TrueLarry
Clifton Park, NY
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If you live long enough you will see it all. I haven't lived long enough for that but I have lived long enough to see the following:
Libyan oil jumped from $3 to $7 per barrel in less than 6 months.
Corn was something we used for food and feed and then we burned the cobs to get every last ounce of energy we could out of that ear of corn.
Gas was 17 cents a gallon and we were building new roads and improving the ones we had.
Social security tax was capped at $7,000 per year and we had no medicare tax - come to think of it, there was no medicare.
In the 70s we tried price controls on gas and we, therefore, couldn't buy any - long lines, no gas, big problem.
Thirty years ago, "experts" were telling us we would run out of oil by 2025 and we did nothing to change it - we just built bigger cars - cars with one person driving 100 miles round trip to work every day.
In the 70s we helped the Saudi's, Iran and Iraq build their oil fields - now they are hitting us over the financial head as thanks.
The upshot of all this is that we must make changes - the best words I have read so far is "there is no silver bullet, only silver BBs." We must do everything. We also need to start by stopping all the goverment subsidies to do stupid things like converting all our corn to fuel. We also must stop all the nonsense about taxing the big oil companies - that money goes to shareholders and research. The free market economy, and not congress, will make the difference. If congress gets involved, more stupid policies will result in more stupid activity.
For the past 20 years we have been building power plants that run on natural gas, coal and oil because we let a few wackos talk us out of nuclear power. Now we are running out of these resources. Guess what? We were running out of them a hundred years ago but nobody could think far enough into the future to start then to fix the problem. Well, folks, we are now 25 or 30 years from the end and we don't seem to be much closer to a solution. If we have no oil or we have to pay $10 per gallon for gasoline, guess what? We will all figure out how to drive less.
For every action there is an equal but opposite reaction. For every dollar in tax you pay, there is a dollar less you have to spend on stuff for yourself - including fuel, food, clothes, cars, etc. The problem is not a few tens of thousands of RVs running around the country. The price of gas for an RV owner is the least of our worries.
The real problem is that we all demand everything of the government and it is now time to pay the piper. We have all the great programs that take car of the people who think the government owes them everything and a bunch of polititions who will vote for anything as long as it gets them re-elected. And guess who is paying? Those few of us who still make a living by working so the free loaders can get their fill from the piggie. (By the way, I agree with the comment about paying into social security and getting my share back out; however, the program design has a flaw and eventually, somebody won't be getting their money out because there won't be any. It will probably be your grandchildren who get screwed.)
Well, if you are still reading, you pretty much have figured out that I'm not a socialist. A free market economy can and will help us solve the problems. The government just moves the problems around and sends us a bill for the privelege. Happy ranting.
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tabraha
Pomaria, South Carolina
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Well put Larry. Enjoyed the reading.
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AO_hitech
SF Bay Area
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U.S. Senator Dianne Feinstein
Floor Statement in Support of
The "Stop Excessive Energy Speculation Act"
July 23, 2008
"Mr. President, I wish I could come to the floor and say there is a quick fix for gasoline prices at the pump. This is needed as much as anywhere in California where gas prices are high -- and at times the very highest.
I wish I could say there was a quick fix. But I really can't.
I wish I could say that if we could drill all of the Outer Continental Shelf, if we could drill on all of the public land in America, the price of pump would drop immediately, but I can't. In all good conscience I don't believe that opening the Outer Continental Shelf to new drilling would lower the prices at the pump any time in the near future.
oFirst place, it takes two years for Minerals and Management Services to do the contracts.
oSecond place, all drilling rigs are now leased. There need to be new rigs.
oThird place, there is no additional refining capacity.
oFourth place, drilling in the outer continental shelf and on public lands in America over the last eight years has increased by 361% and at the same time the price of oil has doubled.
So there is no relationship between drilling on the outer continental shelf, drilling on public lands in America and the price of oil. I deeply believe this.
Some say it's simply a problem of supply and demand but physical supplies of oil and natural gas have remained relatively stable over the past year.
