First a video:
Enron Loophole
Recently in the news, we have all heard about how the CFTC is now investigating trading in the dark market known as commodity futures trading. The Enron loophole exempts speculators from scrutiny on ALL energy trading done electronically. What's funny is that these same futures traders also OWN most of the energy market. That's right, the same people who produce the energy, they are BETTING on what the price of energy will be in the future, and they can also control what the same price will be. A legalized form of insider trading. Experts predict that by closing the Enron loophole, gas prices should fall 25-50%. The CEO of BP Petroleum recently said, “It is the case that the price of oil has gone up while nothing has changed physically.”
Deflating the oil bubble
Link to Cspan broadcast of U.S. Senate hearing on Energy Market Manipulation:
U.S. Senate hearing on Energy Market Manipulation
Enron Loophole
Recently in the news, we have all heard about how the CFTC is now investigating trading in the dark market known as commodity futures trading. The Enron loophole exempts speculators from scrutiny on ALL energy trading done electronically. What's funny is that these same futures traders also OWN most of the energy market. That's right, the same people who produce the energy, they are BETTING on what the price of energy will be in the future, and they can also control what the same price will be. A legalized form of insider trading. Experts predict that by closing the Enron loophole, gas prices should fall 25-50%. The CEO of BP Petroleum recently said, “It is the case that the price of oil has gone up while nothing has changed physically.”
Deflating the oil bubble
Ryssdal: Why is it so hard to figure out what's going on in commodities markets -- oil specifically?
Greenberger: Well, the reason it's hard to figure out is about 30 percent of our crude oil energy futures are traded in what is called a dark market -- that is a market that was deregulated in December of 2000 at the behest of Enron. Prior to that legislation..., all energy futures traded in the United States or affecting the United States in a significant fashion were regulated ... under a very careful regime that had been perfected over about 78 years and many observers believe that because those markets are not being policed, malpractices are being committed and traders are able to boost the price virtually at their will.
Ryssdal: So just to be clear, you do think that we're in a bubble, then?
Greenberger: I believe it and I'm certainly not alone in my belief. If you talk to anybody who trades in these markets on a regular basis, they will tell you that the markets are completely dysfunctional and out of control because of speculative activity.
Link to Cspan broadcast of U.S. Senate hearing on Energy Market Manipulation:
U.S. Senate hearing on Energy Market Manipulation
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