CFTC

Groundhog Day as Obama "Probes" Oil Speculation

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We have another non-action action by the Obama administration, this time in the form of a probe on oil speculation:

Obama said he’s asked his attorney general and U.S. government agencies to work with state attorneys general to monitor for gasoline-price gouging, “to make sure that nobody is taking advantage of working families at the pump.”

Obama also said he’s willing to tap into the U.S. Strategic Petroleum Reserve “should the situation demand it” but declined to answer a question of what price would trigger a release.

Earlier France proclaimed oil speculation is unacceptable and Senator Nelson (D-FL), is calling for a hearing as well as a Congressional coalition on derivatives and oil speculation.

This is like 2008 Ground Hog Day. Back then we also had congressional testimony on oil speculation as well as bills introduced in Congress.

But then the financial crisis and recession happened, global oil demand collapsed, yet derivatives were never addressed. There is supposedly the ability for the CFTC to act, yet....this regulatory agency never does.

A portion of Senator Nelson's letter to the CFTC:

Another Major Ripoff, Another Slap on the Wrist Fine - Countrywide Settles for $108 million

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It's no wonder we get fraud, abuse of customers, ripoffs as standard fare by corporations.

Countrywide agrees to pay a $108 million fine for excessive fees on home loans, one of the biggest fines by the FTC.

When homeowners fell behind on their payments and were in default on their loans, Countrywide ordered property inspections, lawn mowing, and other services meant to protect the lender’s interest in the property, according to the FTC complaint. But rather than simply hire third-party vendors to perform the services, Countrywide created subsidiaries to hire the vendors. The subsidiaries marked up the price of the services charged by the vendors – often by 100% or more – and Countrywide then charged the homeowners the marked-up fees. The complaint alleges that the company’s strategy was to increase profits from default-related service fees in bad economic times. As a result, even as the mortgage market collapsed and more homeowners fell into delinquency, Countrywide earned substantial profits by funneling default-related services through subsidiaries that it created solely to generate revenue.

Countrywide is now owned by Bank of America. In 2008, Countrywide held a mortgage portfolio valued at $1.4 trillion.

Countrywide even tried to skirt bankruptcy law and make broke homeowners, now out of a house, pay even more fees after the fact.

CFTC to curb oil speculators

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The Commodity Futures Trading Commission is proposing a new rule to limit energy speculation.

(everyone applaud)

The proposed caps announced on Thursday will have limited market impact affecting only a small handful of traders – about 10, by the CFTC’s own estimates – on crude oil, natural gas, gasoline and heating oil markets. The new limits are largely higher than the so-called “accountability levels” set by exchanges and which, if exceeded, trigger heightened surveillance.

Here is the actual proposed position limits rule where comments can be received up to 90 days.

This is the basics of the proposed rule:

CFTC Alleges Dutch Trading Firm Manipulated Energy Market

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CFTC Alleges Dutch Trading Firm Manipulated Nymex Energy Market

The U.S. Commodity Futures Trading Commission, under pressure from Congress to police markets in the wake of record energy prices, accused Optiver Holding BV of manipulating U.S. energy markets.

The allegations against the Amsterdam-based hedge fund come as the Senate prepares to vote as early as tomorrow on legislation to curb speculation in energy markets and expand the commission's authority and staffing.

``Congress is looking for someone to blame,'' said Kevin Book, senior vice president for Friedman, Billings, Ramsey & Co. Inc. in Arlington, Virginia. ``The CFTC is trying to make sure it's not them.'