| 00:00:59 | GOOD AFTERNOON, EVERYONE. |
| 00:01:04 | PLEASED TO CALL TO ORDER THIS IMPORTANT MEETING OF THE STEERING AND POLICY COMMITTEE, WITH APPRECIATION TO OUR SHARE, CONGRESSWOMAN ROSA DELAURO OF CONNECTICUT, WHO WILL PRESIDE OVER TODAY'S PRESENTATION. |
| 00:01:19 | I AM PLEASED TO BE JOINED BY THE CHAIR OF OUR CAUCUS, CONGRESSMAN JOHN LARSON OF CONNECTICUT, AND THE RANKING MEMBER ON THE NATURAL RESOURCES COMMITTEE, CONGRESSMAN ED MARKEY, FORMER CHAIR OF THE ENERGY SECURITY SELECT COMMITTEE. |
| 00:01:34 | I AM ALSO PLEASED TO BE JOINED BY CONGRESSMAN DON EDWARDS OF MARYLAND, -- DONNA THE WORDS OF MARYLAND, SANDY LEVIN OF THE WAYS AND MEANS COMMITTEE, AND FROM THE VIRGINIA, MR. |
| 00:01:51 | MORAN. |
| 00:01:52 | WHAT I THINK ABOUT -- WHAT I THINK ABOUT TODAY'S PROCEEDINGS, ONE NAME AND GIVE IT IS "THE AGONY AND ECSTASY. |
| 00:02:03 | " THE AGONY OF THE CONSUMER IS WITH THE PRICE OF THE POMP AND WHAT THAT MEANS TO THEM, ESPECIALLY THOSE HAVING TROUBLE MAKING ENDS MEET, AND HOW THE HIGH COST AT THE PUMP IS AN OBSTACLE FOR THEM. |
| 00:02:15 | IT IS NOT JUST A LUXURY, I GUESS SOMETHING THEY MUST DO TO MAKE ENDS -- IT IS IS SOMETHING THEY MUST DO TO MAKE ENDS MEET THE ECSTASY IS FOR ALL I ELKRIDGE THEY -- THE ECSTASY IS FOR OIL. |
| 00:02:34 | THEY RIGHT IN RECORD PROFITS LAST YEAR. |
| 00:02:37 | -- THEY RAKED IN RECORD PROFITS LAST YEAR AND THEY ARE ON TRACK FOR ANOTHER YEAR OF ASTRONOMICAL PROFITS. |
| 00:02:49 | WE WILL HEAR MORE ABOUT THAT FROM OUR EXPERT WITNESSES AND FROM OUR COLLEAGUES. |
| 00:02:56 | I THANK MY COLLEAGUES FOR JOINING US AND I APPRECIATE THE PRESENCE OF A PROFESSOR GREENBERGER AND MR. |
| 00:03:02 | GILL FORD -- MR. |
| 00:03:06 | GUILFORD. |
| 00:03:08 | >> I WANT TO WELCOME EVERYONE HERE TODAY. |
| 00:03:11 | IT IS A PRIVILEGE TO DO THAT. |
| 00:03:14 | I WANT TO WELCOME MY COLLEAGUES ON THE PANEL THIS AFTERNOON. |
| 00:03:19 | I OIL PRICES AFFECT EVERY ASPECT OF AMERICANS' LIVES, NOT JUST THE COST OF TRAVELING, BUT THE HEATING OF HOMES, FOOD, AND OTHER PURCHASES. |
| 00:03:30 | THERE ARE MANY REASONS FOR THE FLUCTUATIONS AND THE PRICE OF OIL. |
| 00:03:36 | ON SOME OF THESE, TENSION IN THE MIDDLE EAST, THE ADMINISTRATION IS MOVING FORWARD WITH THE INTERNATIONAL COMMUNITY. |
| 00:03:42 | SAUDI ARABIA ANNOUNCED THEY WOULD LOWER OIL PRICES. |
