Sen. Maria Cantwell, Democrat (of course) of Washington was just on CNN talking about news that the Commodity Futures Trading Commission is investigating trading practices for crude oil in unregulated and under-regulated markets.
No transcript available yet, but Sen. Cantwell charged that trading practices used at Enron to manipulate the cost of energy in California and elsewhere have "moved on" to other commodities markets, including that for crude oil.
Some commentators, including Paul Krugman have expressed skepticism here.
All the same, we apparently have a blind spot regarding what happens in the market for crude oil futures, because these are not regulated or monitored to the same degree as other futures markets for commodities.
Some more on the investigation here from the Washington Post.
Key paragraphs from the article:
Gregory Mocek, director of enforcement at the CFTC, said five senior trial lawyers, "some of the most experienced prosecutors that we have," and other investigators were engaged in the inquiry. "The scope is quite broad," Mocek said, adding that the commission was looking at the "national crude market," including trades on regulated exchanges, cash trades, storage, pipeline operations and shipping.
...
Congress has been pressing the CFTC to take tougher action to stop what lawmakers call "speculation" -- which is not illegal -- and possible unlawful manipulation of oil markets. Some lawmakers have suggested that the commission discourage speculation by increasing margin requirements so that traders would have to put up more cash to buy positions on commodity markets.
...
Mocek said yesterday that the CFTC had about 60 price manipulation investigations in progress aside from the one looking at the national crude oil market. Some of those investigations also involve oil and gas firms or traders, he said.
If Daily Kos user bonddad ever comes back, maybe we'll get some expert commentary here. (Jerome, can you give us a hand here, too?)
This is a very important story and one that will make waves in the news in coming weeks. The investigation might shed light on something that is having an immediate and an immediately negative impact on household finances for the average American.
It's also a perfect lead-in for a discussion on yet another reason why common-sense regulation of markets is important.