Is Congress helping to restrain insane energy speculation?

Consumeraffairs.com features an interesting headline, "Did Wall Street Wreck The Economy?". The first part focused on the obvious subprime debacle, but I was interested in the second part referring to an initiative in Congress to break down on excessive speculation in energy markets. The recently passed ominous farm bill, vetoed by the Bush administration, contains a little publicized provision (we have reported in a prior post) that is allowing federal regulators to have more oversight and control over oil futures trades. Rep. John Larson, a democrat from CT, recently spoke with the NYT about his plan to propose legislation that would essentially ban over-the-counter trading of energy futures by traders who don’t plan to take physical delivery of the commodity. While this bill has little chance of passing it still represents the current mood about sky high energy prices among policymakers in Washington.

But this time, it’s Wall Street and the newly public commodity exchanges that are sharing the Congressional spotlight. Senate Democrats have already proposed legislation that would impose stiffer margin requirements on energy trading. Senator Jeff Bingaman, chairman of the Senate Energy and Natural Resources Committee, wants to tighten oversight of energy trading that takes place over the counter or outside of exchanges like the Nymex, which is regulated by the Commodity Futures Trading Commission.

“But there is a widespread feeling amongst the leadership in Congress and the rank and file that something has got to be done in this area,” Larson says. “And this situation requires bold action.”

Let's hope this is not just election talk and we get some real results that help to restrain insane energy speculation.



source: Energy Speculators Draw the Heat
By NELSON D. SCHWARTZ, NYT, May 25, 2008
http://www.nytimes.com/2008/05/25/business/25maker.html?_r=1&scp=3&sq=Larson&st=nyt&oref=slogin

source: Did Wall Street Wreck The Economy? Congress, regulators start to connect the dots
By Mark Huffman, ConsumerAffairs.com, May 29, 2008
http://www.consumeraffairs.com/news04/2008/05/wall_street.html

read also: CFTC Announces Multiple Energy Market Initiatives
Thursday, May 29, 2008
http://manonthestreet64.blogspot.com/2008/05/cftc-announces-multiple-energy-market.html

read also: The hunt is on - speculators beware!
Wednesday, May 21, 2008
http://manonthestreet64.blogspot.com/2008/05/hunt-is-on-speculators-beware.html