iamhotep
29.10.08, 09:26
www.motherjones.com/news/feature/2008/09/exit-strategy-how-to-burn-the-speculators.html
Why is the price of oil so high? Because the Bush administration did
to the commodities market what it did to housing.
But thanks to Phil "nation of whiners" Gramm—the former Texas
senator who was until recently John McCain's top economic adviser
(see "Foreclosure Phil")—futures market regulation went to hell.
Under the "Enron loophole" pushed through by Gramm in 2000, energy
futures were allowed to escape all federal and state regulation.
Gramm embedded that loophole in a surprise 262-page rider, drafted
at the behest of Wall Street and Enron, in an 11,000-page
appropriations bill on a Friday evening two days after the Supreme
Court handed down its Bush v. Gore ruling and as Congress was
rushing home for Christmas. In a separate bit of absurdity, in
January 2006, the Intercontinental Exchange (ice) of Atlanta, which
trades benchmark US oil futures (West Texas Intermediate or wti),
came to be treated by the cftc as a British market (the "London
loophole") so that US regulators do not even track what is going on.
(Even more surreal, the cftc was going to allow trades of US oil
futures on terminals located in America to be "regulated" in Dubai;
political pressure put an end to that idea in July.)