In fact, if you remember, executives from oil companies testified before congress recently and asserted that the price should be about $60 a barrel if it were just a matter of supply and demand.
Some point to instability in the Middle East and Africa's production regions. Others have pointed to the falling dollar. These are certainly factors. But it can't explain the sharp uptick in prices we've seen at the pump over the last few months.
So what's really going on? What's new in this picture? Consumption in America has dropped 3 percent this year over the same period last year.
So what's new? There's only one thing that's different. There's only one thing that's new -- and it's a massive influx of speculation in the marketplace. This is the 800-pound gorilla.
Increasingly, experts now say that rampant speculation in energy markets account for anywhere from 25 to 40 percent of the energy price increase. Some will say even more.
So I think we've got to take a look at why this is the case and what we can do about it.
In May, Congress took a major step forward in the effort to bring more oversight to energy futures markets when we enacted legislation to close the notorious Enron loophole. The senator from Minnesota just referred to it.
I had worked on this for six years. I came to the Floor when Phil Gramm argued against it. We lost - got just 48 votes.
We came back again. We finally got it in the farm bill this time. The notorious Enron loophole, today, is closed.
Now, what was that? This loophole was created in 2000 when a measure was inserted in the dark of night into a must-pass appropriations bill at the behest of Enron and others to essentially eliminate them from the Commodities Modernization Act. Two commodities were left out: energy and metals.
During the Western Energy Crisis, we saw the costs soar from $8 billion in 1999 to $27 billion in 2000, and then to $27.5 billion in 2001.
The reason for this was, in the main, manipulation, fraud, and reckless speculation of the worst sort - all because you could trade on electronic platforms with no transparency and there was no anti-fraud or anti-manipulation oversight by the Commodities Futures Trading Commission.
When all was said and done, the energy traders left California taxpayers with an increased bill of about $40 billion. To date, 32 companies have pled guilty to market manipulation and settled $6 billion in claims.
In recent years, we also saw the $6 billion collapse of the Amaranth hedge fund because of unregulated speculation in natural gas futures on electronic exchanges. And the list goes on. And this has typified the energy marketplace.
So it became clear that a legislative fix was needed. And we finally got that done, as I said.
The bill, which is now law, ensures that all major trades of energy futures that could drive up prices, or have what's called a price discovery impact, are placed under the oversight of the Commodities Futures Trading Commission.
The new law imposes limits on rampant speculation, prevents fraud and manipulation, requires traders for the first time to keep records and provide an audit trail to the CFTC.
This was a significant victory. It's signed into law.
But as we continue to learn more about what's really going on with energy futures markets, it's clear that more work remains to be done. We're learning about additional loopholes that must be closed. And the legislation before us is critical to ensure that we can level the playing field in energy markets, that there's transparency there.
First, the problem of large institutional investors like pension funds -- this is what's new in this market.
From 2003 to 2008 institutional investments in commodity index funds rose from $13 billion to $317 billion. That's in five years -- from $13 billion to $317 billion. Now, you might say, what does that have to do with it?
Well, Daniel Yergin said what it has to do with it when he said that "Oil has become the new gold a financial asset in which investors seek refuge as inflation rises and the dollar weakens." Investors seek refuge.
So the implications are potentially devastating. And here's why. Unlike gold, energy and agricultural commodities meet essential needs in every day life of average people. They are limited. They aren't pork bellies. Energy is limited in the amount we have.
And these institutional investors, the big pension funds like my own, the California Public Employee Retirement Fund or CalPERS, has invested over $1 billion in these markets.
These institutional investors are trading long on energy futures prices. In other words, they are betting that the prices in these future markets continue to rise. They're not hedging against the risk of changing oil prices as airlines and utilities frequently do. They never take delivery of a product. They participate in the oil markets only on paper.
Yet these investors, the big ones, are currently exempt from CFTC regulation when they execute these trades through brokers or dealers. These trades are called "swaps."
