Should We Re-enact Glass-Steagall?

[Toro]

Hard to say but banks like JP Morgan underwrote the structured products and kept the equity piece on their books. They then insured that piece with AIG, which allowed them to underwrite even more crappy structured products to keep them on their books.

That's great and all, but Glass Steagall wasn't designed to prevent that.

There were certainly MBS under GS.

Yes, but bank equity was higher, the quality of the MBS was higher and there was less MBS generally.

 

[The Rabbi]

That's great and all, but Glass Steagall wasn't designed to prevent that.

There were certainly MBS under GS.

Yes, but bank equity was higher, the quality of the MBS was higher and there was less MBS generally.

Noq uestion you are correct on all three points. But so what? Those things were functions of the Fed keeping rates low and making mortgages and their bonds very lucrative. With rising RE prices it seemed reasonable at the time (I guess). But the culprit is not regulation or de-regulation but an overly accomadative Fed. About like what we have now but on steroids.

 

[Sallow]

Glass-Steagall prevented Commercial Banks and Investment Banks from merging and each bank from taking on the roles and responsibilities of their opposing banks. AIG is not a bank, and never merged with any other entity.

You don't have a clue what happened during this crisis, do you... So, just to clarify on what you do understand, lets go over:

Banks got in trouble because they bought short term commercial paper and were heavily leveraged in mortgage-backed securities.

How would have Glass Steagall prevented any of this?

Hard to say but banks like JP Morgan underwrote the structured products and kept the equity piece on their books. They then insured that piece with AIG, which allowed them to underwrite even more crappy structured products to keep them on their books.

That's great and all, but Glass Steagall wasn't designed to prevent that.

Um..yeah..it was.

 

[Sallow]

Each of your points was wrong.

You're a very confused person.

Then why agree?

Look up confusion, ace.

It doesn't mean what you think it means.

I haven't agreed with a single of your error filled points.

Ah so..you are playing games.

No interest in that.

Especially with a fool who hasn't a clue about the topic.

 

[Toro]

Things were different then, as many banks didn't operate branch banks. Rumours of problems creates bank runs. That's really never changed. My main focus of bank failures during the pre-FDIC era is centered around the cycles of booms and bust during the late 1800's. Any data on this?

I'm sure there is some around. However, bank failures weren't rare.

Milton Friedman said that the FDIC was a reason why the Depression ended because people began to trust the banking system again. The ratio of deposits to currency collapsed in 1931 and 1932 as people pulled their money out of banks and, literally, stuck it in cans and their mattresses. During the Depression, financial strength of banks didn't matter. Stronger banks actually failed at a greater rate than weaker banks as panics and runs caused people to act irrationally and pull their money out on rumors.

 

[Toro]

There were certainly MBS under GS.

Yes, but bank equity was higher, the quality of the MBS was higher and there was less MBS generally.

Noq uestion you are correct on all three points. But so what? Those things were functions of the Fed keeping rates low and making mortgages and their bonds very lucrative. With rising RE prices it seemed reasonable at the time (I guess). But the culprit is not regulation or de-regulation but an overly accomadative Fed. About like what we have now but on steroids.

I agree that the Fed was the biggest cause of the Financial Crisis.

 

[Toddsterpatriot]

Then why agree?

Look up confusion, ace.

It doesn't mean what you think it means.

I haven't agreed with a single of your error filled points.

Ah so..you are playing games.

No interest in that.

Especially with a fool who hasn't a clue about the topic.

No games, just pointing out your errors.
Your many errors.

You're right about one thing, you are a fool who hasn't a clue about the topic.

 

[AmazonTania]

Hard to say but banks like JP Morgan underwrote the structured products and kept the equity piece on their books. They then insured that piece with AIG, which allowed them to underwrite even more crappy structured products to keep them on their books.

That's great and all, but Glass Steagall wasn't designed to prevent that.

Um..yeah..it was.

JP Morgan was an investment bank before it acquired Chase and has actually operated as a Commercial bank most the time it has been active. JP Morgan was still operating under it's sister company, Morgan Stanley, as an investment arm. So no, it wouldn't have prevented a thing.

The main banks at the heart of the crisis were pure investment banks which never set foot on commercial soil. Their problems were just as big as the pure commercial banks and the banks which did merge. We can imagine a scenario where the investment bank division combined with the commercial bank division to purchase risky assets which were underwritten. But most commercial banks don't have investment bank divisions, and bought mortgage securities as well.

I ask you again, how would have Glass Steagall prevented any of this from happening?

