Stop Oil Speculation Now!

[Marine1]

Opinion: Senators Chuck Schumer and Harry Reid are pushing legislation to restore the controls over the oil future's market speculation that existed before brokerage houses like Goldman Sachs and Morgan Stanley set up a commodities exchange in London to evade restrictions imposed by the Federal Commodities Trading Corporation.

FOXNews.com - Stop Oil Speculation Now! - Opinion

[SwedeSteve]

Get on board and stop speculation. It will work.

"But to those who doubt the efficacy of off shore drilling, just look at how the mere threat to move in that direction sent oil prices crashing. We need more of same." Getting off our butts and actually doing something has OPEC scared.

[Big Dog]

Wow! Hard to believe it..... I actually found something to agree with two of the top UberLiberals in the nation!
The Oil Speculators are the greatest ill befalling the oil industry. It should be treated like any other product - set a fair price across the board, and keep it there!

[nathangdad]

now you have an entanglement of various nations with differing goals
and each of them have some sort of soverignty. Poorer nations with oil love the speculation, Russia loves the speculation, Iran loves the specuation, and so on and on and on.

OPEC could set up their own trading market in Dubai or anywhere they are powerful.

Sadly, the time to prevent this mess we have now has passed and it may not be possible to put the cat back in the bag (so to speak).
They should have put the hammer down before the big investment houses got started and I wish they would have done so.

[TXplt]

The best way to stop preditory oil speculation is to threaten supply increase by opening drilling throughout the U.S., as well as building new electric power supplies and energy sources that are economically viable and pay for themselves (coal, nuclear, wind, hydro). This addresses the core issue. More laws and words don't.

You'll have to excuse me if I really don't trust mr. s. and mr. r to come up with anything that's useful or that works. Mr. s. was the demagogue blaming "big oil" for our plight (as well as being an extreme anti-gun gun grabber--tell me how someone with this sense of perspective can do anything useful for the U. S.). Legislation won't put fuel in our tanks; getting rid of it (i.e. allowing supplies to be explored and easing wacky environ rules) will. Aren't these the folks who were trying to sue opec ?!!! THAT'LL work..........

I'm all for the U.S. markets requiring cash on hand to trade (i.e. keeping the ability to buy futures on margin or with cash that doesn't exist yet in check). Excessive buying on margin and inflated stock/commodity prices was a significant factor in the crash of 1929. However, this has little to do with the price of oil futures worldwide.

Did it ever occur to these "gentlemen" that those investing in oil futures, if we choose to overregulate them in the U.S., can just go over to another sandbox in another country and play there ? A global market always finds ways around the silly laws of an individual nation. Look at how black markets develop. Economics and global markets scoff at regulation. Futures could be traded in Asia, the middle east, Australia, Europe, Tahiti.........anywhere. If we decided to fix prices, we'd only decrease supply here and would eventually start getting our oil traded thru middlemen. Since these middlemen get a cut, oil prices would actually increase in the U.S. while supply would drop (much like the gas lines of the 70's). Our economy would take even more of a hit, because only our financial firms would have to play by the new rules--those based in China could do as they pleased. Moreover, anyone based offshore could cheat with impunity--this is how much of the oil would get filtered back to us anyhow--at an increased price.

Maybe someone alot smarter than me can explain how putting even more oil out of our reach is going to help get us cheaper gas ?

[Windwalker]

+1 Txplt. I don't trust them either. How they and Nancy are able to keep getting reelected is one of life's great mystery's.

[troy2000]

If liberal Democrats hanged themselves from lamp posts in front of the Capitol Building, some of you would complain that they used the wrong rope.

Personally, I think some of our trouble with oil speculation, and much of our housing market and mortgage industry problems, can be traced directly to the Bush administration's reluctance to conduct any oversight of private business, and their failure to enforce regulations already on the books.

[TXplt]

^ Uh oh.....

I disagree, at least on the part of it being desirable for oversight of private businesses in general by government. Oversight and rules often cause our problems and economic inefficiencies, and make things worse.

I think you would certainly have trouble defending the actions of Nancy, Dianne, and Chuck.

[samuel]

Originally Posted by troy2000

If liberal Democrats hanged themselves from lamp posts in front of the Capitol Building, some of you would complain that they used the wrong rope.

Personally, I think some of our trouble with oil speculation, and much of our housing market and mortgage industry problems, can be traced directly to the Bush administration's reluctance to conduct any oversight of private business, and their failure to enforce regulations already on the books.

Stop oil speculation!Stop free trade!Put gov.in charge of everything.Subsidize!More big gov.,then we can go the way of comunism.Some how I fear government control much,much more than high prices! sam.