Currently, the CFTC limits speculation positions to a total of 20 million barrels of oil and three million barrels of oil in the last three days of a contract. However, these same investors avoid these limits by executing their trades as swaps. This is a mistake. Institutional investors have become speculators.
Last month, the CFTC announced it would review trading practices for these investors and this is a positive step. But legislation is still needed to level the playing field and close the loophole. This bill before us will limit the size and influence of institutional investor positions in energy markets.
To further increase transparency this bill also requires the CFTC to begin distinguishing between the institutional investor index trader and the swaps dealers who broker their trades.
This legislation closes the swaps loophole bringing transparency and speculation limits from contracts executed through swaps dealers. In that way, preventing a price discovery function as much as possible to keep prices from continuing to escalate.
Specifically, the bill gives the CFTC the authority to begin collecting data on large over-the-counter traders so it can determine whether price manipulation or excessive speculation is taking place. And this would ensure that the CFTC has a clear picture of all trading in over the counter commodity markets.
Now, the London loophole. What is the London loophole?
We must prevent U.S. crude oil contracts from being traded on international exchanges without robust oversight.
A recent report found that traders were using the London exchange to trade U.S. crude oil futures to avoid U.S. regulations - in other words, go around it. Trades exceeded U.S. speculation limits every single week since 2006.
Last month, CFTC announced it would limit this offshore market speculation and require recordkeeping and an audit trail for these traders. That's a start.
But legislation is still needed to codify the legislation. And this legislation will require foreign exchanges with customers in the United States to adopt the same speculation trading limits and reporting requirements that apply to United States trade - ending the regulatory race to the bottom.
This language is based on legislation that Senator Levin and I introduced previously. I believe very strongly that we must ensure that American energy commodities are protected from manipulation and excessive speculation regardless of where the commodities are traded.
Bottom line: this bill brings transparency, it brings accountability, it brings recordkeeping, and it brings oversight to the energy markets.
It would impose sound, proven, economic principles to markets that are currently broke and where speculation has increased so dramatically that it is pushing price up. It would close regulatory and legislative loopholes that prevent the CFTC from enforcing the commodity exchange act in energy commodity markets.
I hope my colleagues will support it. I suspect it may not pass. I hope it does because there is no question in my mind that the 800-pound gorilla and the price of gasoline at the pump is excessive speculation on commodities futures markets deals with energy.
Thank you very much, Mr. President. I yield the floor."
Sincerely yours,
Dianne Feinstein
United States Senator
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AO_hitech
SF Bay Area
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Quote:From Above: When all was said and done, the energy traders left California taxpayers with an increased bill of about $40 billion. To date, 32 companies have pled guilty to market manipulation and settled $6 billion in claims.
And some claim that it's not happening now with oil. The big "energy companies" did it, but the oil companies aren't?!?
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topflite51
In The Desert of Nevada
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It is a wonderful bill. It is a glorious speech. But it is the same old congressional rhetoric. It leaves only one question: HOW MUCH OIL WILL BE PRODUCED BY IT?.
I will bet Nada, Zip, Nothing. ![[emoticon]](http://www.coastresorts.com/sharedcontent/cfb/images/doh.gif "doh")
">David
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Any errors are a result of CRS.">
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Strawfoot
Flagstaff, AZ, USA
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TrueLarry wrote:
Well, if you are still reading, you pretty much have figured out that I'm not a socialist. A free market economy can and will help us solve the problems. The government just moves the problems around and sends us a bill for the privelege. Happy ranting.
I enjoyed what you had to say, Larry. I can't understand how people think I'm a socialist. All I am asking for is another Manhattan Project, only to create energy independence. Did people call it socialism when our government built the bomb that saved countless soldiers lives and ended the war in the pacific? Hardly. It was just government putting the best and brightest together and funding their work until they could come up with a weapon to defeat the Japanese. It would be great if we could do something like that to create large amounts of clean energy that we don't have to buy from other countries. It seems we already have the technology to build everything needed. We just need to get moving.
