Comments for "Countdown: McCain, Gas Prices, and the Enron loophole" Video at VideoSift.com

By Throbbin

Throbbin (http://politics.videosift.com/member/Throbbin) — Wed, 18 Jun 2008 21:26:46 -0700

THIS IS THE MOST IMPORTANT VIDEO ON VIDEOSIFT RIGHT NOW!

I'm not even American, and I recognize the implications of this video (and the Enron Loophole) on the entire world.

McCain for Runner-Up 2008!

By eric3579

eric3579 (http://eric3579.videosift.com) — Wed, 18 Jun 2008 21:53:34 -0700

If you have not seen the Enron documentary, I highly suggest you do.
http://www.videosift.com/video/Enron-The-Smartest-Guys-in-the-Room

By deathcow

deathcow (http://politics.videosift.com/member/deathcow) — Thu, 19 Jun 2008 00:01:23 -0700

*doublepromote

By siftbot

siftbot (http://siftbot.videosift.com) — Thu, 19 Jun 2008 00:01:23 -0700

Double-Promoting this video and sending it back into the queue for one more try; last queued Wednesday, June 18th, 2008 8:09pm PDT - doublepromote requested by deathcow.

By Trancecoach

Trancecoach (http://politics.videosift.com/member/Trancecoach) — Thu, 19 Jun 2008 02:32:54 -0700

I'm sure there are hundreds of similar loopholes making the corporate executives FILTHY rich while the lower and middle classes wonder what's happened to their savings.

By twiddles

twiddles (http://politics.videosift.com/member/twiddles) — Thu, 19 Jun 2008 07:11:57 -0700

*promote again... perhaps finally the media may be getting the real story about oil/commodities out there

By siftbot

siftbot (http://siftbot.videosift.com) — Thu, 19 Jun 2008 07:11:57 -0700

Promoting this video back to the front page; last published Thursday, June 19th, 2008 1:43am PDT - promote requested by twiddles.

By littledragon_79

littledragon_79 (http://politics.videosift.com/member/littledragon_79) — Thu, 19 Jun 2008 14:57:55 -0700

Thanks for the interest and promotes, though it doesn't seem like anything I submit will break 30.

By mysdrial

mysdrial (http://politics.videosift.com/member/mysdrial) — Thu, 19 Jun 2008 15:13:19 -0700

>> ^littledragon_79:
Thanks for the interest and promotes, though it doesn't seem like anything I submit will break 30.

Well, that was 31, so you'll have to aim higher next time.

By Fedquip

Fedquip (http://fedquip.videosift.com) — Thu, 19 Jun 2008 16:53:02 -0700

*promote

thats some good solid journalism right there

By siftbot

siftbot (http://siftbot.videosift.com) — Thu, 19 Jun 2008 16:53:03 -0700

Promoting this video back to the front page; last published Thursday, June 19th, 2008 7:11am PDT - promote requested by Fedquip.

By winkler1

winkler1 (http://politics.videosift.com/member/winkler1) — Thu, 19 Jun 2008 17:30:53 -0700

Holy Crap! This is what happens when corporations, whose only goal is profits and growth (like, oh I know - CANCER) write laws. Graham's presence on McCain's side tells all.

By MarineGunrock

MarineGunrock (http://politics.videosift.com/member/MarineGunrock) — Fri, 20 Jun 2008 05:06:20 -0700

Wait - so that bill passes - where's the 25% drop in oil prices?

By littledragon_79

littledragon_79 (http://politics.videosift.com/member/littledragon_79) — Fri, 20 Jun 2008 08:00:54 -0700

>> ^MarineGunrock:
Wait - so that bill passes - where's the 25% drop in oil prices?

I found the below article on CBS News ( http://www.cbsnews.com/stories/2008/06/19/politics/animal/main4197625.shtml )...not sure if there should be any concern that there was a big "Presented By ExxonMobile" near the top of the article. I would think it's going to take a while to make any impact and that whole time the speculators are going to do what they can to find workarounds. All up I think it's a good opinion piece and does raise a couple questions in my mind about the loophole and the oil industry. But for now I think we wait a bit and see what develops.