| 00:03:45 | THAT BEING SAID, THE COST OF GAS IS IRREFUTABLY AFFECTED BY RABID SPECULATION IN THE OIL MARKET, AND THAT IS SOMETHING WE CAN AND SHOULD DO MORE ABOUT. |
| 00:03:55 | LAST YEAR, AT THE PEAK OF THE LAST OIL PRICE BUBBLE, GOLDMAN SACHS SPECULATED THAT SPECULATORS INCREASE CRUDE PRICES BY 20%, AND THE PRICE OF GAS BY 56 CENTS PER GALLON. |
| 00:04:07 | EVEN THE HEAD OF EXXONMOBIL CONCEDED THAT THE PRICE OF OIL SHOULD HAVE BEEN IN THE "$60 TO $70 RANGE," WENT INSTEAD IT HOVERED AT $100 A BARREL. |
| 00:04:21 | SPECULATORS MAKE UP 70% TO 80% OF THE OIL MARKET. |
| 00:04:27 | WE ARE HOLDING THIS HEARING TO SEE HOW WE CAN DO A BETTER JOB OF CURBING EXCESSIVE SPECULATION IN THE OIL MARKET. |
| 00:04:33 | THE DODD-FRANK OIL LEGISLATION GAVE THE EIGHT CFTC BROAD AUTHORITY TO INVESTIGATE MANIPULATION IN THE MARKET, AT LAST YEAR, THE COMMODITIES TRADE COMMISSION CHARGED 5 OIL SPECULATORS WITH MANIPULATING THE CRUDE PRICES IN 2008, NETTING THEM MORE THAN $50 MILLION EVEN AS OIL PRICES CLIMBED TOWARDS RECORD HIGHS. |
| 00:04:57 | IN THIS HOUSE, THE REPUBLICAN MAJORITY HAS TRIED TO STOP THE CFTC AT EVERY TURN TO THE AGRICULTURAL APPROPRIATIONS BILL LAST YEAR PROVIDED ONLY $172 MILLION IN FUNDING, ABOUT 44% BELOW THE PRESIDENT'S REQUEST, MEANING ITTHERE ARE ABOUT 159 LAST COPS ON THE BE. |
| 00:05:24 | -- ON THE BEAT. |
| 00:05:27 | IT IS STILL NOT ENOUGH FOR THE CFTC TO PERFORM AS IT SHOULD. |
| 00:05:31 | THEIR REQUEST WAS FOR THREE AND $8 MILLION. |
| 00:05:33 | WE ARE HERE TO -- THEIR REQUEST WAS FOR $308 MILLION. |
| 00:05:41 | WE ARE HERE TO REQREPRESENT AMERICAN CONSUMERS, NOT OIL SPECULATORS. |
| 00:05:44 | WE SHOULD BE STRENGTHENING ITS ABILITY TO COMBAT RAMPANT SPECULATION, NOT WORKING TO UNDERMINE IT. |
| 00:05:54 | I INTRODUCED LEGISLATION TO PROVIDE THE CFTC WITH A RELIABLE SOURCE OF FUNDING. |
| 00:06:00 | WALL STREET ACCOUNTABILITY TO THE SUSTAINABLE FUNDING ACT WILL BRING THE CFTC IN LINE WITH OTHER FINANCIAL REGULATORS. |
| 00:06:10 | THE FCC, THE SEC, THE FDIC. |
| 00:06:14 | AND IT WOULD AUTHORIZE THE COLLECTION OF USER FEES TO OFFSET THE COSTS OF OPERATIONS. |
| 00:06:18 | IN ORDER TO DECREASE PRICES IMMEDIATELY, I AND SEVERAL OF MY COLLEAGUES ASKED THE PRESIDENT TO RELEASE SOME OIL FROM THE STRATEGIC PETROLEUM RESERVE. |