 

[AmazonTania]

Things were different then, as many banks didn't operate branch banks. Rumours of problems creates bank runs. That's really never changed. My main focus of bank failures during the pre-FDIC era is centered around the cycles of booms and bust during the late 1800's. Any data on this?

I'm sure there is some around. However, bank failures weren't rare.

I don't dispute that bank failures were common. I am just point out that there is really no difference.

Milton Friedman said that the FDIC was a reason why the Depression ended because people began to trust the banking system again. The ratio of deposits to currency collapsed in 1931 and 1932 as people pulled their money out of banks and, literally, stuck it in cans and their mattresses. During the Depression, financial strength of banks didn't matter. Stronger banks actually failed at a greater rate than weaker banks as panics and runs caused people to act irrationally and pull their money out on rumors.

People haven't trusted banks at any time before the pre-FDIC era. That hasn't changed, and is still pretty much the sentiment for this era. The only difference is that Credit Unions have substituted the big banks, despite the fact that they are not any safer.

As for ending the Depression. That's debatable.

 

[Polk]

1. Bank failures are far more rare today than they were before the existence of FDIC.

This is false. Bank failures before the existence of the FDIC generally only happened during a recession. A recession ensued a financial panic, which resulted in a bank run, which ultimately resulted in a bank failure.

Today, banks are failing even when there no threat of an economic downturn at all. There were over 50 bank failures in 2012 alone. To say that bank failures are far more rare today is completely erroneous.

No, it's not. You have no idea what you're talking about. In fact, before the FDIC existed, there were more bank failure is good years for the economy than occur during recessions today.

The highest annual number of bank failures during the current crisis: 157 (2010).
The highest annual number since the FDIC was created: 534 (1989).
The lowest annual number in decade before the FDIC was created: 498 (1928).

In the four years before the FDIC was created, there were over 1,000 bank failures per year and in those four years combined, 40% of banks in the United States failed.

2. Banks still compete on the same functions they've always competed on.

Some banks might, but the vast majority does not. The public just doesn't care. There is really no difference between competing banks these days. Interest rates are at historic lows, so there really isn't much of a difference between a few basis points when it comes to Time Deposits and Savings.

These days, the only thing banks compete on are fees on checking accounts and late fees on credit cards and overdraft features on accounts. That's about it.

That's a feature of the current low (nominal) interest rate environment, not caused by the existence of the FDIC.

3. There is no sound reason that the general public should need to understand the details of how a bank's balance sheet works.

T accounting is not so difficult to understand. And you really don't need to be an accounting expert to know the type of investments your bank is making. You should know what risky investments your bank is making before you decide to become a creditor. That is, if you actually care what happens to your money when you deposit into one of these banks.

I think you fail to realize what is and is not difficult for average people.

4. Their deposits are safe to the extent the government is solvent. If the government is insolvent, then it doesn't matter where accounts are safe or not.

The FDIC wouldn't be able to insure the deposits of the Top 20 banks in the country if another financial collapse were to occur in the country.The FDIC simply does not have the funds to cover them all, let alone just one.

That doesn't really counter my point.

 

[eagle1462010]

RIGZONE - The Price of Oil, Speculation and the Election

If the oil market were functioning in an unfettered way, reflecting the true dynamics of supply and demand, there would be no reason for prices to be this high. To quote Sen. Bernie Sanders (D. Vt.) "The price of oil, while declining somewhat in recent weeks, was over $95 a barrel today. That's about $30 higher than two years ago. The theory behind the setting of oil prices is that its price is determined by the fundamentals of supply and demand. The fact of the matter is that there is more supply and less demand today than there was two years ago when gasoline prices averaged $2.44 a gallon" ('Stop oil Speculation Now' Huffington Post 6/15/11).

Perhaps even more succinctly and altogether applicable today were those words of truth uttered by the late Leon Hess, founder and Chairman of Hess Oil, and indisputably one of the Grandees of oildom, before the Senate Committee on Government affairs on Nov. 1, 1990 (I repeat, 1990): "I'm an old man, but I'd bet my life that if the Merc (the New York Mercantile Exchange) was not in operation there would be ample oil at reasonable prices all over the world."

The issue has only accelerated as highlighted in Senator Sanders commentary: "Ten years ago, speculators only controlled 30 percent of the oil futures market. Today Wall Street speculators control more than 80% of the market."

