~Lauren M. Ruhland, SET intern
As Josh Rule mentioned earlier this month, airline companies are encouraging their customers to pressure their elected representatives for an end to oil speculation.
My father is a frequent flier and was encouraged to fight oil speculation at the Stop Oil Speculation Now (SOS Now) website. When he gave his ZIP code, the site created the body of a letter automatically addressed to our senators and encouraged the letter-writer to amend the automatically-generated text to suit his needs. Channeling his past existence as an economics major, he made good use of the text they gave him–with some changes.
I strongly urge your NOT to support of S. 3268 – the Stop Excessive Speculation Act. This bill accomplishes the most important goal of putting position limits on excessive speculation. is very dangerous and poses a serious and direct threat to our economy.
S. 3268 is also a good first step towards ensuring that formerly “dark” over-the-counter markets are required to do business in the sunshine and to ensure that no one entity unduly controls the market. Any regulatory interference of price signals will lower our standards of living in the long run. Capitalism need pure price signals to drive the actions that meet customer demands. S. 3268 will disrupt price signals, resulting in reduced liquidity and increased transaction costs for users.
I encourage you not to back this bill because it creates a much needed an artificial distinction between “legitimate“ hedgers and those who are in the market for purely speculative purposes, ensuring that traders who have no relationship to the physical product are unable to take advantage of existing loopholes. Another key provision in the bill you should know about closes the “London Loophole”. It’s critical this loophole be closed to create more transparency and establish reporting requirements which are already required for trading on U.S. exchanges.
I will be watching this issue closely and encouraging my friends to contact their elected officials, too. Thank you for considering my point of view on the critical issue of energy prices and the reforms Congress can enact today regulatory interference that will make a real difference to hardworking Americans and businesses.
The SOS Now website prominently claims that “[r]isky speculation in gas and oil markets is hurting our families.” My family’s probably an anomaly, but we were all bonding over Dad’s small-scale anti-regulation subversion yesterday night.