| 00:06:26 | RIGHT NOW THE PETROLEUM RESERVE HOLDS 696 MILLION BARRELS AND IS FILLED TO MORE THAN 95% OF ITS CAPACITY. |
| 00:06:39 | EVEN RELEASING A SMALL AMOUNT OF OIL FROM THE RESERVE CAN HAVE A HUGE IMPACT ON THE PRICE OF GAS AND DISCOURAGE SPECULATION. |
| 00:06:46 | TODAY I HOPE WE CAN DISCUSS THE BEST WAYS TO CONTINUE MOVING FORWARD ON EXCESSIVE SPECULATION. |
| 00:06:55 | LAST YEAR PRESIDENT OBAMA RECONSTITUTED THE OIL AND GAS PRICE WORKING GROUP TO INVESTIGATE MANIPULATION IN THE MARKET. |
| 00:07:04 | WHAT SHOULD THIS WORKING GROUP BE DOING TO MAKE A DIFFERENCE? |
| 00:07:06 | TO THE CURRENT MARKET CONDITIONS WARRANT THE USE OF THE CFTC EMERGENCY AUTHORITY TO SET MARGINS AND POSITION LIMITS? |
| 00:07:13 | THE CFTC HAS HAD ITS AUTHORITY FROM THE BEGINNING OF ITS EXISTENCE BUT HAS REFRAINED FROM GETTING INVOLVED SINCE 1980. |
| 00:07:20 | THOSE QUESTIONS AND OTHERS -- I KNOW OUR PANEL IS GOING TO ADDRESS. |
| 00:07:26 | THANK YOU FOR COMING, AND WE LOOK FORWARD TO OUR DISCUSSION TODAY. |
| 00:07:30 | WITH THAT, LET ME YIELD TIME TO MY COLLEAGUE FROM MASSACHUSETTS, MR. |
| 00:07:38 | MARKEY. >> THANK YOU SO MUCH, CHAIRWOMAN DELAURO. |
| 00:07:42 | THANK YOU FOR HOLDING THIS. |
| 00:07:47 | THANK YOU, LEADER PELOSI, FOR CONDUCTING THIS VERY IMPORTANT HEARING AT THIS TIME. |
| 00:07:52 | THANK YOU FOR CONVENING THIS. |
| 00:07:56 | I THINK WE ARE AT A VERY IMPORTANT MOMENT IN THE UNITED STATES RELATIONSHIP WITH THE OIL MARKETPLACE. |
| 00:08:02 | RIGHT NOW THE NATIONAL AVERAGE FOR THE PRICE OF GASOLINE STANDS AT $3. |
| 00:08:08 | 93 A GALLON NATIONWIDE. |
| 00:08:10 | WITHIN THE NEXT WEEK, THE AVERAGE AMERICAN DRIVER COULD BE STARING THROUGH THE WIND CHILLS AT $4 A GALLON -- THROUGH THE WINDSHIELD AT $4 A GALLON. |
| 00:08:23 | OF COURSE, THE REPUBLICANS WOULD LIKE YOU TO THINK THIS IS ALL PRESIDENT OBAMA'S FALL AND DEFLECTED BLAME FROM THE REAL CULPRITS. |
| 00:08:31 | THEY ARE WRONG. |
| 00:08:32 | THE CURRENT SPIKE IN GAS PRICES IS NOT ABOUT OBAMA. |
| 00:08:35 | IT IS ABOUT OPEC -- OIL COMPANIES AND WALL STREET SPECULATORS. |
| 00:08:41 | WE COULD TAKE FOUR STEPS RIGHT NOW THAT COULD ADDRESS THIS SITUATION. |
| 00:08:46 | ONE, E. |
| 00:08:47 | COLI OIL FROM THE STRATEGIC PETROLEUM -- DEPLOY OIL FROM THE STRATEGIC PETROLEUM RESERVE. |