In effect oil is no longer priced, as it was in my trading days, on the basis of a "wet barrel." Those trading the market at the time were either the producers, or consumers or physical traders who took actual title to the oil and chartered vessels to deliver the oil to consumers around the world. Today oil is no longer priced as a wet barrel but rather as a financial instrument having little bearing on the underlying dynamics of supply and demand, being traded by myriad speculators most whom never have produced a barrel of oil, nor taken delivery, nor consumed a barrel of oil and in many cases have never seen a real oil well, or visited a refinery. Yet in large measure, their actions determine what we pay for a gallon of gasoline by buying and selling not "wet" barrels of oil, but financial instruments that well could be labeled "paper barrels."

In a report issued earlier this year by the St. Louis Federal Reserve Bank commenting "… unprecedented growth in commodity index trading coincided with a boom in commodity prices; some have extended that observation into a conclusion that speculation by financial traders- and not supply and demand- drove the recent boom in commodity prices. This kind of argument is perhaps strongest in oil market, where large investment banks. Hedge funds and other investment funds have invested billions of dollars in oil futures over the past decade." The study wisely admonishes "Disentangling the true drivers of oil prices is a critical first step for allocating resources and designing good policy."

April 2011, in a bright and hopeful moment responding to the pernicious influence of oil futures trading on oil prices, the Obama administration amid fanfare announced the formation of the "Oil/Gas Pricing Fraud Panel." It was meant to be a call to investigate whether oil prices were a true reflection of market forces or whether they had been impacted by speculation or worse, manipulation. Regretfully and perhaps better said, irresponsibly, now more than a year and a half after its formation, nothing, nada has been heard from this august body.

Couple this with the ongoing dereliction of Commodity Futures Trading Commission (CFTC) and the administration policies policing and countering the malign impact of oil commodity trading on the futures exchanges has been both irresponsible and non-existent.

Consider that on July 27, 2009 the Wall Street Journal published the article, "Traders Blamed For Oil Spike" reporting that "The Commodity Futures Trading Commission plans to issue a report next month suggesting that speculators played a significant role in driving wild price swings in oil prices- a reversal of an earlier CFTC position. Well, now three years later we are still waiting for the report.

But the CFTC's ineffectuality goes further. According to the Wall Street reform act, Dodd-Frank, required the CFTC to impose strict limits on the amount of energy futures that could be traded by speculators by January 17, 2012. We are now nearing the end of September and the CFTC still has not imposed any limits whatsoever, clearly in contravention to the stated law of the land. To quote Senator Sanders musings this June past: "Last month, six senators and I held a meeting in my office with Gary Gensler, Chairman of the CFTC. Unfortunately I was very disappointed in both the tone of the meeting and the complete lack of urgency at the CFTC with respect to cracking down on oil speculators as required by law."

The issue of speculation, and possible manipulation of oil prices, other than lip service, is clearly not being addressed by this administration. It is an issue that touches virtually every American consumer where it hurts most directly, in paying for his day-to-day needs of gasoline, heating oil and on. It needs be high on the agenda of national discourse as another four years of neglect on this issue could be disastrous!

Couple this with CFTC inaction it becomes a broad condemnation of the Administration's inattention to an issue that impacts the pocketbooks of virtually every American

Comments

Before the Graham Leahy Act Commodities Speculation was controlled to a degree. Not allowing the MASSIVE SPECULATION that occurred after the Traders were allowed to Trade Commodities on outside of SEC Control to LIMIT THE AMOUNT OF TRADES in VITAL FUCKING COMMODITIES THAT EFFECT EVERY PERSON ON PLANET EARTH.

But hey, a bunch of WALL STREET GUYS got to make a lot of money...................

The REASON TO CONTROL THESE ASSHOLES is because of what they did that LED TO THE CRASH. LED TO $4 A GALLON GAS, and LED TO 350% INCREASES IN COMMODITY PRICES.

Derivatives through the Roof and into OUTER SPACE.

The same DAMN BULL SHIT THAT BROUGHT ON THE GREAT DEPRESSION.

And the FINANCIAL GUYS SAY IT'S RIGHTEOUS.

FUCK OFF. And I aint NO LIB. This subject ticks me off. As the Ass clowns who did this RUINED MANY AMERICAN LIVES. People LOST THEIR HOMES, not because of they overburdened themselves with Debt, but BECAUSE THEY LOST THEIR FING JOBS AFTER WALLSTREET TANKED US.

You can go into it was the housing market BS, but ultimately the Markets SCREWED EVERYBODY TO MAKE A BUCK. The Great American BUBBLE MACHINE. And Americans paid for it AT THE PUMP, AND AT THE STORE.

