Comment Text:
M. Laine Mashburn
248 Bird Haven Lane
Ether, NC 27247-0179
March 24, 2011
David Stawick
Secretary, Commodity Futures Trading Commission Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581
Dear Mr. Stawick:
As gasoline prices are again out of control and spiraling toward 2008 levels, you and your colleagues at the Commodity Futures Trading Commission are continuing to allow oil speculators, including Goldman Sachs and BP, to unremittingly and unfairly pressure the CFTC to dilute and delay new regulations authorized under the 2010 Dodd-Frank finance reform law to curb excessive oil speculation and unreasonably high gasoline prices.
According to 18th century political philosopher Edmund Burke "all that is necessary for the triumph of evil is that good people do nothing". As in 2008, voters need to send a clear message of outrage to federally-elected officials of both political parties who accept political contributions from oil speculators while apparently turning a blind eye to their tampering (call it what you will, tampering by any name is still the same) with the CFTC, as well as blatant market manipulation at our expense.
Television networks share the blame, paid in huge commercials fees by the oil and natural gas lobby to assault us with a constant barrage of news stories of impending worldwide oil shortages which have no basis in fact, so that we will resign ourselves to daily increasing gasoline prices.
In a recent email to voters, Representative Larry Kissell (D-NC) said that he will sponsor legislation to establish a National Strategic Gasoline Reserve in order to avert future gasoline price escalations. With the immense data base available to Congress, Mr. Kissell must have known that as reported in all the financial news services, as of mid-February, 2011 we already have a massive de facto reserve. Gasoline inventories are currently at a 20 year high, while crude oil inventories are currently at an all-time high. Adding even more, a new pipeline recently online from Canada's largest producing oil fields to the major oil-trading hub in Cushing, Oklahoma, is bringing millions of barrels of new oil daily.
However, in the face of these fundamentals which are supposed to drive
down gasoline prices, just the opposite is happening.
Given this existing supply projected to exceed demand into the foreseeable future, Washington legislators of both parties and the President should insist that the Commodity Futures Trading Commission, without further delay and without dilution of the original intent of the Dodd-Frank finance reform law, forthwith issue the long-overdue rules meant to more stringently regulate oil speculation. Moreover, as a matter of ethics, principle and courage, the CFTC commissioners should neither be cowed nor corrupted by the Wall Street banks and big oil companies, which, through rampant oil speculation, have drastically degraded the standard of living of 99% of Americans.
Excessive speculation hurt the economy in 2008 and, once again, is harming the economy in 2011. According to data recently released by the Commission, speculators have raised their positions in energy markets by
64 percent compared to June 2008, bringing speculation to the highest level on record.
We need meaningful, effective speculative position limits to restore balance to commodities markets and ensure that they are connected to market fundamentals, so that they fulfill their price-discovery function properly and without distortions caused by excessive speculation. In particular, I:
• support the Commission's immediate adoption of spot-month speculative position limits; • urge the Commission to adopt effective back-month levels that will accomplish the legislative purpose of curbing excessive speculation; • urge the Commission to adopt single-month limits that are no higher than two-thirds of the all-months-combined levels; • urge the Commission immediately to adopt a position-accountability regime for the nonspot months in place of its proposed position-visibility rule; and • urge the Commission to adopt lower speculative position limits for passive, long-only traders.
Time is of the essence, and I urge you to act quickly. Our pocketbooks and the broader economy depend on it.
Sincerely,
M. Laine Mashburn
919-428-9726