| 00:08:57 | WHEN THE FRENCH GOVERNMENT SAID THAT TALKS WITH THE UNITED STATES AND OTHERS DEPLOY FROM THE OIL RESERVES, OIL DIPPED JUST ON THE MERE THREAT TO USE THIS WEAPON AGAINST SPECULATORS. |
| 00:09:09 | THE STRATEGIC PETROLEUM RESERVE IS TO WALL STREET SPECULATOR IS WHAT KRYPTONITE IS TO SUPER MAN. |
| 00:09:23 | REPUBLICANS OPPOSE THIS. |
| 00:09:25 | THEY BELIEVE THE OIL MARKET IS A FREE MARKET. |
| 00:09:28 | IT IS IS NOT. |
| 00:09:29 | TWO, WE NEED TO STOP SPECULATORS FROM YEARLY GAINS THAT TURN TO THE CRUDE OIL MARKET INTO A CASINO. |
| 00:09:35 | LAST YEAR, REPUBLICANS TRIED TO SLASH THE BUDGET OF THE COMMODITIES FUTURES TRADING COMMISSION, THE AGENCY THAT SERVES ON THE TOP OF THE SPECULATION AT BEAT. |
| 00:09:47 | THE REPUBLICAN MAJORITY HAS MOVED LEGISLATION INTENDED TO DELAY REFORMS BY THE DEMOCRATIC CONGRESS THAT WOULD DIMINISH THE POWER OF WALL STREET TRADING FIRMS TO MANIPULATE THE MARKET. |
| 00:09:57 | WALL STREET'S LOBBYISTS HAVE GONE SO FAR AS TO SUE TO BLOCK THESE REFORMS. |
| 00:10:03 | WE SHOULD BE FULLY ARMOND THE WALL STREET COPS AND ENSURE THAT THEY CAN CRACK DOWN ON THE GASOLINE GAMBLERS IN THE MARKETPLACE. |
| 00:10:12 | THE REPUBLICANS ARE WRONG. |
| 00:10:15 | THIRD, WHICH IT END OUT THE NEED FOR EXPLOITATION OF AMERICAN ENERGY RESOURCES. |
| 00:10:22 | LAST YEAR, AMERICA'S NUMBER ONE EXPORT OF ANY KIND WAS OUR FIELD. |
| 00:10:28 | MORE THAN 1 BILLION BARRELS OF GASOLINE, SENT OVERSEAS TO LOCATIONS LIKE CHINA, MOROCCO, AND SINGAPORE. |
| 00:10:38 | WITH RUSH HOLT AND CONGRESSMAN BILL OWENS, I INTRODUCED LEGISLATION THAT WOULD STOP THE EXPORT OF AMERICA'S OIL AND FUEL PRODUCED FROM PUBLIC LANDS. |
| 00:10:51 | WHEN AMERICAN FAMILIES ARE FACING FOR DOLLAR GASOLINE, WE SHOULD NOT BE ALLOWING BIG OIL TO CONTINUE TO EXPORT AMERICA'S FUEL THAT WE DRILL FOR HERE. |
| 00:11:01 | REPUBLICANS OPPOSE THIS AMENDMENT ALMOST UNANIMOUSLY. |
| 00:11:04 | FOUR, WE MUST END THE TAX BREAKS FOR OIL COS. |
| 00:11:10 | REPUBLICANS WANT TO RAISE TAXES ON THE WIND INDUSTRY BUT HAVE BEEN PROTECTING TAX SUBSIDIES FOR THE MOST PROFITABLE OIL COMPANIES IN THE WORLD. |
| 00:11:17 | AMERICAN TAXPAYERS SHOULD NOT BE ASKED TO GIVE OIL COMPANY'S 100- YEAR-OLD SUBSIDIES SO THEY CAN SELL US OIL AT MORE THAN $100 A BARREL AND MAKE MORE THAN $100 BILLION IN ANNUAL PROFITS. |