The Markets were SUPPOSED TO BE ABOUT INVESTING in a business, and if the business is doing good you make money. NOT TRADING THE DAMN THING 3000 TIMES A DAY TO DRIVE THE PRICES UP TO MAKE A QUICK BUCK. Then pull the rug out and watch them TANK BECAUSE OF SPECULATORS.

ending current rant. To you STOCK MARKET BS SUCK UPS, FO.

 

[KissMy]

It is very telling when the entire Wallstreet banking & financial system melted down forcing their investors to withdraw funds from Madoff investment to cover their losses. Our financial system is more risky & makes less sense than a Ponzi scheme.

 

[eagle1462010]

HowStuffWorks "Commodity Futures Trading Commission"

Commodity Futures Trading Commission
In the United States, oil futures come in three major forms: contracts on crude oil, gasoline and heating oil. All three of these commodities are essential for the nation to operate and thrive. Unfortunately, the Commodity Futures Trading Commission (CFTC) was unable to do anything to stop manipulation of the market for the energy on which we're painfully dependent.
The CFTC was established by Congress in 1974 specifically to prevent speculation from artificially inflating the price of commodities. Over time, its powers were slowly stripped. The scope of the CFTC's power to regulate is limited to trading within the formal setting of the New York Mercantile Exchange (NYMEX). Traders on this exchange must file daily reports on exchanges so the commission can keep an eye on speculation. But speculators were able to make an end run around the CFTC's regulatory power, thanks to help from oil giant Enron.
The year 2000 was a bad one for consumers as far as oil goes. Prices remained low (less than $30 a barrel), but mechanisms were set in motion that would raise prices and vastly increase oil company profits. That year, Congress (under lobby by Enron and other oil companies) removed the regulatory powers of the CFTC over American oil futures traded over the counter (OTC) [source: Levin]. Enron had created specialized software that allowed futures to be traded OTC -- exchanges outside of the formal exchange markets. The software and what came to be known as the Enron loophole for OTC trading allowed futures exchanges without government oversight.
Also in 2000, a consortium of oil companies and financial institutions created the Intercontinental Exchange (ICE) in London to trade European oil futures, although the group was headquartered in Atlanta. Since the exchange was in Europe, the CFTC's reach didn't extend to it.
The CFTC gave up more regulatory power in early 2006 when it allowed the Intercontinental Exchange to install terminals in the United States [source: Engdahl]. Up to that point, only OTC speculators could trade outside of CFTC oversight. But once the commission allowed U.S. futures to be traded on ICE, rather than only on NYMEX, the CFTC lost its ability to regulate even formal exchanges. Once traded on ICE, an American futures derivative fell out of the jurisdiction of the CFTC. The convergence of the Enron loophole and the establishment of ICE meant the CFTC could no longer accurately police speculators who sought to drive up energy prices through futures speculation.
Whether it was speculators that drove up the cost of gas and oil is still debated. A July 2008 report by the International Energy Agency concluded that speculation had little to do with price increases [source: CNN Money]. But a report issued the following September contradicted the IEA report, pointing to correlations between the influx of money in oil futures markets and the rising cost of oil. The price of oil doubled, tripled and eventually quadrupled in step with the increase from $13 billion to $260 billion in the market from 2003 to 2008 [source: U.S. Senate].
In response to calls for better regulation of oil futures, Congress introduced the Consumer-First Energy Act in May 2008. The bill would have extended CFTC oversight to foreign markets, but the act died on the Senate floor the following June. After the bill was defeated, the argument over oil speculation changed focus. No longer was the debate over what caused oil prices to rise beginning in 2006, but how long the United States would allow speculation to continue.
Print Cite Feedback

 

[eagle1462010]

THE ENRON LOOPHOLE & AND OIL FUTURES TRADING AND PHIL GRAMM | Liberalscum Buster

The Commodity Futures Modernization Act of 2000 deregulated the market for energy futures. This is what is commonly referred to as “the Enron loophole.” It has led to malpractice and manipulation of these unregulated dark markets resulting in price spikes far beyond what the normal law of supply and demand would dictate.

Excerpt From The Star-Telegram:

The late, infamous Enron head, Ken Lay, realized in the eighties that he could make more money bidding up energy in the futures market than by actually creating and selling energy. But, under then-current rules, how much you could make swapping paper was limited. Fortuitously, Lay had excellent Texas political connections; and in November of 1992, the head of the Commodities Futures Trading Commission moved to exempt energy-derivative contracts and related swaps from any government oversight.

