Skyhigh Oil: We have been screwed

[Mule]

Skyhigh Oil: We have been screwed
Posted Sep 11 2008, 12:01 PM by Andrew Horowitz

Now mind you, this comes from some pretty smart people who have been certain that in the short span of only a few months the world's supply was being outstripped due to the massive industrialized growth within China and India. Then, just as fast, that all changed because (as the tale goes) the price escalation actually dampened global consumption. Come on fellas, do we really look that stupid?

http://blogs.moneycentral.msn.com/topstocks/archive/2008/09/11/oil-prices-we-have-been-screwed-by-manipulation.aspx

[sammyg2]

I started a thread last april about speculators manipulating the oil market
http://forums.pelicanparts.com/showthread.php?t=404224&highlight=oil+speculators

Most posters agreed, except a few.
I remember one that until very recently was still insisting that the price of oil (at the time around $140 IIRC) was justified by the fundamantals. Guess not

Then there was this thread from May, http://forums.pelicanparts.com/showthread.php?t=410422&highlight=oil+speculators
where someone basically said speculators had nothnig to do with it.

It's good to see more and more "industry experts" fess up and admit the speculators were to blame.

[Mule]

Commodities traders are similar to pimps.

[sammyg2]

Originally Posted by Mule

Commodities traders are similar to pimps.

Yeah, sort of, but for a little while I was doing the same thing as they were until it starting stinking and I got out.
I despised the speculators not for the malipulation, but for lying about it and saying they weren't to blame for the drastic price jumps. I like capitalism but hate dishonesty. I didn't like their lies and I still don't like the flaws in the system that allowed and encouraged the manipulation.

See the way i see the problem is that the system is set up in a way that gives them an open door to this kind of thing. Unrestricted buying and selling options without ever having to take any physical delivery or posession is a recipe for manipulation. level the playing field, make the investors own at least a portion of what they buy, and they won't be likely to try and corner a market in the future.

[Mule]

Sammy, apparently you couldn't be a pimp. You have a conscience.

[kach22i]

'Enron loophole' enables oil speculation
http://www.washingtontimes.com/news/2008/jun/24/enron-loophole-keeps-oil-speculation-unleashed/

The commodity commission imposes minimal standards on speculators in New York and allows as much as 30 percent of oil trading to escape U.S. regulation altogether by exempting trades routed through overseas electronic exchanges. The commission has given control over those transactions to regulators in London and Dubai who have been granted jurisdiction over the leading U.S. oil contract for West Texas Intermediate crude.

The foreign exchanges gained control over oil trading through the Enron loophole, which granted an exemption from regulation to electronic energy trading, which was a small part of the market in 2000. But since that time, electronic trading has burgeoned to the point that even the New York exchange last year sought to join those escaping regulation by teaming up with the Dubai Mercantile Exchange.

"I'm sure that American consumers will take little comfort that they are being protected from manipulation and excessive speculation driving up gas prices - not by U.S. regulators but by the Dubai government," said Michael Greenberger, a University of Maryland law professor and former head of the commodity commission's division of trading.

Yes, back in 2000 Bill Clinton signed it..............



Closing Enron Loophole Would Drop Oil Prices 25% - 50% Overnight
http://www.pensitoreview.com/2008/06/22/closing-enron-loophole-would-drop-oil-prices/

The Enron Loophole is the nickname for a provision written into the Commodity Futures Modernization Act (CFMA) of 2000 that was drafted by lobbyists for Enron and inserted in the bill by then Sen. Phil Gramm (R-Texas) that deregulated an aspect of the market Enron sought to exploit with its “Enron On-Line” trading program, the first Internet-based commodities transaction system. Phil Gramm is now a key economic adviser for the John McCain campaign.

[NICKG]

and there is the reason to not be with McCain...where is rove in there?

[Mule]

Kach provides the real down low from the washington times & the penis review.

[911pcars]

Originally Posted by Mule

Commodities traders are similar to pimps.

Part of your free-market philosophy. Would you advocate ...... laissez-faire, regulation or just kill them?

Sherwood

[Mule]

Make 'em take delivery. Or maybe you can explain the benefits to the market of wagering on futures?

[sammyg2]

Originally Posted by Mule

Sammy, apparently you couldn't be a pimp. You have a conscience.

Yeah I could be a pimp, just not a very good one

[911pcars]

Originally Posted by Mule

Make 'em take delivery. Or maybe you can explain the benefits to the market of wagering on futures?

Like other commodities like pig lips or whatever, speculating investors win or lose when they bet on future value. Maybe others more conversant with pig lips can enlighten me as to other nuances in this market.

Sherwood