| 00:11:29 | WE SHOULD BE PUSHING A LONG- TERM PLAN AND MOVES US AWAY FROM FOR A OIL AND INSULATE US FROM THE PRICE SHOCKS OF THE OIL MARKET THAT IS CONTROLLED BY OPEC. |
| 00:11:38 | IF WE TAKE THESE FOUR STEPS, WE WILL STOP SPECULATORS FROM MANIPULATING THE OIL MARKET, WE WILL REIN IN AND FEEL EXPORTERS WHO ARE SENDING RESOURCES TO CHINA, AND WE WILL TELL THE OPEC DICTATORS THAT WE DON'T NEED THEIR OIL ANYMORE THAN WE NEED THERE IS SAND. |
| 00:11:57 | THANK YOU. >> I WANT TO THANK YOU, MR. |
| 00:11:59 | MARKEY. |
| 00:12:01 | LET ME INTRODUCE OUR COLLEAGUE MR. |
| 00:12:06 | LAWSON TO INTRODUCE ONE OF OUR GUESTS THIS MORNING. |
| 00:12:08 | >> THANK YOU, CHAIRMAN DELAURO, FOR CONVENING US HERE TODAY. |
| 00:12:13 | I WANT TO COMMEND OUR LEADER, NANCY PELOSI, FOR RECOGNIZING WHAT AMERICANS HAVE ALL ACROSS THIS COUNTRY, THE PROBLEMS THAT THEY ARE TINKERING AT THE PUMP -- ARE INCURRING AT THE PUMP, AND IN HOME HEATING OIL AND AIR- CONDITIONING AS WE APPROACH THE SUMMER. |
| 00:12:32 | IT IS MY GREAT HONOR TO BE ABLE TO INTRODUCE GENE GUILFORD TODAY. |
| 00:12:37 | HE IS THE PRESIDENT OF THE INDEPENDENT CONNECTICUT PETROLEUM ASSOCIATION AND EDUCATION FOUNDATION. |
| 00:12:45 | I'VE HAD THE OPPORTUNITY TO WORK WITH GENE OVER THE YEARS AND A NUMBER OF HIS DEALERS COME TO UNDERSTAND IMPLICITLY THAT THE LAWS OF SUPPLY AND DEMAND HAVE BEEN SUSPENDED WHEN IT COMES TO OIL SPECULATION. |
| 00:13:01 | THEY HAVE BEEN AT THE FOREFRONT OF HELPING US SHAPE LEGISLATION FOR CONGRESSWOMAN DELAURO AND MYSELF. |
| 00:13:11 | I AM PROUD TO BE ABLE TO INTRODUCE HIM TODAY. |
| 00:13:14 | GENE HAS AN EXTENSIVE BACKGROUND, AND THE MEMBERS WILL FIND THIS MOST INTERESTING, THAT GENE WAS APPOINTED BY PRESIDENT REAGAN AND SERVED IN THE COMMERCE DEPARTMENT. |
| 00:13:26 | HE IS VERY FAMILIAR WITH IMPORT AND EXPORT COMMODITIES. |
| 00:13:30 | AND ALSO SERVED IN THE ENERGY DEPARTMENT AS WELL. |
| 00:13:33 | HE HAS FIRSTHAND UNDERSTANDING OF BOTH OF THE REGULATION THAT IS NEEDED AND ALSO OF OUR MARKETPLACE SYSTEM. |
| 00:13:42 | MOST IMPORTANTLY, WHAT HE UNDERSTANDS IS THE NEED OF CONSUMERS, AND THAT A RECENT PRESS CONFERENCE WITH CHRIS MURPHY AND MYSELF LAID OUT FOR THE PUBLIC WHAT IT IS THE BEST CASE IN TERMS OF THE NEED FOR US TO HAVE ONGOING REGULATION AND PROMOTION OF THE CFTC AND THE DODD-FRANK BILL. |