A vote was hurriedly put together before the Clinton White House would take over, and so Lay could finally start “dark” – unregulated – futures trading. The head of the CFTC was Wendy Gramm, wife of Texas Senator Phil Gramm; five weeks after she left, she became a board member of Enron in Houston.

Fast-forward to late 2000 and H.R. 5660, the Commodity Futures Modernization Act of 2000, sponsored by Republican Congressman Thomas Ewing of Illinois. That bill went nowhere, even though Tom Delay’s wife Christine was then working for a Washington lobbying firm, Alexander Strategies – which Enron had paid $200,000 to push through legislation for permanent energy deregulation in these “dark” markets.

Six months later came Senate Bill 3283, also named the Commodity Futures Modernization Act of 2000. This time around the sponsor was Republican Sen. Richard Lugar of Indiana, and now Phil Gramm was listed as one of the bill’s co-sponsors. Like it had in the House, this bill was destined to go nowhere until, late one night, it was attached as a rider to an 11,000-page appropriations bill – which was signed into law by President Clinton.

Now traders had an officially deregulated market for energy futures. Worse, that bill also deregulated many financial instruments – including the collateralized debt obligations that are at the center of today’s mortgage crisis, which may well cost us more than $1 trillion before it’s over.

Everybody Was Warned!

As USA Today wrote of this fiasco in January of 2002, “But, as a power marketer, [Enron] could buy enough energy-futures contracts in a region to create a virtual monopoly.” That’s right: As early as the winter of 2002, it was widely known that the 2000 Commodities Futures Modernization Act had created a monster, capable of running up energy prices outside of the normal law of supply and demand. Worse, our government had been warned this was going to happen. Representatives of the Federal Reserve, the Securities and Exchange Commission and the CFTC had already told Congress not to deregulate energy because “the market was ripe for manipulation.” Everybody was warned; that’s why this deregulation bill was stealthily inserted into that appropriations bill without a floor debate.

Phil Gramm’s office denied that he had anything to do with writing the section of that bill that actually deregulated energy. And yet Prof. Michael Greenberger, formerly a CFTC board member himself, said that Gramm’s wife Wendy, along with a few lobbyists and Wall Street attorneys, had rewritten it. When Robert Manor of the Chicago Times wrote about this situation on January 18, 2002, neither Gramm could be reached for comment.

Kill It Before It Multiplies

When Enron failed and took its private, unregulated energy exchange to the grave, another rose to take its place. The Intercontinental Exchange (ICE) was the brainchild of Morgan Stanley, Goldman Sachs, British Petroleum, Deutsche Bank, Dean Witter, Royal Dutch Shell, SG Investment Bank and Totalfina. In 2001 ICE purchased the International Petroleum Exchange in London; renamed ICE Futures, it now operates as an “exempt commercial market” under section 2(H)(3) of the Commodity Exchange Act. As the Senate hearings pointed out in the summer of 2006, “Both markets operate outside of any CFTC oversight.”

If you reread the quotes at the start of this story again, you find that many officials in the government warned against what would happen in a deregulated energy market, because it was so easy to manipulate. We already know this to be true thanks to Enron’s California misdeeds. And, as we pointed out last week, British Petroleum was busted for manipulating the propane market and fined over $300 million; and Amaranth Partners was caught manipulating the natural gas market, unconscionably causing the futures price for natural gas to raise every Texan’s electric bills. (It took two years for Amaranth to be exposed.) And yes, the manipulation happened in the new “dark” and unregulated exchanges, making it almost impossible to uncover. So it’s not a question of “if” some “theoretically possible” manipulation and distortion of the market will result from this bill, championed by Phil Gramm, his wife Wendy and Christine Delay’s employer, Alexander Strategies. The reason it is not theoretical is because we keep catching well-known companies doing it on a regular basis.

No Conscience in Congress?

All you hear daily is that the world has a severe shortage of oil, or you can buy only 200 pounds of rice at one time, or we will have a gasoline crisis this summer, etc. But it takes only a minute to find hundreds of quotes from highly respected oil and economic analysts, (not to mention CEOs of the major oil companies), that completely dismiss the claim of oil, gas or food shortages that have been headlining the news.

Even more troubling is that within months of the CFMA’s going into effect, we knew it had enabled easy manipulation of any energy market, but nothing was done to fix it. Nor was anything done when the Senate held its hearings on this matter in 2006, or in the House hearings last December.

