Energy thread

[southsider2k5]

By that do you mean energy prices themselves? Because there's an awful lot of ways in which one could find fault with the behavior of the national government in that regard.

 

I don't fault the government for the decesions that I and the general public make. I blame them for a lot, but this isn't one of those things.

[NorthSideSox72]

I don't fault the government for the decesions that I and the general public make. I blame them for a lot, but this isn't one of those things.

While I mostly agree, I do believe that this is a situation (not market speculation, but more generally, reliance on oil) that the government could and should have acted. Sometimes, market forces can push the economy in bad directions. Reliance on a fossil fuel that was dwindling in supply is a pretty good example. The federal government should have acted, earlier and more vehemently, to push the energy infrastructure in a different direction.

 

But if you mean the markets themselves, then I 100% agree with you.

 

[StrangeSox]

FWIW, the CFTC issued a report says that it finds no evidence of price manipulation.

 

Of course, clueless Congressmen disagree.

 

http://uk.reuters.com/article/businessIndu...036879720080711

 

[southsider2k5]

FWIW, the CFTC issued a report says that it finds no evidence of price manipulation.

 

Of course, clueless Congressmen disagree.

 

http://uk.reuters.com/article/businessIndu...036879720080711

 

Just so things are clear this is the COMMODITY FUTURES TRADING COMMISSION who came to this conclusion. Needless to say they have a little bit more knowledge of the ground situation than the Congress does.

[NorthSideSox72]

FWIW, the CFTC issued a report says that it finds no evidence of price manipulation.

 

Of course, clueless Congressmen disagree.

 

http://uk.reuters.com/article/businessIndu...036879720080711

LOL, called it.

 

[Cknolls]

Just so things are clear this is the COMMODITY FUTURES TRADING COMMISSION who came to this conclusion. Needless to say they have a little bit more knowledge of the ground situation than the Congress does.

 

 

Blasphemy!

[Balta1701]

Just so things are clear this is the COMMODITY FUTURES TRADING COMMISSION who came to this conclusion. Needless to say they have a little bit more knowledge of the ground situation than the Congress does.

Just out of curiosity/advocating for the devil/whatever...I know nothing about this organization...but it sounds like a within-industry organization. So, my question...why should I trust that they're impartial? I mean, for about 10 years there the National Association of Realtors kept saying there wasn't a housing bubble and the price expansion was perfectly normal, and yes, one could certainly argue that they knew their industry better than the Congress, but they had a clear financial interest in making sure people kept buying homes as much as they could and every time someone interviewed a member of that organization they made sure to hem to the party line on the housing market, that it would go up forever.

[NorthSideSox72]

Just out of curiosity/advocating for the devil/whatever...I know nothing about this organization...but it sounds like a within-industry organization. So, my question...why should I trust that they're impartial? I mean, for about 10 years there the National Association of Realtors kept saying there wasn't a housing bubble and the price expansion was perfectly normal, and yes, one could certainly argue that they knew their industry better than the Congress, but they had a clear financial interest in making sure people kept buying homes as much as they could and every time someone interviewed a member of that organization they made sure to hem to the party line on the housing market, that it would go up forever.

ITs not a within-industry organization. Its a federal agency, just like the SEC. But because derivatives were generally a much smaller market, people tended to know very little about the CFTC, and its big brother (SEC) got all the focus.

 

But, as the derivatives markets are actually similar in size now to equities, it gets more focus. Not from the government though - CFTC still gets treated like the ugly stepchild. Which is stupid, because the equity markets are much less complex and in need of less regulation than derivatives.

 

[Balta1701]

ITs not a within-industry organization. Its a federal agency, just like the SEC. But because derivatives were generally a much smaller market, people tended to know very little about the CFTC, and its big brother (SEC) got all the focus.

 

But, as the derivatives markets are actually similar in size now to equities, it gets more focus. Not from the government though - CFTC still gets treated like the ugly stepchild. Which is stupid, because the equity markets are much less complex and in need of less regulation than derivatives.

Interesting. Gracias.

[NorthSideSox72]

Interesting. Gracias.

cftc.gov says hello.

 

[southsider2k5]

ITs not a within-industry organization. Its a federal agency, just like the SEC. But because derivatives were generally a much smaller market, people tended to know very little about the CFTC, and its big brother (SEC) got all the focus.

 

But, as the derivatives markets are actually similar in size now to equities, it gets more focus. Not from the government though - CFTC still gets treated like the ugly stepchild. Which is stupid, because the equity markets are much less complex and in need of less regulation than derivatives.

 

Which is a part of the problem in the big picture. All of these groups are competing for budgets and attention within the government structure. There is no reason to have all of these different agencies independant of each other. This should be one organization working to complete our financial sector as one whole piece, instead of a million fragmented pieces. All of these industries and products are related in some way, shape, or form, yet there is no governmental recognition of that fact. These markets should all work together to give American's a complete overview and as simple as possible chance of managing their finances.

 

A nice comparision is what we as a country faced after 9-11 with all of the different governmental agencies that oversaw parts of securty for the American people. There was no cooperation and none of them knew what the other was doing. It hasn't been completely fixed, but they have made strides towards beginning to fix these problems.

[NorthSideSox72]

Which is a part of the problem in the big picture. All of these groups are competing for budgets and attention within the government structure. There is no reason to have all of these different agencies independant of each other. This should be one organization working to complete our financial sector as one whole piece, instead of a million fragmented pieces. All of these industries and products are related in some way, shape, or form, yet there is no governmental recognition of that fact. These markets should all work together to give American's a complete overview and as simple as possible chance of managing their finances.

