Leaked Oil Trading Docs Underscore Role of Speculators in Oil Price Spikes; Trader Identities should

[Bill USA]

be public information - PublicCitizen


http://www.citizen.org/pressroom/pressroomredirect.cfm?ID=3402

Note: The Wall Street Journal this week ran a story about confidential documents from the Commodity Futures Trading Commission that named traders who held oil futures in 2008, when oil prices spiked to record highs.

The growing controversy over the leaking of trading documents naming 219 investors in oil futures positions during the 2008 oil price spike shows two things.

First, the data reveals that excessive speculation by banks and others is the driving force in oil markets, pushing prices beyond the supply-demand fundamentals. Who wins when prices rise? Wall Street traders that are engaged in speculating. Who loses? Every consumer who fills up at the pump.

Second, this data shows that we need this information to be made public on a regular basis. The companies named – including Goldman Sachs and Morgan Stanley – were significant players in the 2008 price run-up. The public should know who is responsible for high gas prices. It should get this information not just now, three years later, but on a regular basis, within two weeks.
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... and guess what law facilitated speculation in commodities completely unregulated by any agency ...http://www.huffingtonpost.com/jim-moore/a-nation-of-village-idiot_b_127340.html">The Commodities Futures Modernization Act ... yes, http://motherjones.com/politics/2008/05/foreclosure-phil">Phil Gramm's Nightmare (for America) which played a key role in creating the TRICKLE DOWN - DEREGULATION Disaster of 2008. (It was the legalized trading in Credit Default Swaps (CDS) that made Bundled Sub-Prime Mortgages much more marketable. Banks sold the big investors (e.g. pension funds, mutual funds) higher rate (and higher risk) Collateralized Debt Obligations (CDOs) by selling them CDSs which were supposed to protect the investor from loss of his principal (in case of default on the mortgages). What the investors thought they were getting was higher returns at no additional risk to their investment. Naturally, demand for higher return mortgages (sub-Prime) exploded and Wall Street wanted all the sub-Prime mortgages the Predatory Lenders could flip their way (and which ratings agencies were paid to rate 'AAA').

The CFMA ALSO ... enabled banks to buy commodities futures contracts for clients using Credit Default Swaps - completely unregulated. No public agency even knew who was buying certain commodities (only the bank would be identified as the buyer) or if any one or group of buyers were controlling the market (making a significant proportion of the trades). This visibility is necessary to preclude one or a group of entities from manipulating the market in one or a group of commodities.

[pwb]

1. I'll take a guess, The Koch brothers.