Friday, August 15, 2008

Speculators=Vampires II

Has anyone noticed that the price of gas has dropped for 24 consecutive days? I’m sure you have as there has been a drop of 15 cents over the last two weeks. Strange, Congress takes a vacation from doing squat all season and oil prices drop rather nicely. Hmm, maybe it’s just a coincidence.

But what of the conspiracy theories regarding speculators brought forth by progressives and liberal Democrats? Where are these capitalist vampires and why in the world would they let oil prices drop when there are riches to be had? Heck now is a good time to stick it to consumers since Congress is out of town. Why not ratchet the price up ever higher? Who is going to stop you, right? After all, the Enron Loophole is still in place and so are all the laws that sneaky Phil Gramm passed back in 2000 which, according to over active imaginations or political spinsters, are the mechanisms used by speculators to push crude oil prices higher and higher.

But, dear reader, as we have witnessed over the last couple of weeks, the laws of supply and demand, a strengthening dollar, and slowing economies in Europe and the U.S., have proved the conspiracy theorists wrong. What a surprise!

By the way, the U.S. Commodities Futures Trading Commission released the results of its interim investigation into any fraud, wrongdoing, or market manipulation on 07/22/08. And the conclusions of the interim report, “found that fundamental supply and demand factors provide the best explanation for the recent crude oil price increases.” Imagine that.

However, we shouldn’t be surprised if oil prices spike up again due to an unexpected world event (or if the dollar starts to sink again) and that complaints from the Left begin again in earnest. Quite frankly, I would actually be OK if the Enron Loophole were closed. Then, when prices do go up again, we won’t have to hear all the ludicrous theories on how capitalism doesn’t work, more regulation is needed, and how speculators are all making a mint as they tool the market.

1 comment:

Jeff Perren said...

Speculator. Another word for... risk taker!

"Heaven forbid we should allow someone to make a profit (by exercising ingenuity based on a costly education and hard won experience) from guessing correctly about the future direction of commodity prices.

I mean, they didn't earn it surely, and if they didn't by golly the law just better step in and protect those little flowers they are trading with from getting crushed."

The preceding fantasy was brought to you by someone who actually worked in the bond markets on Wall Street, using linear programming to develop algorithms to do just that.

I confess. I'm the guilty party.