiggyboy]

I wouldn’t go that far. The markets and the exchange work except for when the well-documented kind of rampant speculation in 2008 wreck them.

[jersey117]

Where are the candidates on this attack on the oil industry which provides 9.5 million U.S. jobs? The candidates should ask Casey why his overlord is killing the coal industry in his state. Come on guys. Lets get those sound bytes out there. Don’t let them get away with taking over the oil industry. Fight. Fight. Fight!!!!

[jiggyboy]

I just remembered two more textbook inversions of the "speculators provide liquidity and price stability" canard: the first one is the infamous Goldman-Sachs readjustment of their own tradeable commodities index in 2006, where they woke up one morning and decided that Unleaded Gasoline should not be 8.7% of the portfolio, but 2.5%. Here's how that "provided" liquidity and price stability, and by "provided", I mean "utterly and instantly destroyed":

"...Goldman Sachs significantly readjusted in August of that year [2006] the GSCI's gasoline weighting. Index products tracking the GSCI, and representing an estimated $60 billion in institutional investor funds, were forced to rebalance their portfolios resulting in an unwinding of positions. Originally, unleaded gasoline made up 8.75 percent of the GSCI as of 6/30/2006, but this was changed to just 2.3 percent, representing a sell-off of more than $6 billion in futures contracts.

"As a result, gasoline fell 82 cent in the wholesale market over a four-week period, an unprecedented move; and crude oil, which in July 2006 traded over $79 per barrel for August delivery—at the time an all-time record—subsequently fell to around $56 by January 2007."

http://www.marketoracle.co.uk/Article4526.html

I leave the matter of the clear culpability of speculators for the worldwide food riots of 2008 for another post.

[jiggyboy]

This is not an attack on the oil industry.