The Democrats And Oil Speculators

It was just a matter to time before the Congressional Democrats would follow the President's lead on going after oil speculators.  Fresh with news that Federal investigators had just snared themselves a real case of  oil manipulation by an electronic trading firm, Optiver, Representative Chris Van Hollen and 42 other Democrat Congressmen wrote Attorney General Eric Holder a letter; urging him to use every means possible to "insure the proper functioning of our oil and gas markets."  Of course, that letter wasn't really necessary because, just last week, President Obama had announced, in a Rose Garden address, that he had committed the Justice Department to doing just that.  But, what the hell, Van Hollen and his buddies saw a political opportunity and they took it.

Now, to keep the politics going,  Van Hollen went on Neil Cavuto's Your World show to argue with Neil over how oil prices are being jacked up by speculation and manipulation of the markets.  Of course, Van Hollen immediately brought up the Optiver case as proof of this.  But, is Optiver any real proof of any  manipulation of the markets?  I don't think so.

First, the kind of charges that were brought against Optiver are extremely rare.  In terms of frequency, the feds charged that, in 2007, Optiver (one the world's largest oil and commodities trading companies) attempted to manipulate the market 19 times and were successful in at least 5 cases.  Wow, 19 times by a company that probably trades oil futures contracts thousands of times a year!  But here's another thing.  No guilt was ever proven and the court never found any real wrongdoing.  Optiver negotiated for and accepted a $15 million penalty; probably, to just get the feds off their backs and avoid any further attorney fees.  But, for a deceptive politician like Van Hollen (the former Chairman of the Democratic Congressional Campaign Committee), the penalty itself was enough proof that oil speculators are widely and illegally manipulating the oil and gas markets.

Obama's Latest Ruse: Oil Riggers/Spectulators

Throughout his presidency, Obama has blamed one straw man after another in an attempt to deflect blame for his own shortcomings. Now, in what can only be called the biggest ruse of his presidency, he is trying to make you and I think that the only reason oil prices are high is because of oil price rigging and speculation.  Even for Obama, this is a new low.

In his Rose Garden campaign photo-op of yesterday, he called on Congress to pass new legislation that would strengthen the government's ability to prosecute them. But, think about this.  If oil rigging and fraudulent oil speculation is such a rampant problem, why is it that the President's own Securities and Exchange Commission, or his Department of Justice, or his Federal Trade Commission haven't prosecuted a single case of it in the last three years.  Why is it that his year-old Oil Speculation Task Force hasn't exposed such illegal activity. The reason is simple. There isn't any.

So, Obama is calling for stricter regulation, increased oversight, and higher fines for something that his own people have "never" proven to exist. All he's really trying to do is prove to the dumbest of voters that he's doing something to lower oil costs when, in fact, he is more responsible for high oil and gasoline prices than anyone else due to his excessive spending and his blocking of new oil exploration on federally-controlled lands and offshore locations.  But, more than that, Obama expects to use this as another one of his anti-Republican campaign messages.  Clearly, if his call for new regulation is ignored by Congress, he will, again, say that it's because the Republicans are putting the rich speculators and big oil companies ahead of what is really good for this nation.

By the Way. oil prices went up yesterday with oil traders obviously laughing off Obama's grandstanding on increased regulation.