Thread: Senate Hearing on Oil market speculation

Dear Senator Nelson,

RE: Senate Hearing on Speculation in Oil Markets

I was astounded that you saw the energy crisis as a win/lose /us/them political game. It was obvious by your questions that you did not have a clue as to the root of the predicament or the parameters of the discussion.

The US Senate created this current crisis. Phil Graham attached an amendment to an unrelated bill. Speculators wrote this amendment. Senators voted without reading and voila! Government Regulations were magically erased. This speculation could end today if the Senate would reinstate the regulations. However, this would require that Democrats and Republicans progress from four-year-old behavior to responsible adult behavior. I am annoyed with your blame games.

Not one Senator at the hearing accepted responsibility for this despicable incompetence. Not one Senator apologized for neglecting to read the legislation. Senator Dorgan appeared to be the lone Senator who could understand the presentations and opinions of the experts.

I expect you to represent Florida based on knowledge of issues.

Irritated,

Yes,

I saw the hearing.
Actually the panelist including NWO man George Soros said the problem is not supply and demand but rather people gambling on the commodities is what is driving up the prices. Low and behold we have Dubai and a few other countries doing business here and we are letting them do whatever while holding our Untied States Speculators to a higher standard.

The panel actually consisted of a few good Americans that told the senators how to solve the problem pretty easily. The panelist agreed that moving back to regulatory prcatices that existed for 78 years until 2000 be put back in place, that would drop the price of gas 25% minimum overnight. Lets see what they do.

Mr Greenburger stated ... " The speculators market has become a giant casino." Where nowdays anyone can get in, just to gamble on making a buck, this is not real investment or a strategy for long term growth.
This is the same speculator trading rule that took effect in 2000 (basicly no rules now - regulation was dismantled) that is causing skyrocketing food prices, the housing market to collapse and the high gas prices as well as other markets in trouble. If the rules aren't reversed the back to the way it was before 2000, we are in for more big trouble. All these things causing the economy to collapse can be reversed with one rule change that would cause a reversal of rising prices overnight Mr. Greenburger said. He said a 25% price drop could happen overnight in gas prices were the rules set back to 2000. The rules basically gave oversight to the market which right now there is none and chaos is going on with no or very little oversight, usually to Americas own, not the foreign traders. Here again we have American Business undercutting Americans, business as usual. Mr, Greenburger stated the foreigners are running over the American system like a steam roller and American speculators are held hostage to regulations.

Also another problem we have...
as the expert witnesses testified in Washinton said...
70% of oil futures are held by hedge funds, trust, foundations, banks and companies like Morgan Stanley and Lehman Brothers which are people that aren't in the oil business. they buy them and sit on them and the real companies needing the "REAL" oil to re-sell can't buy them, this drives up the price. The banks and hedge funds don't sell oil and will never touch them physically. It is the old mantra, I'll buy it so the oil companies that depend on the oil to make a profit can't buy them unless they pay my jacked up price. The "REAL" oil companies have "REAL" assets like fuel trucks, workers, offices and property connected to doing this line of work, they are the ones that need the product to make a modest profit while the corporations like Morgan Stanley do not have any "REAL" assets tied up in the oil business. This gives the Morgan Stanleys the ability to lock up markets without any real investment while they jack up the prices and many times make more profit than the businesses actually risking capitol and assets to provide the resources.

The speculators never take delivery of the actual product, they couldn't because they don't have storage facilities, although from what I gathered they are building reserve tanks and hording massive amounts of Petro to further drive up the cost of the petro by creating a false demand. Some speculators hold the petro and as the prices skyrocket they then sell and a fat profit. I think the Oil Industry watchdog panelist implied that hording is against the law, but it seemed iffy.

The speculators also have an advantage because they only have to put down 6 to 7% of the transaction. Which means $7 controls $100 worth of oil for a certian time period. Most other stocks and commodities have a much higher ratio and the witnesses said this needs to be addressed as well. This is a disadvantage to the companies actually taking inventory of the oil, when they recieve the oil they have to pay 100% of the price of the oil when they take delivery or in the alloted commercial invoice date and pay periods. So, we can clearly see the companies investing "REAL" money and assets are clearly getting the raw deal while the people investing no assets (speculators) put up just 7% of the price to control much more oil. To top it off, the very large size of the money corporations like Morgan Stanley, hedge funds and others are putting into the markets are literially controlling the pricing mechanisims of the markets. Sorta like buying 80% of something and then refusing to sell unless your price is paid. Since this is energy and petro that 350 million people depend on, they win everytime, people cannot say no to a drasticly higher price, as much as they want to, so we are held hostage to this price fixing strategy. As the witnesses said, we need to address how much one entity can own, so they cannot manipulate the markets. As the hedge funs, stock corporations, foundations and ect literially have trillions of dollars to buy oil futures, they can control the markets to a degree, which hurts people depending on the oil. They have become a self inserted middlman holding the products for high profits.

Senator Olympia Snow (Rep. Maine) said Morgan Stanley (not an oil company) owned 90% of the home heating oil in her state of maine. She also said the prices are getting higher and higher and it isn't even winter. So its obvious that when companies other than petro companies own most of the petro, something fishy is going on. Another detrimental side effect is a growing number of oil companies that actually take delivery of the product and sell to home owners are going out of business as they cannot afford to pay the higher prices to re-supply. This cuts out real jobs and economy boosting companies while a 1 person speculator can control the industry providing no jobs, no buying of real assets like trucks storage facilities and othe capitol expenditures, not good for America.

One other question I would ask is why did they have George Soros on the panel of expert witnesses, he himself said he didn't understand the oil market good enough to talk about the commidity and trading side of the issue. But of course he had to bring up several times the issue of global warming and the falling inventory of oil supplies around the world but offered no proff of such opinion.

One of the Senators asked Mr. Soros if he owned any oil futures and George replied no. But to my understanding Mr. Soros does own alot of stocks in J P Morgan and they own oil futures, so again we have an issue with letting corporations act as individuals. If any of your money is invested in another company and that company owns oil futures, then you obviously own oil futures, its time we stop treating corporations as seperate individuals as if they are equal to a citizen of this nation. If anything not one dime of corporate money should ever be allowed into the poilitical areana. Lets just say each person can donate upto $100 and thats it! No pacs, no special interest, no corporate contributions, just Americans, thats it!