The top six financial institutions in this country own assets equal to more than 60 percent of our gross domestic product and possess enormous economic and political power. One of the great questions of our time is whether the American people, through Congress, will control the greed, recklessness and illegal behavior on Wall Street, or whether Wall Street will continue to wreak havoc on our economy and the lives of working families.
I represent Vermont, where many workers drive long distances to jobs that pay $12 an hour or less. Many seniors living on fixed incomes heat their homes with oil during our cold winters. These people have asked me to do all that I can to lower outrageously high gasoline and heating-oil prices. I intend to do just that.
Why have oil prices spiked wildly? Some argue that the volatility is a result of supply-and-demand fundamentals. More and more observers, however, believe that excessive speculation in the oil futures market by investors is driving oil prices sky high.
A June 2 article in the Wall Street Journal said it all: "Wall Street is tapping a real gusher in 2011, as heightened volatility and higher prices of oil and other raw materials boost banks' profits." ExxonMobil Chairman Rex Tillerson, testifying before a Senate panel this year, said that excessive speculation may have increased oil prices by as much as 40 percent. Delta Air Lines general counsel Richard Hirst wrote to federal regulators in December that "the speculative bubble in oil prices has concrete detrimental consequences for the real economy." An American Trucking Association vice president, Richard Moskowitz, said, "Excessive speculation has caused dramatic increases in the price of crude oil, which harms end-users like America's trucking industry."
I released records last month that documented the role of speculators and put the information on my Web site for three reasons.
First, the American people have a right to know why oil prices are artificially high. The CFTC report proved that when oil prices climbed in 2008 to more than $140 a barrel, Wall Street speculators dominated the oil futures market. Goldman Sachs alone bought and sold more than 860 million barrels of oil in the summer of 2008 with no intention of using a drop for any purpose other than to make a quick buck.
Wall Street, of course, wants to hide this information. They don't want the American people to know the extent to which speculators keep oil prices artificially high and the great damage that does to our economy. After the information became public, it was suggested that some on Wall Street may stop trading in the oil futures market. Good!
Second, Congress recognized last year that excessive oil speculation must end. The Dodd-Frank financial reform legislation required the CFTC to eliminate, prevent or diminish excessive oil speculation by Jan. 17, 2011. Months after that deadline, the commission still has failed to enforce the law, and speculators still are making out like bandits.
Third, the commodity regulators' claim that they cannot end excessive oil speculation because they lack sufficient data is nonsense. As the information I released makes clear, the commission has been collecting this information for more than three years. The time for studying is over. It is time for action.
I agree with those who say trust in government is at an all-time low. That's not because Washington is too heavy-handed with Wall Street. Quite the contrary! The American people are angry and disillusioned because they see our government act boldly to protect Wall Street CEOs but not ordinary Americans. When Wall Street needed a $700 billion bailout, the government was there for them. When working families need an end to excessive oil speculation and real relief at the gas pump, the government has failed to act.
The same Dodd-Frank bill that required commodity regulators to limit speculators included my amendment calling for an audit of the Federal Reserve from Dec. 1, 2007, to July 21, 2010, the period of the financial crisis. What we learned was that the Fed provided $16 trillion in secret, low-interest loans to every major American financial institution and to other central banks, large corporations and wealthy individuals. The audit provision was vigorously opposed by the Federal Reserve chairman.
It was right, however, that the veil of secrecy at the Fed was lifted and the American people learned about its actions.
Now it is appropriate to lift the veil of secrecy in the oil futures market. The American people have a right to know how much excessive speculation has driven up oil prices and which Wall Street firms are doing it.
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Kevin L. Petrasic: The Dodd-Frank Living Will... Will It Work?
...I'd be happy to give up on knowing who did what and who made how much in exchange for an end to the oil / energy futures markets altogether.
I thought we would make out better if we let cheap oil contracts expire, then nationalize oil, have our oil go in pot just for us, no exports of it///we control our own prices, we need to continue to use coal and we may need to nationalize natural gas, use it for trucks. If we keep our oil in the ground for 30 years, it may be worth more. More drilling here will not reduce prices as long as oil goes in with OPEC.