Today we call this situation the “Enron Loophole,” but that’s untrue. It’s not a loophole: it was a new law passed in 2000 – and far more individuals than Ken Lay have used that law to line their pockets with hundreds of billions of American consumers’ hard-earned dollars. That’s not my opinion, that’s direct testimony by numerous experts before both the House and Senate.

Professor Greenberger warned about our “New American Economy” far better than I could:

“Should we have an economy that’s based on whether people make good or bad bets? Or should we have an economy where people build companies, create manufacturing, do inventions, advance the American society and make it more productive? We are rewarding people for sitting at their computers and punching in bets. That’s not the way our economy is going to be built, and India and China, with their focus on science and industry and building real businesses, are going to eat our lunch, unless the American public wakes up and puts an end to an economy that praises and makes heroes out of speculators.”

Greenberger’s statement explains why Detroit and other American manufacturers suffer while Wall Street speculators make a fortune — and your rapidly shrinking checkbook pays for it, every time you buy food, fuel or feed.

All because there is no shortage of these goods, you’re just being told there is because it’s more profitable – for a few – that way.

© 2008 Ed Wallace

Everybody was warned; that’s probably why this deregulation bill was stealthily inserted into that appropriations bill without a floor debate.

 

[editec]

I'm of the opinion that it's probably too late for that now.

The world of banking and finance has changed so dramtically from nationalistic to internationalistic, that I suspect there isn't any national regulations that the BANKSTERS cannnot get around.

We do not have control over wealth from nation to nation, so national regulations are going to fail.

 

[eagle1462010]

In a Government of LIES, TRUTH IS TREASON.

These people, like the scumbag GRAHAM, Fucked over ALL AMERICANS. They lined their pockets, and got their daughters SWEET JOBS for POLITICAL FAVORS, and the MARKETS SCREWED EVERYBODY.

They drove up the PRICES OF HOUSING TO INSANITY, and then we wonder why SO MANY MORTGAGES ARE UNDER WATER TODAY. Because the MARKET SPECULATORS ARTIFICIALLY DROVE UP THE PRICES with FIAT MONEY, AKA DERIVATIVES and SCREWED EVERYONE.

Our Markets are way up again, but the ECONOMY ISN'T UP WITH IT. Oh, we'll get the BS the jobs LAG BEHIND THE MARKETS routine, but it's a FALSE RISE via MARKET CASINO SPECULATION.

Vital COMMODITIES SHOULD BE UNDER STRICT CONTROLS WORLD WIDE in regards to the Markets. But HEY, the ENRON LOOP HOLE WAS GOOD FOR AMERICA.

Investment bankers and those making a profit off of it would say so. As every American pays for it at the pumps, and stores.


This is WHAT CAUSED THE CRASH, and I don't care what the EXPERTS SAY, such as DERIVATIVES ARE GOOD. We know what they do when they aren't REGULATED. They would SCREW THEIR OWN FAMILY TO MAKE A BUCK, and that SHOULD NEVER HAVE BEEN ALLOWED TO HAPPEN.

It was ILLEGAL TO SPECULATE VITAL COMMODITIES BEFORE 2000. But hey. Americans love spending all their money at the PUMPS SO WALL STREET SCUMBAGS CAN MAKE A BUNCH OF MONEY.

Isn't that right, you bunch of BOOT LICKING MARKET JUNKIES.

 

[eagle1462010]

I'm of the opinion that it's probably too late for that now.

The world of banking and finance has changed so dramtically from nationalistic to internationalistic, that I suspect there isn't any national regulations that the BANKSTERS cannnot get around.

We do not have control over wealth from nation to nation, so national regulations are going to fail.

I'd say you are correct. They would simply speculate from Europe or elsewhere. They already do that anyway, as stated in some of the articles I posted. It would take a WORLD WIDE MOVEMENT TO DO THIS.

Yet, the U.S. could start this and push for other countries to do the same. They followed last time as we started this BS. We allowed the speculators to F over the entire planet.

Check out RICE PRICES and compare them to the so called Arab spring.

 

[Toro]

In a Government of LIES, TRUTH IS TREASON.

These people, like the scumbag GRAHAM, Fucked over ALL AMERICANS. They lined their pockets, and got their daughters SWEET JOBS for POLITICAL FAVORS, and the MARKETS SCREWED EVERYBODY.

They drove up the PRICES OF HOUSING TO INSANITY, and then we wonder why SO MANY MORTGAGES ARE UNDER WATER TODAY. Because the MARKET SPECULATORS ARTIFICIALLY DROVE UP THE PRICES with FIAT MONEY, AKA DERIVATIVES and SCREWED EVERYONE.