| 00:14:04 | WITH THAT, I TAUGHT OPPORTUNITY TO INTRODUCE -- MY PROUD OPPORTUNITY TO INTRODUCE GENE GUILFORD. |
| 00:14:15 | >> IT IS MY PLEASURE TO INTRODUCE OUR OTHER PANELISTS, MICHAEL GREENBERGER, WHO IS PROFESSOR AT THE UNIVERSITY OF MARYLAND LAW SCHOOL. |
| 00:14:27 | HE WORKED AS A TECHNICAL ADVISER TO THE UN COMMISSION OF EXPERTS ON REFORM OF THE INTERNATIONAL FINANCIAL SYSTEM. |
| 00:14:34 | HE ALSO PREVIOUSLY SERVED AS DIRECTOR OF THE TRADING AND MARKETS DIVISION AT THE COMMODITIES FUTURES TRADING COMMISSION, AND HE SERVED ON THE STEERING COMMITTEE OF THE PRESIDENT'S WORKING GROUP ON FINANCIAL MARKETS. |
| 00:14:46 | AND AS A MEMBER OF THE INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS HEDGE FUND TASK FORCE. |
| 00:14:52 | THANK YOU, MICHAEL, FOR BEING HERE8 -- -- AS WELL, MR. |
| 00:15:02 | GUILFORD. |
| 00:15:04 | WE WILL START WITH YOUR TESTIMONY. |
| 00:15:09 | >> [INAUDIBLE] >> MICROPHONE. |
| 00:15:12 | >> AND CHAIRWOMAN ROSA DELAURO FOR CONVENING OF THIS HEARING. |
| 00:15:17 | I WORKED WITH ALMOST EVERYBODY IN THIS MEETING, AND YOU HAVE BEEN GREAT FRIENDS OF CONSUMERS, AND YOU HAVE LANDED AN EAR TO THOSE OF US WHO DON'T HAVE THE CLOUT OF THE BIG WALL STREET LOBBYISTS. |
| 00:15:30 | MANY SAY THERE IS NO QUICK FIX FOR THIS. |
| 00:15:33 | I BELIEVE THERE IS A QUICK FIX FOR THIS, AND I AGREE WITH MANY OF THE POLICY PROPOSALS THAT ENUNCIATED, BUT I WOULD PRIORITIZE THREE OF THEM. |
| 00:15:42 | FIRST, LET ME SAY THAT YESTERDAY I READ THE "FINANCIAL TIMES," WHICH SURVEYS ALL THE WORLD MARKETS, AND WITHIN AN OPINION COLUMN, THE PIECES WAS THE UNITED STATES IS BACK LEADING THE WORLD'S ECONOMY. |
| 00:15:57 | EUROPE IS ON ITS BACK, JAPAN HAS BEEN ON ITS BACK, CHINA IS DECELERATING. |
| 00:16:03 | OUR POLICIES, WHICH HAVE BEEN GUIDED BY THE OBAMA ADMINISTRATION AND YOU IN CONGRESS, HAVE CREATED THE AMBER'S THAT ARE SPARKING A RECOVERY. |
| 00:16:15 | THE ONE THAT THING THAT WILL DAMAGE THIS RECOVERY IS THE EVER-ACCELERATING GASOLINE PRICES. |
| 00:16:24 | THEY ARE A BURDEN IN A MICRO SENSE IN THAT PEOPLE DON'T HAVE THE MONEY TO PAY FOR $4 AND MAYBE SOON $5 GASOLINE. |
| 00:16:34 | IT IS A PARCHER TO VIRTUALLY EVERY AMERICAN. |
| 00:16:37 | BUT MORE IMPORTANT IN A MACRO SENSE IS THIS WILL BREAK THE BACK OF THE RECOVERY. |
