Wednesday, May 21, 2008

The hunt is on - speculators beware!

On Wednesday the House voted to override a Presidential veto on a $300 billion farm bill. The Senate is scheduled for a vote on Thursday. It is widely believed that there are enough votes for the bill to be written into law. It would be the second override of 10 vetoes by Bush.

Hidden in the bill is a very important passage that reauthorizes the CFTC to extend its regulatory oversight over electronic trading in energy futures.

The plan also lowers taxes for companies including Weyerhaeuser Co., North America's largest timber producer, and reauthorizes the Commodity Futures Trading Commission, ending the so-called "Enron loophole'' by extending regulatory power over electronic trading on energy markets.

Another bill introduced on May 7 by Senate Majority Leader Harry Reid and other Senate colleagues aims at the same target. The Consumer First Energy Act of 2008 focuses on the main causes behind the recent record-high gas prices.

If passed, the legislation would impose windfall profit taxes on oil companies, eliminate tax breaks for oil and gas companies and suspend shipments to the strategic petroleum reserve.

It would also limit speculation in oil futures and give the government the power to prosecute price gougers.

read also: Consumers first - oil futures later

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