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Wall Street Breakfast: Must-Know News

Kelly Lieberman. High oil prices with the resulting high gasoline prices are the Republican way of redistributing wealth. More money to the rich few: oil co's, brokers, investment bankers, middle east countries, pension fund and hedge fund speculators, etc. AND taking it from the people least able to afford it, the worker. I guess you could call it a regressive tax, but it doesn't go to the govt. unless you call the huge political donations to Senators and Reps from the bankers, et. al "to the govt." I had hopes for Obama, but his flip on public financing of campaigns was a political expediency crusher. Same old s---, different horse.
Michael Levy,
Raise margin on oil contracts to 50%. Oil will drop to $70/barrel. Its immoral to keep margin here. The CFTC needs to act or be voted by Congress not to exist, which they can do. Of course, we are back to the millions that go from the bankers, et.al into the coffers of the Congress while the fast food burger server continues to get hosed at the pump. The CFTC is unlikely to act until the next administration OR the CFTC could, before Nov., raise the margin, oil drops to $70/barrel, gas to high $2's, and the McCain candidacy is saved. Karl Rove couldn't do better. Its like the swift boat ads, the Dukakis in the tank photo. Now, if Obama comes out soon with the idea of raising margin, Obama will get the credit and McCain will lose miserably. Kind of a Bush legacy result based on greed.

High Likelihood of a Market Crash

The CFTC not raising margin on oil contracts to 50% from 7%[currently] has gone from irrationality to insanity. Bodman, sec of energy under Bush, reiterated over the weekend speculation was not the cause of the high price of oil. He's either a poor liar or an idiot. Now Samuelson, sec of the treasury under Bush, says speculation is not the cause of high oil prices. He also is either a poor liar or an idiot. Actually, his firm, Goldman Sachs, benefits so much from inflated oil prices, commissions, etc., he really is "smart" for his real master, Wall Street. Witness the subcommittee findings today that futures speculation now comprises 70% of oil trades, up from 30% in 2000. Anyone ever trading commodities, me, Bunker Hunt, et.al, will tell you the CFTC can send oil to $70/ barrel by raising the margin to 25-50%. I have been noting this to the NYT, WSJ, Bill OReilly, Neil Cavuto, etc. and they are just getting around to mentioning the margin issue. Almost laughable was Karl Rove's comments about the hot button word, "liquidity". Raising the margin will reduce the number of speculators, but won't affect liquidity. There are still "puts" and "calls" to inject any liquidity for those speculators wanting to gamble. A recent analysis of China's consumption of oil revealed China's total consumption of oil was equivalent to 1-2% of our daily consumption. We have already reduced our U.S. consumption by 1-2%. So the argument that supply and demand cause the high oil prices is erroneus. Every argument by the benefactors of high oil prices, brokers, investment bankers, oil co.s, pension and hedge funds, etc. that this is where oil should be priced, based on supply and demand, can be broken down. Oil in the futures market is simply an ill-chosen runaway bull market. It could be silver or widgets. Its just paper to 70% of the traders in oil futures. Sadly, it is affecting world-wide economies, our economy and quality of life.
And the people who can do something about it, the CFTC and the Bush administration sit on their hands. RAISE THE MARGIN TO 50%! Corn, wheat, commodities dependent on energy for production will fall. Then we can focus on real problems, e.g. hunger, the World Series, etc. For me, it has become a moral/ethical issue for the Bush administration to leave this country on the brink of stagflation as he leaves office. He will leave that legacy, but then again, he doesn't seem to care.