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AO_hitech
SF Bay Area
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topflite51 wrote:It is a wonderful bill. It is a glorious speech. But it is the same old congressional rhetoric. It leaves only one question: HOW MUCH OIL WILL BE PRODUCED BY IT?.
She was very clear on that point, and the answer is NONE. Why? Because the supply is NOT the problem driving the prices up. This bill is aimed at actually fixing the existing problem. It's not intended to fix FUTURE problems. And I am all for fixing the current problem.
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onrecess
Boca Raton, FL
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Gee, the pie chart was really cute. Misleading and deceitful, (not by you- by the govt), but cute.
Medicaid and Social Security are trust funds completely separate from the general fund. Past military expendatures are also deceitfully shown as general expenses.
The true chart woulds show over 54% as military spending (actually higher since this includes "only" $100 billion for the Iraq/Afgan wars) 30% human resources, 11% general government, and 5% physical resources.
Everyone in govt knows the true figures, but inclusion of the trust fund expenditures allows them from revealing the insane amount of military spending (more than the rest of the world, COMBINED).
You can fool some of the people all of the time,
you can fool all of the people some of the time,
and some people will fool themselves into supporting a party who controlled ALL branches of the govt and yet blames the other for there being no energy policy (You know, like Carter's).
Sigh.
Tom Anderson
2005 GeorgieBoy 35
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topflite51
In The Desert of Nevada
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AO_hitech wrote:topflite51 wrote:It is a wonderful bill. It is a glorious speech. But it is the same old congressional rhetoric. It leaves only one question: HOW MUCH OIL WILL BE PRODUCED BY IT?.
She was very clear on that point, and the answer is NONE. Why? Because the supply is NOT the problem driving the prices up. This bill is aimed at actually fixing the existing problem. It's not intended to fix FUTURE problems. And I am all for fixing the current problem. Whether you believe it or not, supply is part of the existing problem. If you and Senator Feinstein don't believe it, guess again. We need to DRILL, DRILL and DO ANYTHING ELSE TO INCREASE OUR DOMESTIC SUPPLY. Not increasing our domestic supply is saying We Will Bend Over To Our Suppliers and take it anyway they want us to. That may be in the Senator's and some others best interest, but it certainly is not in mine or most American's.
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lwmuddy
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I can see why the average American is confused about this whole financial situation the country is going through. It is like trying to diagnose a dyslexic Octopus. You don't know where to start.
To add to the confusion, we constantly read and see on tV the different theories as to who is at fault and why.
Since the major TV networks are controlled by one of the parties or ideologies, most of us see only one part of the problem in a certain way.
Some posters are quite experienced in the ins and out of politics and also how the stock market operates.
The rest of us poor old "drill press operating wage slaves" must go along with the arguments that seem to make more sense then others.
We who have simpler minds seek simpler solutions or at least simple explanations.
It is clear that a lot of very savvy politicians, bankers, investors and stock market manipulators have been allowed to run roughshod over the American public for quite a long time now.
The average American has simple wants and needs and relies on large groups like Government, the banking industry and stock market to do their job honestly and fairly, but here lies the rub. They HAVEN'T.
Can you imagine the size of the bed that all these corrupt groups are in bed with. It must be humongous.
This upcoming election "may" be the most important in the history for America.
It could take us back to the way things used to be, more or less, or take us spinning off into the universe like an out of control satellite and we would end up like the last, great, world controlling society, the ROMAN EMPIRE.
DO NOT THINK IT COULDN'T HAPPEN.
This would be the ultimate error of false pride. The Mongol Hordes are at the gate and there are some of us on the inside of that gate, ready and eager to unlock and let them take over with the promise of favors.
But, as history has taught us, the first ones to be put to the sword are the ones that unlocked the gate. The traitors if you will.
Take great pride in our country and of being an American, but never think that we are invincible. That is the number one greatest error, because it leads to complacency and we are complacent enough right now.
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