[TXplt]

As far as the mortgage problems, if you have 14 disclosure forms you might as well have 1400. Most of us have closed on a house or loan at some point--how many thousands of words did you wade through ? Maybe after the second page they began to run together and lose meaning ? I can see there being a requirement (to eliminate asymmetric information) that a lender present the terms of the loan clearly and plainly, in a format that the average joe would understand. Aside from that, capital markets need sink or swim on their own. If we force banks to lend to people they don't want to (as a government), or bail them out when they make bad loans this screws up capital markets. The key to banks lending money is to be able to manage risk via interest rates and security. When we bail them out when they screw this up or blow money into the economy, this causes bad things to happen. Credit functions best with no safety nets. If lenders get stiffed and lose, they go back to being the banks in black and white movies -- hard nosed and extending loans only to those with a chance of paying it back. The supply side of this eliminates the tempting supply of consumer credit -- as people default on their credit cards, the banks get stiffed and are more careful next time. There's no incentive to be more careful if gov't bails them out. Likewise, people aren't tempted to get into debt they can't pay back because the supply of $ isn't there.

I'll concede that it is a threat that predatory lenders could come in from another country and set up a scheme by which they collude to lend and foreclose, and thus buy up land in America on the cheap. Safeguards against this could be warranted.

You can't blame Bush at all for the housing/credit crunch. If anything, I'd assert that government (via social engineering schemes championed by Bush opponents) might have asked banks to make loans they otherwise might not have, skewing the risk/interest curve. I'll also concede that the Fed's actions (again, they're a private company, no more federal than fedex) by not allowing banks to fail (i.e. printing paper and not hiking interest rates) has some very serious long term consequences--I understand what they did and why, but don't agree. We need (and needed) higher interest rates, not lower.

[Seabeescotty]

LOts of interesting views here, but I would like to see a stop to folks getting rich off us who can't get gas from a different source. It looks kinda like the problem we've had, with monopolies, and trusts. We do have laws against those.

[TXplt]

I agree, Scotty--cartels like OPEC are very much a form of monopoly. The problem is we can't (without taking them over) very easily extend our laws to other countries. We have to use tools at our disposal which will work--potentially we can impose sanctions, restrictions on trade with assets held in the U.S., or jack up the price of goods we sell to them that they need. The difficulty with this is that markets usually find a way around this via middlemen, lawyers, and/or black markets. Tariffs and Sanctions often come right back at us (like taxing a corporation) in the form of lower supply/increased price.

One thing that always breaks up a monopoly is competition. I believe, if we threaten energy oversupply thru good old American engineering and exploration, we'll see oil prices tumble.

[ArkansasHunter]

If anyone here have read my Posts recently about Oil prices, I fortold that crude oil would come down when it was annouced that the ban has been lifted to where drilling can happen off shore now. The dollar being devalued has'nt helped matters either and the last time I checked it was riseing in value.

All the Talk is positive now such as what's going on in Iraq. A reduction and pull out of American troops is on the Horizon.
Need I also mention the voices of the American people have been heard in Washington D.C. pertaining to fuel price's.
We need to keep the ball rolling inregards to alternative fuels.
Yesterday lite sweet crude oil, which is the best grade closed at $127.24 a barrel.
Thats about $20.00 drop in the past 3 weeks at that rate maybe we can stop buying ground beef and start buying ground chuck again LOL

[troy2000]

The home mortgage industry has been knee-deep in fraudulent lending practices for several years, and that's one of the things that led directly to the meltdown. Lenders were pushing thorough loans they knew were based on false information, such as false unverified income and improper or falsified comps, then dumping the resulting shaky loans on the market before they fell apart.

At the other end, they were misrepresenting their loans to naive customers, telling them one thing verbally and writing another, falsely assuring them there would be no trouble refinancing when balloon payments came due or the special teaser rates ran out, etc. Don't tell me the regulators were doing their jobs, and don't tell me they shouldn't have been doing anything.

Here's the short version of the Center for Responsible Lending's report on Indymac Bankcor, issued right before it went belly-up and was finally siezed.

Indymac: What Went Wrong?

CRL has uncovered substantial evidence that IndyMac Bank engaged in unsound and abusive lending during the mortgage boom, routinely making loans without regard to borrowers’ ability to repay.

CRL interviews with former employees and lawsuits in 10 states indicate that IndyMac:

pushed through loans based on bogus appraisals and income data that exaggerated borrowers’ finances,
worked hand-in-hand with mortgage brokers who misled borrowers about their rates and other loan terms and stuck them with unwarranted fees, and treated many elderly and minority consumers unfairly.

In interviews and court documents, 19 former employees describe an atmosphere where the hunger to close loans ruled.

In one case cited as an example, they lent to an elderly man with dementia so bad he could barely sign his name. In another, they misrepresented an almost illiterate constructionworker as a college graduate, on the way to sticking him with an interest rate so high he couldn't possibly afford it. Both these loans were in the bundles re-sold to investors on the open market, thereby screwing them too.

I firmly believe it is the government's job to stop that sort of behavior, instead of just waiting until an institution collapses on its own

[Deersniper]

If we would just not turn on the TV, that would help.

