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WARNING: Senate Democrats look to end U.S. trading

Posted: Tue May 13, 2008 2:38 pm
by RedRock
Democrats: Close speculation loophole
Senate Democrats look to end U.S. electronic oil trading in foreign exchanges to reduce the speculative inflation of oil prices.

By David Goldman, staff writer
Last Updated: May 8, 2008: 12:00 PM EDT

NEW YORK ( -- Democratic Senators are working to combat rising oil and fuel prices by attacking what many Americans see as the heart of the problem: speculative trading.

Many politicians and energy industry analysts blame oil speculators for cashing in on the fuel cost crisis and, in the process, boosting the price of oil. Hedge funds, trusts, and independent investors have also poured funds into crude oil as a hedge against the weakened dollar.

"A major contributor [to high oil prices] is the rise in speculation," said Sen. Carl Levin, D-Mich, who estimated that speculation has added about $35 to a barrel of oil. "This is not a supply and demand issue."

Levin said the solution can be found in closing the loopholes that allow electronic traders to buy oil outside of the United States. Levin noted that the "Enron loophole" will be ended if President Bush signs legislation that Congress passed as part of the proposed Farm Bill.

The "Enron loophole" was codified in the Commodity Futures Modernization Act of 2000, allowing oil futures to be traded electronically in unregulated markets outside of the jurisdiction of the Commodities Futures Trading Commission.

But Levin also said he is introducing a bill, calling for an end to all electronic loopholes, including the buying of oil electronically in regulated markets like the commodities exchange in London.

"[U.S.] computer terminals will be governed by U.S. regulation, because the computer terminal is located in the United States," Levin noted.

By making global speculative trading more difficult for investors, Levin and other Senate Democrats believe the artificial inflation of the price of oil will eventually fizzle.

full story: ... 2008050812


Posted: Tue May 13, 2008 4:21 pm
by Kobeyashi
I concur... :shock:

Posted: Wed May 14, 2008 8:34 am
by jungle
Thanks for posting the story. Perhaps the US should just ban speculators from selling stocks, and from buying oil... ; )

Write to Senator Levin and let him know your thoughts!!

Posted: Wed May 14, 2008 12:16 pm
by RedRock
Contact Senator Levin:

Here's my note...
Senator Levin,

As an american capitalist, I remind you of the historic significant place that free markets have had in our country. Freely traded markets are the very heart and soul of a capitalistic society. I read you are proposing rules to prevent Americans from freely trading various markets including petroleum products. I say, in the face of any "expert" commentary to the contrary, That freely traded markets are essential to an orderly economy. It has been demonstrated again and again that speculators provide liquidity to end users by their trading activity. Thus easing price disruptions and assisting to maintain a free and orderly place of business for all users and ultimately, end use consumers. Going back to the times before freely traded commodity markets, you would discover chaos, irregularities, and inefficiencies becoming a communist regime. Please do not turn back the hands of time to the place when monopolies controlled the price we pay. I urge you to concentrate your time in office on serving the public well by building roads, modernizing infrastructure, and providing for our defense from invaders. This is the extent of your responsibility in office. The markets have and will continue to do the rest in the most efficient and effective manor ever devised by humankind on earth. Should logic fail your facilities, I remind you that money is like water and if you ban trading in the US, this money will flow out of the country to do business as usual. However, many jobs will be lost as a consequence and a serious black mark given to our standing as a free people in a free nation. Must I leave my country to have my freedoms?

Posted: Wed May 14, 2008 5:23 pm
by 7432
Levin is just being paid off by the CME Group to send a shot across the bow of ICE.
Join the CME Group or lose US hedge fund business.
you have to read the last line in the voice of darth vader.

Posted: Thu May 15, 2008 4:13 pm
by RedRock
They passed it. Clipped from bloomberg

The House approved the bill governing electronic trading yesterday by a veto-proof majority. The measure is part of a farm bill. The legislation gives the Commodity Futures Trading Commission authority to regulate contract trades that either have a large volume, are used to help determine prices or are linked to a regulated contract.

It also requires an audit trail and record-keeping for electronic exchanges, imposes limits on speculation, calls for market monitoring and increases penalties the commission can levy to $1 million.

Intercontinental Exchange

Posted: Thu May 15, 2008 7:36 pm
by 7432
my note to levin let him know that based on his brilliant informed opinion of the commodity markets I have shorted nymex crude and ipe brent crude and I expect a quick $35 profit.
I also shorted ICE stock and expect to make a killing.

and that I would send him the appropriate kickbacks when the money starts rolling in.
be sure to address him as Comrade Senator Levin.