Time To Close the Enron Loop Hole

Aren't fraud and manipulation pretty much the same thing?

Agree there has always been oil futures trading but prior to 2000 it was regulated and as you said its purpose was as a hedge for those in the oil business to lock in their prices.

The Enron loophole took out the ability to regulate the market and brought in billions of dollars of speculative money from companies not even in the energy business.

I've not really taken a close look but it would be intersting to break down the oil company profits to see where most came from. Was it from their refinery business or their speculative oil futures trading.



Ragu - more homework for you: http://select.nytimes.com/2006/09/24/business/24gret.html?scp=4&sq=Commodity+Modernization+act+of+2000&st=nyt

 

Not just oil being manipulated. Rice and wheat also which is having dire effect around the world . An interesting perspective from Pakistan.

http://www.dailytimes.com.pk/default.asp?page=2008%5C04%5C23%5Cstory_23-4-2008_pg3_3

If governments of developing countries continue to pander to global capitalist forces, running after imaginary foreign investments that are not there anyway, they will be vulnerable to the highest levels of internal unrest and destruction

Rising commodity prices have left fragile developing economies neither here nor there. Developing countries pressured or advised by the World Bank, IMF and the US, opened their markets to attract foreign investments. For most of them, real foreign investments have remained illusive because it was a zero sum game to start with. However, global speculative capitalist forces, unhindered by national restrictions, have started destroying them at an accelerated speed.

Now more than ever, effects of speculation on commodity prices in the Chicago Board of Trade or the Kansas wheat market are immediately transmitted to the rest of the world. Presently, US commodity markets are in the grip of a speculative price bubble similar to the one prevalent in real estate markets. After wrecking millions of households, speculative money has taken over essential commodities such as petrol, gas, wheat, rice etc. And this commodity price bubble has started

 

Ah, but you're assuming the cost of getting that oil from the ground to the refinery is fixed. It isn't. Supertankers pay for fuel too. But that's neither here nor there. You also assume that the company that drills for oil is the same one pumping it into your car's tank. That is not always so. Valero is the country's biggest refiner and doesn't own one oil well in Saudi. There are so many "middle men" in the biz, it's disgusting.

 

That has scant chance of happening until the current executive-connected "borrow and spend" whores are thrown wailing into the American Standard and flushed, heartily . . .