Friday, April 4, 2008

The fuel debate heats up

It is interesting to see how in times of trouble and market worries the views of the controversial punditry bang together. At first this head-butting between the usually capital friendly Washington hacks and Wall Street punditry amuses. The aggressive attitude of Wall Street capitalism is lauded and welcomed when viewed through rosy glasses but when reality prevails the finger pointing begins. Short sellers and rumor spreading hedge funds are the sole source for the malaise in the markets so they say. When German authorities warned of a need to regulate the industry it was vehemently denied and voted down. For years people familiar with the matter were concerned with record breaking energy prices and their effects these prices will have on the average Joe. Now Washington hacks again point to speculators as the evil doers. One gets dizzy and is in danger of throwing up by looking at the speed of the spins in Washington that are tailored to the most recent Fox news poll.

Cota, president of the New England Fuel Institute and co-owner of a family-owned home-oil company in Vermont, said, “American consumers are forced to ride this same speculative rollercoaster as the energy trader.” He supports a bill from Rep. John Larson (D-Conn.) that would widen the regulatory framework and make it harder for speculators to participate in the energy market. After his Senate testimony, Cota will appear on Thursday's edition of "Closing Bell" with Maria Bartiromo, where he'll butt heads with Red Cavaney, president of the American Petroleum Institute, who offers the free-market counter-point argument. “Under the current system, the Nymex gets products to consumers reliably,” said Cavaney. Referring to the central element in Larson’s plan, Cavaney added, “If you eliminate non-commercial accounts, you get rid of liquidity, and in a tight market, you might not have capacity” to meet demand.
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source: Should U.S. Crack Down on Fuel Speculators?

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