[TXplt]

How many of the folks signed that little contract that depicted the terms of the loan in no uncertain terms ? -- there's two to tango here. I've borrowed money on many occasions, always read the contract, and never had the contract say something different from the lender, when it came to the specifics of the loan--and it is painful to read. If we throw a bunch of more rules in it'll get only worse. If your argument is for a concise statement of the terms of the loan that are understandable, I agree. If you can verify a lender stated different terms than was signed in the contract (which always should have been read anyway), then, yes, that's fraud and not legal. I have sincere doubts that this occurred frequently--I do believe there was alot of wishful thinking. Also, someone had to buy the "shaky" loans (and I seriously doubt they had no knowledge of the terms of the loans)--how about we don't bail them out ? If lenders don't verify income and assets, guess what--their mortgage company loses money when they make bad loans and suffers the consequences--just like a poorly managed industry. I'll not shed a tear if these companies go bankrupt and gov't shouldn't be using any of my money to save them.

Regulation doesn't fix this, Troy. If you told me I could afford a $1M house as a lender I'd concede that I could, but wouldn't want to--it's a very basic premise of finance that the cheapest money is your own and you should never borrow more than you can pay back. Ever. If you are naive enough to believe different, well, you've just learned an expensive lesson--investing in booming real estate is no different than throwing your money into any other investment with risk--industry, oil, gold, platinum, horses. I don't believe false assurances from lenders, car dealers, investment advisors, infomercials, or realtors. Again, this is common sense and part of the lessons of life. I certainly consider a company that is 9 Trillion dollars in debt ill advised to give me financial advice or to attempt to write regulations to fix this.

[zseese]

+1^TXplt

If the government should do anything, it should provide better financial education in school so people grow up with enough sense to not put themselves in these situations(I know it should be up to parents, but they won't do it.), but definately not try to regulate the business. To much government in business as is.

[nathangdad]

The financial sector was allowed to go wild with mortgages often for no other reason that they decided it was o.k. because even if the person defaulted the rising price of the home would cover the mortgage firm.
Also, financial houses were allowed to bundle up these mortgages and present them to investors as viable investments thus making phenominal profits on both ends of the transaction.

Historically, what happened was the end of the time proven local Savings and Loan as the keeper of the mortgage industry.

The deregulation of the mortgage industry was a disaster of the first magnitude. It should have stayed regulated as it was for decades after the great depression. Deregulation of certain industries should have never been allowed to happen.

[soonerborn]

Originally Posted by troy2000

Personally, I think some of our trouble with oil speculation, and much of our housing market and mortgage industry problems, can be traced directly to the Bush administration's reluctance to conduct any oversight of private business, and their failure to enforce regulations already on the books.

Actually government oversight of private business has INCREASED under the Bush Administration, if you would recall it was Clintons relaxing of regulation that precipitated some spectacular crashes. PBS Frontline did an episode on this and laid the blame squarely at the feet of Bill Clinton and you can hardly accuse Frontline of being a right-wing propaganda machine. Bush had no choice but to increase it after the Enron scandal.

I am not saying Bush is a savior and Clinton the devil but if you want to start tossing blame around lets get to the truth of the matter and put it where it belongs and thats on Bill Clinton and the 2000 congress.

The current speculation on energy was created by the changes in the Commodity Futures Modernization Act of 2000. This while surely had to have republican and democratic support to pass congress was signed into law by Clinton not Bush. This mess was started before the guy got into office and yet people still blame him for it.

For sure there needs to be more oversight on commodity speculation but speculators arent really to blame for our current gas price. Sure they have helped jack it up but they are only responding to information that effects the future availability of what they are speculating on. Thats the whole idea behind speculating. If Pelosi hadnt buried that drilling bill and just a few top congressmen would publicly call for opening up more drilling, the drop started by Bush's repealing the executive order banning offshore drilling would have turned into a free fall pushing oil prices down much farther. Possibly even down close to what it should actually cost. Sorry for the extreme run-on sentence. lol.

[soonerborn]

As far as the home mortgage thing goes. It is my responsibility to know what I can afford and what I cant, its my responsibility to read the small print and make sure I know what I am getting into when I borrow money. It is not my responsibility to be responsible for people who are irresponsible and pick up their tab for them when they rush out and buy a house that is 4 or 5 times their annual salary and pay interest only on the note.

Should government step hard on banks that make fraudulent claims and clearly mislead borrowers? Absolutely. Do I want the government involved at any level in deciding what I can afford to borrow or not? Absolutely not!

People that took advantage of these easy interest only arent / ARM loans arent victims, they are idiots. Idiots that should pay their own way out of the self inflicted pit of stupidity they have dug themselves into.

Banks that took advantage of these idiots arent victims either. They, like any business, should pay for the mistakes they make. Let them fail, there are plenty of good banks waiting to take their business, banks that made good decisions on who loan how much money to.

If you dont let people and business fail then you only show responsible people and business that there are no consequences for being stupid and soon everyone will be stupid. Then whos gonna bail us out when we are all stupid?