As long as we are on the topic:
Senate witness today described the chairman of the U.S. Commodity Futures
Trading Commission (CFTC), which is allowing U.S. oil futures market
speculation to be "regulated" by British and Dubai, instead of American,
authorities. In a hearing on manipulation of the skyrocketing oil price, the
expert witness, University of Maryland law professor Michael Greenberger,
told seven angry members of the Senate Commerce Committee that 35% of
U.S.-based trading in West Texas Intermediate Crude oil futures has shifted
to "dark markets," completely unregulated, by agreement with Britain. On
these markets in particular, Greenberger said, a few hedge funds and three
investment houses--Goldman Sachs, Morgan Stanley, and JP Morgan Chase--are
controlling 70% of the speculative buying of U.S. oil futures and driving
the price of oil steadily upward, while "ironically, issuing `predictions'
that it's going to $200/barrel." This London-Wall Street speculative
manipulation of oil and energy prices, with the knowing wink of the CFTC and
its chairmanWalter Lukken, was also targetted by Consumer Federation of
America witness Dr. Mark Cooper, and by the Senators themselves, as "the
London Loophole" accounting for anywhere from 35-50% of the current price of
a barrel of crude oil. Cooper told the Senators, "Roll up your sleeves,
assert the national authority of the United States, and regulate these
markets." On May 25, Sen. Maria Cantwell and 22 other Senators had released
a letter to the CFTC demanding that the "London Loophole" be closed. Lukken
had responded on May 29 promising action "by Fall." That exchange alone was
enough, said Greenberger, to brake the dizzying oil price rise at about
$135-going-on-$200, and pull it back down to around $125/barrel. Senator
Cantwell said after today's hearing, "Now there will be a lot more signers;
and I believe CFTC will take the action required by the economy, and by the
morality of the American people, now." If not, she believes the Senate will
legislate to force CFTC's hand. Greenberger and Cooper laid out in detail,
how 35% of West Texas crude futures are traded on a market headquartered in
Atlanta, Georgia--the Intercontinental Commodity Exchange, or ICE--which by
CFTC staff actions, is juridically a London offshore market overseen only by
the British Financial Services Authority! And oil futures trading on the New
York Mercantile Exchange (NYMEX) is now "regulated" only by the
London-controlled financial authority of Dubai, under another CFTC staff
agreement. On what are effectively British offshore markets, Greenberger
said, the above-cited banks and hedge funds are simply "continuing and
repeating the `subprime' crash of the securities markets, and all their
derivatives, on the commodities markets." Adding a sobering note, Gerry Ramm
of the Petroleum Marketers Association of America told the Committee that
gasoline/diesel/propane dealers all over the country were facing bankruptcy
and would start closing their stations, because "we can't get the credit to
buy our receivables" which have doubled in price.
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