Jun 19, 2008 - (Political Animal) THINKING OUT LOUD ABOUT OIL....Is oil in a speculative bubble? There are a couple of memes making the rounds on this score: First, that the "real" fair market price of oil ought to be around $70/barrel or so, and second, that the speculative bubble sending the price up to $130/barrel has been fueled by the "Enron loophole," a measure passed in 2000 that exempted online energy commodity trading from federal regulation.

On the first issue, I'm confused: I have no idea how you'd figure out the "real" price of oil even in theory. I suppose you could make historical arguments about oil prices, or perhaps compare the prices of different forward contracts and look for inconsistencies, but those strike me as the kinds of strategies that can be used to prove whatever you set out to prove. So count me as skeptical that they can tell us very much. At the very least, claiming that $70 is the right price because that's how much it costs to pump a marginal barrel of oil is silly. If demand increases but nobody has any more oil to pump, then the price will get bid up regardless of the cost of production.

Now, that doesn't mean there isn't a bubble. Maybe the global savings glut, which powered the housing bubble, is now being redirected to oil. But unlike housing, where there are analytical tools and historical trends you can use to get at least a sense of whether prices are way above their fundamentals, oil bobs up and down all the time. And since there's no truly reliable data on how much production capacity the world has (hell, there's not even any truly reliable data on how much oil is actually produced on a monthly basis), there's no way of setting any kind of baseline. So who knows?

On the second issue, I'm also confused, though a little less so. But here's the thing: the Enron loophole has been closed. I can't quite figure out if it got closed last month or last week (there was a technical glitch with the farm bill it was attached to), but in any case, it's been closed. It will be several months before the CFTC can actually implement regulation and oversight of online trading, but if this is really a factor in driving up oil prices then even the prospect of near-term regulation ought to have a dramatic effect on speculative buying. But in fact, nothing much has happened lately. Oil prices are down today based on news out of China, but for the most part prices have just jumped around sort of randomly in the $130-140 range over the past couple of weeks. There's been nothing dramatic at all. So my initial feeling is that the Enron loophole theory doesn't hold water.

In any case, this is mostly a long-winded way of shrugging my shoulders and saying, "eh." I just felt like noodling over this stuff in public. Based on my general knowledge of the oil industry and its constraints, I've long believed that the steady rise in oil prices since 2003 has been basically driven by supply and demand. But I have to admit that the huge increase over the past five months has had a bit of a bubbly feel to it. Aside from a few interesting tidbits, though, I haven't really come across much solid evidence to back that up. But I'll keep looking into it.

By MarineGunrock

MarineGunrock (http://politics.videosift.com/member/MarineGunrock) — Fri, 20 Jun 2008 08:28:02 -0700

Well written comment, dragon.

By Aemaeth

Aemaeth (http://politics.videosift.com/member/Aemaeth) — Fri, 20 Jun 2008 22:06:19 -0700

>> ^MarineGunrock:
Well written comment, dragon.

He definitely gave me info I wanted, but he didn't write it

By littledragon_79

littledragon_79 (http://politics.videosift.com/member/littledragon_79) — Sat, 21 Jun 2008 04:16:12 -0700

>> ^Aemaeth:
>> ^MarineGunrock:
Well written comment, dragon.

He definitely gave me info I wanted, but he didn't write it

Yes, sorry to disappoint but Kevin Drum from Politcal Animal deserves credit for writing the aricle. Now if you're complimenting me on finding it, posting it here as follow up, and adding some quick thoughts at the top including the ExxonMobile bit - then thank you very much Also, edited my intro to the article to make a little more sense.

By bamdrew

bamdrew (http://politics.videosift.com/member/bamdrew) — Sat, 21 Jun 2008 10:49:40 -0700

gets pretty good at 6min in.