Our Markets are way up again, but the ECONOMY ISN'T UP WITH IT. Oh, we'll get the BS the jobs LAG BEHIND THE MARKETS routine, but it's a FALSE RISE via MARKET CASINO SPECULATION.

Vital COMMODITIES SHOULD BE UNDER STRICT CONTROLS WORLD WIDE in regards to the Markets. But HEY, the ENRON LOOP HOLE WAS GOOD FOR AMERICA.

Investment bankers and those making a profit off of it would say so. As every American pays for it at the pumps, and stores.


This is WHAT CAUSED THE CRASH, and I don't care what the EXPERTS SAY, such as DERIVATIVES ARE GOOD. We know what they do when they aren't REGULATED. They would SCREW THEIR OWN FAMILY TO MAKE A BUCK, and that SHOULD NEVER HAVE BEEN ALLOWED TO HAPPEN.

It was ILLEGAL TO SPECULATE VITAL COMMODITIES BEFORE 2000. But hey. Americans love spending all their money at the PUMPS SO WALL STREET SCUMBAGS CAN MAKE A BUNCH OF MONEY.

Isn't that right, you bunch of BOOT LICKING MARKET JUNKIES.

You made a mistake. You left a few words in lower case.

And don't mind those who say that posters who use lots of caps are douchebags.

 

[Toddsterpatriot]

RIGZONE - The Price of Oil, Speculation and the Election

If the oil market were functioning in an unfettered way, reflecting the true dynamics of supply and demand, there would be no reason for prices to be this high. To quote Sen. Bernie Sanders (D. Vt.) "The price of oil, while declining somewhat in recent weeks, was over $95 a barrel today. That's about $30 higher than two years ago. The theory behind the setting of oil prices is that its price is determined by the fundamentals of supply and demand. The fact of the matter is that there is more supply and less demand today than there was two years ago when gasoline prices averaged $2.44 a gallon" ('Stop oil Speculation Now' Huffington Post 6/15/11).

Perhaps even more succinctly and altogether applicable today were those words of truth uttered by the late Leon Hess, founder and Chairman of Hess Oil, and indisputably one of the Grandees of oildom, before the Senate Committee on Government affairs on Nov. 1, 1990 (I repeat, 1990): "I'm an old man, but I'd bet my life that if the Merc (the New York Mercantile Exchange) was not in operation there would be ample oil at reasonable prices all over the world."

The issue has only accelerated as highlighted in Senator Sanders commentary: "Ten years ago, speculators only controlled 30 percent of the oil futures market. Today Wall Street speculators control more than 80% of the market."

In effect oil is no longer priced, as it was in my trading days, on the basis of a "wet barrel." Those trading the market at the time were either the producers, or consumers or physical traders who took actual title to the oil and chartered vessels to deliver the oil to consumers around the world. Today oil is no longer priced as a wet barrel but rather as a financial instrument having little bearing on the underlying dynamics of supply and demand, being traded by myriad speculators most whom never have produced a barrel of oil, nor taken delivery, nor consumed a barrel of oil and in many cases have never seen a real oil well, or visited a refinery. Yet in large measure, their actions determine what we pay for a gallon of gasoline by buying and selling not "wet" barrels of oil, but financial instruments that well could be labeled "paper barrels."

In a report issued earlier this year by the St. Louis Federal Reserve Bank commenting "… unprecedented growth in commodity index trading coincided with a boom in commodity prices; some have extended that observation into a conclusion that speculation by financial traders- and not supply and demand- drove the recent boom in commodity prices. This kind of argument is perhaps strongest in oil market, where large investment banks. Hedge funds and other investment funds have invested billions of dollars in oil futures over the past decade." The study wisely admonishes "Disentangling the true drivers of oil prices is a critical first step for allocating resources and designing good policy."

April 2011, in a bright and hopeful moment responding to the pernicious influence of oil futures trading on oil prices, the Obama administration amid fanfare announced the formation of the "Oil/Gas Pricing Fraud Panel." It was meant to be a call to investigate whether oil prices were a true reflection of market forces or whether they had been impacted by speculation or worse, manipulation. Regretfully and perhaps better said, irresponsibly, now more than a year and a half after its formation, nothing, nada has been heard from this august body.

Couple this with the ongoing dereliction of Commodity Futures Trading Commission (CFTC) and the administration policies policing and countering the malign impact of oil commodity trading on the futures exchanges has been both irresponsible and non-existent.