 

A nice comparision is what we as a country faced after 9-11 with all of the different governmental agencies that oversaw parts of securty for the American people. There was no cooperation and none of them knew what the other was doing. It hasn't been completely fixed, but they have made strides towards beginning to fix these problems.

But, similar to the attempts to bring those law enforcement agencies together (see: Homeland Security), there are dangers in doing that too. The SEC is much bigger and more well-funded than the CFTC. Any merger of them would really be the SEC taking over the CFTC. And that would almost assuredly result in even more of a lean towards the equity world, which is the opposite direction of the markets.

 

If instead you put together a super agency over all financial regulation agencies, then you run the risk of doing what DHS has done - provide little more than more red tape. Ideally, any new oversight agency that is over SEC, CFTC, various banking-related agencies, etc., would focus on interagency cooperation, and also work towards taking in a budget and intelligently dsitributing it based on what areas really need it most. Given what happened with DHS, I think that won't go well either.

 

[southsider2k5]

But, similar to the attempts to bring those law enforcement agencies together (see: Homeland Security), there are dangers in doing that too. The SEC is much bigger and more well-funded than the CFTC. Any merger of them would really be the SEC taking over the CFTC. And that would almost assuredly result in even more of a lean towards the equity world, which is the opposite direction of the markets.

 

If instead you put together a super agency over all financial regulation agencies, then you run the risk of doing what DHS has done - provide little more than more red tape. Ideally, any new oversight agency that is over SEC, CFTC, various banking-related agencies, etc., would focus on interagency cooperation, and also work towards taking in a budget and intelligently dsitributing it based on what areas really need it most. Given what happened with DHS, I think that won't go well either.

 

Which is the biggest problem of all when you have the federal government involved. There is zero incentive to do it right. There are no consiquenses for bad actions or inaction.

[StrangeSox]

Which is the biggest problem of all when you have the federal government involved. There is zero incentive to do it right. There are no consiquenses for bad actions or inaction.

 

What are the consequences for doing it wrong in the private market these days? Those who run giant companies into the ground still make out pretty well for themselves.

[southsider2k5]

What are the consequences for doing it wrong in the private market these days? Those who run giant companies into the ground still make out pretty well for themselves.

 

Lawsuits, reduced shareprice, bankruptcy, liquidation, not working anymore...

[Texsox]

BTW, IIRC, after the last Gulf hurrican disrupted the oil and gas rigs, energy prices went through the roof.

[southsider2k5]

I'm still waiting for the headlines praising the speculators for pushing the price of crude oil down about $23 in the last week and a half, not to mention the gasoline futures down almost 60 cents, heating oil down 60 cents, and natural gas down nearly 4.000 points or about 33%!

[kapkomet]

I'm still waiting for the headlines praising the speculators for pushing the price of crude oil down about $23 in the last week and a half, not to mention the gasoline futures down almost 60 cents, heating oil down 60 cents, and natural gas down nearly 4.000 points or about 33%!

 

 

[StrangeSox]

BTW, IIRC, after the last Gulf hurrican disrupted the oil and gas rigs, energy prices went through the roof.

Lousy spectators! I hate them so much!

 

 

I'm still waiting for the headlines praising the speculators for pushing the price of crude oil down about $23 in the last week and a half, not to mention the gasoline futures down almost 60 cents, heating oil down 60 cents, and natural gas down nearly 4.000 points or about 33%!

 

Wonderful spectators!

[Texsox]

I'm still waiting for the headlines praising the speculators for pushing the price of crude oil down about $23 in the last week and a half, not to mention the gasoline futures down almost 60 cents, heating oil down 60 cents, and natural gas down nearly 4.000 points or about 33%!

 

Good news doesn't sell.

[jackie hayes]

CFTC charges Dutch firm with price manipulation activities:

 

http://www.nytimes.com/2008/07/25/business/25cftc.html

[HuskyCaucasian]

CFTC charges Dutch firm with price manipulation activities:

 

http://www.nytimes.com/2008/07/25/business/25cftc.html

When the Saudis raise their hands up and go "what the hell? this s*** is too high!" you know something "unseemly" is going on.

[jackie hayes]

When the Saudis raise their hands up and go "what the hell? this s*** is too high!" you know something "unseemly" is going on.

Yeah...cuz when the rest of the world is worrying about oil prices, the first thing the Saudis want to do is toss up fistfuls of money and yell, I'm rich, beeyatch! That would look great.

[NorthSideSox72]

CFTC charges Dutch firm with price manipulation activities:

 

http://www.nytimes.com/2008/07/25/business/25cftc.html

Note the time period - 11 days. This is a good example of what SS2K5, myself and others have been trying to point out. Markets can spazz out in the short run, and a trader or traders could (and on occasion do) sort of game the system for short term profits. But the markets adjust for that naturally.

 

Good that the CFTC is getting people like this, though.

 

[southsider2k5]

Note the time period - 11 days. This is a good example of what SS2K5, myself and others have been trying to point out. Markets can spazz out in the short run, and a trader or traders could (and on occasion do) sort of game the system for short term profits. But the markets adjust for that naturally.

 

Good that the CFTC is getting people like this, though.

 

And I have no problem with every single one of those guys going to jail for a long time. But there is a distinct difference in what is being talked about here. I would bet everything I have that there are individual traders making illegal trades to try to game the market. At the sametime there is a difference in the fact that speculation in general is responsible for the months of run up we have here. No one speculator is big enough to control the markets, except maybe the US government, or something of that size.