By zor

zor (http://politics.videosift.com/member/zor) — Sat, 21 Jun 2008 13:32:50 -0700

I appreciate the point they are trying to make but Olbermann is asking us to put aside the law of supply and demand if favor of a whacked out conspiracy theory. The smack down for anyone who really believes that there are parasitic 'speculators' out there taking our money is that there are no gas lines and no shortages. In countries where the price is controlled like China and Mexico, you roll up to the pump and there is nothing there. "maybe tomorrow," they say. Can you imagine how fucked you'd be if that happened? You really think you're fucked now, just wait. Before the concept of futures trading was invented prices fluctuated wildly and created huge problems. $5 gas is not a huge problem, it is market reality. Get used to it until demand softens and spend your energy elsewhere.

By MarineGunrock

MarineGunrock (http://politics.videosift.com/member/MarineGunrock) — Sat, 21 Jun 2008 13:44:42 -0700

Prices fluctuated wildly? Is your definition of "wildly" a few cents a week, both up an down? Hovering at $1.30 a gallon?

By Farhad2000

Farhad2000 (http://farhad.videosift.com) — Sat, 21 Jun 2008 14:04:13 -0700

McCain is not entirely responsible for this. It's Alan Greenspan. Its the fact that the Federal Reserve allowed Wall Street to start implementing speculative influences and financial tools to make more money. Their reasoning was that if there is a gain in revenue it means a net gain for the economy as a whole. Never mind the fact that in actuallity its simply millions and billions of dollars doing hoop tricks instead of actually producing anything. Production creates prosperity not financial retooling.

Of course this is easier to say now then back then, but its easy to pull lessons from the 80s times of rampant wall street gaming, junk bonds and other financial warnings like the Asian economic crisis.

But remember finance and economics is a young inexact science (though don't tell this to economists they think everything in the world can be whittled down to scientific formulas and models). Laying the blame on McCain is a cheap political shot without the contextual information regarding the failings of the financial controllers who watch over such actions, such as the Federal Reserve and the SEC.

By marinara

marinara (http://politics.videosift.com/member/marinara) — Sat, 21 Jun 2008 20:47:04 -0700

Watch my video
http://www.videosift.com/video/Gas-Prices-Not-Due-To-Oil-Shortage

By jwray

jwray (http://jwray.videosift.com) — Sun, 22 Jun 2008 06:09:21 -0700

We're using oil a lot faster than it's being created by natural processes. We've already used at least a quarter of all the oil that can be extracted from the Earth. It's inevitable that the price of oil will continue to increase until renewables vastly decrease our rate of consumption of oil. Those oil speculators are making a good bet, because we're going to run out of oil in 60 years at this rate.

It would be better if the profits from inflated oil prices went to public works instead of blood-sucking corporations, but I've nothing against inflating oil prices. It's the best way to reduce oil consumption.

By calvados

calvados (http://politics.videosift.com/member/calvados) — Sun, 22 Jun 2008 08:00:41 -0700

^Actually many oil geologists believe we've now used more than half the ultimately recoverable conventional oil reserves. Peak oil. http://www.videosift.com/video/Peak-Oil-Gas-Prices-Supply-Depletion-Energy-Crisis

By NordlichReiter

NordlichReiter (http://politics.videosift.com/member/NordlichReiter) — Sun, 22 Jun 2008 10:35:23 -0700

We had watched a vid and had a three day discussion about Enron in my ethics class, aswell as social psychology on group think.

One person tried to defend them, ... he failed epically.

PS This video sucks for buffer speed.

By jwray

jwray (http://jwray.videosift.com) — Tue, 24 Jun 2008 03:16:36 -0700

Commodities trading is a zero sum game (actually negative sum because of overhead) but in theory it can smooth prices (speculators buy up excess supply in expectation of future shortages, to the benefit of the producers).