| 00:16:44 | THE PRESIDENT HAS SAID THAT, MANY OF YOU HAVE SAID THAT. |
| 00:16:48 | WITH EVERYTHING GOING SO WELL FOR US, WHY CAN'T WE FIX THIS PROBLEM? |
| 00:16:57 | MANY OFWOULD LIKE YOU TO BELIEVE THIS IS A SUPPLY AND DEMAND PROBLEM. |
| 00:17:01 | I CITED IN MY TESTIMONY AND MANY EXPERTS WHO SAY THAT SUPPLY AND DEMAND IS EQUILIBRIUM TO THE SAUDI KINGDOM SAID THEY WOULD INCREASE PRODUCTION BY 25% TO MAKE UP FOR ANY BOYCOTT OF THE IRANIAN OIL PRODUCT OR INTERFERENCE WITH THE STRAITS OF HORMUZ. |
| 00:17:18 | THE PRESIDENT HAS TALKED ABOUT RELEASING OIL FROM THE STRATEGIC PETROLEUM RESERVE. |
| 00:17:22 | BUT AS WAS SAID IN THE TESTIMONY, THE CHAIRMAN OF EXXONMOBIL HAS SAID THAT MARKET FUNDAMENTALS MEAN THAT OIL PRICES SHOULD BE $60 TO $70. |
| 00:17:36 | THEY ARE APPROACHING $105. |
| 00:17:38 | THEY HAVE BEEN UP TO $110. |
| 00:17:41 | WHY IS THIS HAPPENING IF THERE IS NO SUPPLY AND DEMAND PROBLEM? |
| 00:17:45 | DO NOT BELIEVE THOSE WHO TELL YOU IN THE FACE OF THE EXPERTS AND THE FACE OF THE SAUDI KING, IN THE FACE OF THE CHAIRMAN OF EXXONMOBIL, THAT THERE IS A SUPPLY-DEMAND PROBLEM. |
| 00:17:54 | WHAT IS THE PROBLEM? |
| 00:17:56 | IT IS GAMBLING BY WALL STREET ON THE PRICE OF OIL. |
| 00:17:59 | IT IS SIMILAR TO THE GAMBLING WALL STREET DID ON WHETHER OR NOT PEOPLE WOULD PAY FOR SUBPRIME MORTGAGES IN THE MORTGAGE MELTDOWN. |
| 00:18:10 | THEY COULD NOT PAY OFF THEIR DEBTS, AND ALL OF US WERE FORCED AS TAXPAYERS DICTATE TRILLIONS OF DOLLARS TO MAKE UP FOR WALL STREET'S BETS THAT THE SUBPRIME MARKET WOULD BE SUCCESSFUL. |
| 00:18:25 | NOW THEY ARE BETTING IN THE UPWARD DIRECTION OF THE PRICE OF OIL. |
| 00:18:31 | AGAIN, 60 EXPERTS IN MY TESTIMONY HAVE SAID, FROM YOUR REAL DER -- FROM NOURIEL ROUBINI, WHO FAMOUSLY PREDICTED A MELTDOWN, IRANIAN OIL EXPERTS, STANFORD, MIT -- IT IS EXCESSIVE THE SPECULATION, WHICH IS A FANCY WORD FOR SAYING THAT GAMBLERS WEARING WALL STREET SUITS HAVE TAKEN THESE MARKETS OVER AND ARE CONTROLLING THE PRICE AND CREATE INVESTMENT VEHICLES THAT ARE DESIGNED TO PUSH THE PRICE OF ALL I OUG -- PRICE OF OIL UP. |
| 00:19:09 | BY GAMBLING, BUT PLACING A BET, YOU DO NOT INCREASE OIL PRODUCTION, YOU DO NOT CREATE MARKET LIQUIDITY. |
| 00:19:16 | IT IS LIKE SAYING THAT LAS VEGAS CREATES A NATIONAL ECONOMIC WELL-BEING. |
