Forcing a light on speculators
I was thrilled to learn today via a news release emailed to me by the American Trucking Assns. (ATA) that the big trucking lobby is joining forces with U.S. Sen. Maria Cantwell (D-WA) and members of a targeted reform effort and will jointly hold a news conference tomorrow to press Congress “to improve transparency in the over-the-counter markets and establish aggregate position limits across all trading platforms.”
In other words, trucking will not be alone in the quest to curb the power that so-called speculators have over our commodity markets—including especially vehicle fuels.
The conference is set for 1 pm EST tomorrow (02/02/10) at the Dirksen Senate Office Building in Washington, DC. FleetOwner will of course report on it on the front page daily news section of our website.
Slated to speak on ATA’s behalf is Con-way Inc. vp Randy Mullett, who will call on lawmakers to improve transparency in over-the-counter markets and establish aggregate position limits across all trading platforms. ATA said he will also speak to the impact that excessive oil speculation has on trucking.
Along with Sen. Cantwell, other scheduled to speak include these representatives of the Derivatives Reform Alliance (DRA): Michael Masters, managing member, Masters Capital Management LLC; Roger Johnson, president, National Farmers Union; and Sean Cota, of Cota & Cota, Inc., of Bellows Falls, VT.
Greater transparency for the futures/derivatives markets is being sought by ATA and others
In its announcement today, ATA pointed out that under current law, some complex financial transactions and trading in energy and agricultural commodities take place with no transparency and without any federal oversight. “These include the credit-default swaps on mortgage-backed securities that fueled the housing bubble, as well as speculative trading that helped create massive bubbles in a range of consumer goods, from gasoline, heating oil and natural gas to wheat, cotton and other commodities,” said the trucking association.
ATA noted that DRA is composed of members of the Commodity Markets Oversight Coalition and Americans for Financial Reform. “These groups believe that inadequate federal oversight and excessive speculation contributed significantly to the financial crises and commodity bubbles of the previous decade, and believe that meaningful reform is essential in order to return stability, confidence and transparency to the futures/derivatives markets and the broader economy,” noted ATA.
I am no expert on speculation let alone up to snuff on derivatives, but I have a very good sense that the need for federal lawmakers and regulators to consider reforms for the futures/derivatives market is very real and can only benefit trucking in the long haul.
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February 2nd, 2010 at 4:39 pm
Actually, there was plenty of federal oversight (including congressional) but there was a political agenda in ignoring the bad lending via the Community Reinvestment Act.
The fuel bubble was widely blamed on the “obscene profits” of the “greedy oil companies” when it was actually the speculators in the futures market. Anti-capitalism has a rather large following amongst the more ignorant members of our society.
Is speculation bad? Not in and of itself. Nobody has a 401k that they want to see diminish in value, so are they the “evil” speculators that some want to regulate or simply ordinary people who want their investment to grow?
Has the ‘invisible hand” been replaced by a federally-controlled stock market? I hope not. Outcome-based policies (based on government fiat) simply doesn’t work in a free-enterprise society. There will always be winners and losers (that’s aka “life”).
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