Posted on 04/17/2012 5:32:47 AM PDT by Oldeconomybuyer
WASHINGTON – Under pressure to take action on rising gasoline prices, President Obama wants Congress to strengthen federal supervision of oil markets, increase penalties for market manipulation and empower regulators to increase the amount of money energy traders are required to put behind their transactions.
The White House plan, which Obama was to unveil Tuesday, is more likely to draw sharp election-year distinctions with Republicans than have an immediate effect on prices at the pump. The measures seek to boost spending for Wall Street enforcement at a time when congressional Republicans are seeking to limit the reach of federal financial regulations.
Obama plans to spell out his $52 million proposal Tuesday at the White House, where he will be joined by Attorney General Eric Holder.
(Excerpt) Read more at foxnews.com ...
Carter tried to regulate. Remember the even/odd days and gas station lines stretching for blocks.
I hope the republicans draw a clear distinction between free market solutions and government strangleholds.
Every contract transfers 35-40 times, with almost every trade involves investment companies. Since relaxing of regulations, we have seen oil jump from $30 per barrel to $140 a barrel, with no real oil shortages. Take speculation out and oil prices will decline. No political agenda here, just an observation from someone who is involved in the industry.
Ask yourself, if you owned a company and were looking for employees, would you actually hire Pelosi? To do what? Would you hire Biden? To do what? Would you hire Obama? To do what? etc. etc.
I don’t see anything in there about telling the environmentalists to take a flying leap and doing some serious drilling right here at home.
All Obama will accomplish is to drive more oil trading out of the US and into more foreign markets. NYSE is not the only place in the world trading oil. With electronic trading, most won’t even notice a difference.
Pel-lousy can clean toilets, Bidet can empty trashcans and 0bummer can learn to sweep floors. They aren’t qualified to do any more than those menial tasks, if that, with training.
Meanwhile the drumbeat of Dictator Obama grows louder:
regulate -— control -— destroy -— Regulate -— control -— destroy -— REgulate -— control -— destroy -— REGulate -— control -— destroy -— REGU
Just another Obama Democrat scam to make the Republicans look bad when they fight regulating the oil companies that the Democrats are blaming for the exhorbitant cost of fuel.
Trying to divert the attention from themselves AGAIN.
Ah, yes... regulate the market... because it worked SO WELL when Carter did it.
Yet another election-year “do something” measure that makes the initial problem even more problematic.
instead of doing what is right for the country. Here's the bottom line of Mr. Obama's plan.
Hos 12:7-9
7 The merchant uses dishonest scales;he loves to defraud.
8 Ephraim boasts,"I am very rich; I have become wealthy.With all my wealth they will not find in me any iniquity or sin."
9 "I am the Lord your God,[who brought you] out of Egypt; I will make you live in tents again,
as in the days of your appointed feasts.
NIV
Why wait for a second term? At this rate, the POS is going to do us in well before that.
I don’t understand how multiple “contract transfers” can drive the price in any net direction unless there is manipulation (i.e.painting the ticker) going on. Every contract has a winner and a loser seconds after the trade is made depending on whether the next tic was up or down.
While relaxing regulations(whatever that entailed) may correlate to rising prices, that doesn’t mean causation. Oil is generally fungible so if Akmed in Saudi Arabia or Snuffy in Oklahoma refuses to pump oil for his part of the $100/bl, then the price will go up till they turn the pump on. And the price includes delivery costs too no??? So what’s wrong with traders, acting on behalf of their customers, paying a higher price in return for a guaranteed supply? Isn’t that what futures are all about?
I have a memo I wrote to my crew back in the early fall of 1985, think I have the time correct. Attached to the memo was a one page article from “Oil and Gas Journal” reporting that NYMEX would begin trial trades on oil futures. NYMEX was dying because there was so little volatility in their traditional commodity trades. My memo said that this action by NYMEX would be the onset of extreme volatility in oil prices, mark the day when the oil producer would become price takers and not price makers and that prices would be marked by relatively short frequency and high amplitude price swings.
Before this prices were relatively stable save for the embargoes. Other than that oil prices were set by supply and demand determined by people who understood the market.
Once the futures markets were run by and for the advantage of producers, like farmers, not so much anymore. The futures markets are now operated by rich old men with ambitious racket ball playing youngsters on the trading floor. For all they care they could be trading kumquats... the whole thing is about arbitrage and skimming a little as the trade goes by. Nothing of value is produced and it just feels wrong to me. It is a game of risk and not hard work.
The problem is not commodities traders — who merely respond to supply and demand. Speculation makes the market and provides protection from big quick price swings. Raw speculation arises from uncertainty in the future, Having a drudge headline every week about Greece defaulting, Spain, Italy, France having problems, Striking Iran, closing the straights all keep the upward pressure on the market.
There already is regulation and talk of more regulation is only to provide lip service to a problem they [obama] caused but cannot or do not want to fix.
For one thing, they never have to take possession of the commodity, so they don't incur any costs of physical ownership.
Not to be a nit picker but it traders on the New York Merchantile Exchange. Commodities do not trade on the stock exchange.
Thanks for the correction.
Cheers
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