Consider that on July 27, 2009 the Wall Street Journal published the article, "Traders Blamed For Oil Spike" reporting that "The Commodity Futures Trading Commission plans to issue a report next month suggesting that speculators played a significant role in driving wild price swings in oil prices- a reversal of an earlier CFTC position. Well, now three years later we are still waiting for the report.

But the CFTC's ineffectuality goes further. According to the Wall Street reform act, Dodd-Frank, required the CFTC to impose strict limits on the amount of energy futures that could be traded by speculators by January 17, 2012. We are now nearing the end of September and the CFTC still has not imposed any limits whatsoever, clearly in contravention to the stated law of the land. To quote Senator Sanders musings this June past: "Last month, six senators and I held a meeting in my office with Gary Gensler, Chairman of the CFTC. Unfortunately I was very disappointed in both the tone of the meeting and the complete lack of urgency at the CFTC with respect to cracking down on oil speculators as required by law."

The issue of speculation, and possible manipulation of oil prices, other than lip service, is clearly not being addressed by this administration. It is an issue that touches virtually every American consumer where it hurts most directly, in paying for his day-to-day needs of gasoline, heating oil and on. It needs be high on the agenda of national discourse as another four years of neglect on this issue could be disastrous!

Couple this with CFTC inaction it becomes a broad condemnation of the Administration's inattention to an issue that impacts the pocketbooks of virtually every American

Comments

Before the Graham Leahy Act Commodities Speculation was controlled to a degree. Not allowing the MASSIVE SPECULATION that occurred after the Traders were allowed to Trade Commodities on outside of SEC Control to LIMIT THE AMOUNT OF TRADES in VITAL FUCKING COMMODITIES THAT EFFECT EVERY PERSON ON PLANET EARTH.

But hey, a bunch of WALL STREET GUYS got to make a lot of money...................

The REASON TO CONTROL THESE ASSHOLES is because of what they did that LED TO THE CRASH. LED TO $4 A GALLON GAS, and LED TO 350% INCREASES IN COMMODITY PRICES.

Derivatives through the Roof and into OUTER SPACE.

The same DAMN BULL SHIT THAT BROUGHT ON THE GREAT DEPRESSION.

And the FINANCIAL GUYS SAY IT'S RIGHTEOUS.

FUCK OFF. And I aint NO LIB. This subject ticks me off. As the Ass clowns who did this RUINED MANY AMERICAN LIVES. People LOST THEIR HOMES, not because of they overburdened themselves with Debt, but BECAUSE THEY LOST THEIR FING JOBS AFTER WALLSTREET TANKED US.

You can go into it was the housing market BS, but ultimately the Markets SCREWED EVERYBODY TO MAKE A BUCK. The Great American BUBBLE MACHINE. And Americans paid for it AT THE PUMP, AND AT THE STORE.

The Markets were SUPPOSED TO BE ABOUT INVESTING in a business, and if the business is doing good you make money. NOT TRADING THE DAMN THING 3000 TIMES A DAY TO DRIVE THE PRICES UP TO MAKE A QUICK BUCK. Then pull the rug out and watch them TANK BECAUSE OF SPECULATORS.

ending current rant. To you STOCK MARKET BS SUCK UPS, FO.

To quote Sen. Bernie Sanders

Why would you quote that Commie idiot?

April 2011, in a bright and hopeful moment responding to the pernicious influence of oil futures trading on oil prices, the Obama administration

The only time "bright and hopeful moment" and "the Obama administration" should be in the same sentence would be in a story about the end of the Obama administration.

Yet in large measure, their actions determine what we pay for a gallon of gasoline by buying and selling not "wet" barrels of oil, but financial instruments that well could be labeled "paper barrels."

Bastards! They buy a contract, the price goes up, they sell a contract, the price goes down.
So what are you whining about again?

 

[eagle1462010]

Whining about? You are Fing Blind.

If you didn't see how the markets affected the prices up to the crash and even today you are a complete and utter idiot.

Or you are a SELF SERVING AHOLE who's making alot of money Fing over people at the pumps.

I've seen your posts before, saying the mountain of derivatives don't matter even after the data was over a THOUSAND TRILLION, and you say it's ONLY NOMINAL AND SHIT LIKE THAT.

That's a crock and you know it. A lot of people out there disagree with you pal. Your in the markets and don't mind screwing people over to make a buck, I'd guess.

None of this kind of BS caused the Great Depression......................

That's your type of attitude isn't it...................

It's all BULL and you know it.