Contrary to what you might think Senator, Oil is traded on global markets and the CFTC can't control them all. If you want a system to shake out speculators, then increase the size of the SPR about 10X, take all of your royalties from domestic and offshore drilling in actual oil deliveries that get put into the reserve. When the price of oil starts to spike, suddenly and without warning just dump a load of oil contracts on the market. This is what central banks do to protect their currencies, and it works rather well.
Pass legislation that prevents insider information on this dumping to be leaked to congress, staffers, etc. and make it felony for a government official to leak the data or trade on it.
The SPR would even turn a profit for the taxpayers that way.
How about if, instead of "suddenly and without warning just dump a load of oil contracts on the market" the United States suddenly and without warning nationalized all oil and gas reserves, and set a fixed price it would pay for ALL oil and oil products imported? In fact, it could require oil import as crude only, forcing processing to produce jobs in the USA.
That would cure a lot more than currency problems. It would produce jobs, lower the price of fuels, turn a profit for the taxpayers, and tickle the hell out of the taxpayers, too.
The Frank 'n' Dodd bill is too complex, not simple and strong. Glass-Steagall is better because it puts a firewall between commercial banks and investment casinos.
By bailing the banks instead of using Prompt Corrective Action to take over those FDIC insured and giving Goldman Sachs special privileges, we sent the message that they are allowed to speculate. They were rewarded for loan/mortgaage speculation, crashing the economy and simultaneously vandalizing the tried and true land title system (MERS, robo signing, forgery, false notarization).
As long as we reward bad behavior, we'll get more bad behavior.
So just how much oil and coal would be available today if Obama had taken a total hands off approach?
If years ago we had built in the true cost of oil and coal (defense costs, environmental costs, health costs) into the the cost to produce, we might have more alternative energy sources developed.
Just what is an illegal war?
How about rushing to judgement, providing bogus information on WMDs, grossly underestimating the human and economic costs of the conflict and then illegally torturing prisoners?
And if you believe oil supplies have been impacted by Libya, then what the impact from the Iraqi war? Oil production dropped to almost nothing and are still well below pre war levels.
So, if Obama is trying to hamper US oil production, he is doing a lousy job of it.
oil production is up and imports are down in spite of Obama allowing the EPA to hamper oil, coal and natural gas exploitation in America, the stress on the Middle East oil supply caused by his illegal war on Libya.
There is hope after all, the free market has proven to be stronger than he is and America just might recover when he leaves office in Jan 2013.
Also governments released oil stocks onto the markets a few months back to frighten speculators out of the market. It brought down prices a bit for a few weeks and that was it. Which shows that it's not speculation that's driving the high prices. It's real demand that's causing the the high price.
All these are reason enough for speculation over the price of oil in the near term to be perfectly legitimate. If you really want to ensure that people on fixed/low incomes can afford transportation and heating, shift all the money currently being wasted in 1) Wars in Iraq and Afghanistan 2) the Department of Homeland Security 3) Subsidies for Agribusiness and the Oil Industry into alternative energy businesses and technologies. Once there's less demand for oil, the price will fall. There's no magical veil of secrecy in any futures market, it's just businesses and individuals buying oil.
funny stuff
[while our country was suffering major job losses and the effects of government claiming to be "broke']
Senator Sanders,
for the feat of lifting the veil of secrecy on the private "Federal Reserve", you deserve my undying gratitude. Please run for President soon. You are our FDR.
Congress doesn't need to pass any more new laws for the CFTC to take control of oil speculation. Even before Dodd-Frank, the CFTC was already fully empowered to go after reckless commodity speculators.
Why isn't the CFTC doing anything? Well, look who heads it: Gary Gensler, Obama's appointee.
And yes, believe it or not, Gensler used to be with Goldman Sachs.
So who's responsible for rising oil prices? Obama is. The CFTC under Walter Lukken during the Bush administration was far, far more aggressive in regulating speculation than the CFTC is right now under Gensler and Obama.
http://motherjones.com/politics/2008/03/its-deregulation-stupid
Oil companies ARE the speculators.