Skip to main content

View Diary: Sen. Sanders blasts "completely unacceptable" new rule to regulate oil speculators (70 comments)

Comment Preferences

  •  Speculation, price of fuel/food; Obama's FY 2011 (8+ / 0-)

    budget cut proposal in heating assistance

    Speculation's effect on oil/gas/food prices

    A new report by Better Markets, a nonprofit group advocating constraints on speculative trading, blames Wall Street for inflating prices at the gas pump and the grocery store.

    The study centered on commodity index funds, investments tied to the value of oil, wheat and other commodity futures contracts. The funds, according to the Better Markets review of more than 25 years in data, have historically caused an uptick in futures market prices as they periodically exit expiring contracts and roll into a new batch of deals.

    “The data shows the trading those funds do every month has severely disrupted and dramatically changed those markets, causing food and fuel prices to increase, hedging costs for businesses to rise, and prices to swing erratically up and down, which also raises everyone’s costs,” Dennis Kelleher, president and C.E.O. of Better Markets, said in a statement.

    In spite of the dramatic rise in fuel costs, the Obama administration's FY 2011 budget proposed cuts in heating assistance of $2.5 billion.

    Heating cuts for the poor

    Citing a need for stricter belt-tightening, President Obama has said he wants to slash almost $2.5 billion from a program that helps low-income families pay their energy bills. The White House says lower oil prices mean funding can be reduced without leaving Americans too far in the cold. But whether that's actually the case is an open question.[...]
    The administration has defended its proposal -- which would bring the program's current $5.1 billion budget down to pre-2008 levels -- by claiming that fuel prices simply aren't as high as they were three years ago.
    •  Stirling Newberry pointed to this new study (7+ / 0-)

      The Food Crises: A quantitative model of food prices including speculators and ethanol conversion, by Marco Lagi, Yavni Bar-Yam, Karla Z. Bertrand, Yaneer Bar-Yam. The abstract states:

      Recent increases in basic food prices are severely impacting vulnerable populations worldwide. Proposed causes such as shortages of grain due to adverse weather, increasing meat consumption in China and India, conversion of corn to ethanol in the US, and investor speculation on commodity markets lead to widely differing implications for policy. A lack of clarity about which factors are responsible reinforces policy inaction. Here, for the first time, we construct a dynamic model that quantitatively agrees with food prices. The results show that the dominant causes of price increases are investor speculation and ethanol conversion.

      A conservative is a scab for the oligarchy.

      by NBBooks on Tue Oct 18, 2011 at 08:39:33 AM PDT

      [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site