| 00:19:20 | WE HAVE A LAS VEGAS EXPONENTIALLY ON THE STEROIDS MAKING BETS ON THE UPWARD DIRECTION OF OIL. |
| 00:19:32 | NOW, DODD-FRANK MADE IT, WITH YOUR LEADERSHIP, A VALIANT ATTEMPT TO DEAL WITH THIS, BUT WE WERE TO FIND IN THE WAY WE DEALT WITH THAT IN DODD-FRANK, BECAUSE WE DELEGATED ALL THE RESPONSIBILITY TO THE ADMINISTRATIVE PROCESS, WHICH IS OVERWHELMED WITH UNDER-THE- RADAR-SCREEN WALL STREET, 24 HOURS A DAY, SEVEN DAYS A WEEK, MILLIONS OF DOLLARS OF LYING. |
| 00:20:01 | I RECOMMENDATIONS FOR CONGRESS. |
| 00:20:05 | UNDER YOUR LEADERSHIP, THERE HAVE BEEN BILLS PASSED IN THIS DIRECTION. |
| 00:20:10 | LEADER POELOSI, WHEN YOU THE SPEAKER, CONGRESSWOMAN DELAURO, INTRODUCED A BILL TO STOP SPECULATION BUT IT PASSED THE HOUSE ORDER TO-19 THAT NIGHT. |
| 00:20:27 | -- IT PASSED THE HOUSE 401-19 THAT NIGHT. |
| 00:20:32 | WHEN OIL GOES OVER $4 NATIONWIDE, THIS WILL BE A BIPARTISAN ISSUE. |
| 00:20:38 | IT IS NOT A SUPPLY PROBLEM. |
| 00:20:41 | THE PRESIDENT SAID LAST WEEK -- AS HE HAS SAID, AS THE SAUDIS HAVE SAID, AS EXXONMOBIL HAS SET, A SUPPLY IS PLENTIFUL. |
| 00:20:52 | WE ARE A NET EXPORTER OF OIL. |
| 00:20:54 | IT IS THE GAMBLING THAT MUST BE STOPPED. |
| 00:20:57 | THE INVESTMENT VEHICLES THAT HAVE A FANCY NAMES OF THE COMMODITY INDEX SWAPS, SAID THAT EXCHANGE-TRADED FUNDS -- SYNTHETIC EXCHANGE-TRADED FUNDS, MUCH LIKE THE CREDIT DEFAULT SWAPS THAT LED TO THE MELTDOWN AT WALL STREET PROPAGATED AS INVESTMENTS BUT WERE RELEASED BETS ON WHETHER SUBPRIME MORTGAGES WOULD BE PAID OFF, HALF A TRILLION DOLLARS SENDING SIGNALS TO THE MARKET, FALSE SIGNALS, THAT THERE IS A SUPPLY PROBLEM. |
| 00:21:29 | ANYBODY WHO KNOWS THESE MARKETS AND ITS OBJECTIVE SAYS THAT THOSE FALSE SIGNALS ARE DAMAGING THE SUPPLY FUNDAMENTALS IN THIS MARKET. |
| 00:21:40 | THAT GAMBLING MUST BE STOPPED. |
| 00:21:42 | IT WILL NOT HAVE ANYTHING TO DO WITH PRODUCTION, NONE OF THAT MONEY GOES TO PRODUCTION, NONE OF IT GOES TO LIQUIDITY. |
| 00:21:50 | IT IS ALL CASINO GAMBLING AND NOTHING PRODUCTIVE. |
| 00:21:56 | SECOND, THE PRESIDENT NOW HAS TWICE WISELY SAID INCORRECTLY SAID THAT IT IS NOT A SUPPLY -- A MAN PROP WISE -- WISELY SAID AND CORRECTLY SAID THAT I. |
| 00:22:10 | T. IS NOT THE SUPPLY AND DEMAND PROBLEM, BUT THERE AREN'T MANIPULATIONS BY FINDING -- TRADERS -- THERE ARE MANIPULATIONS BY FINANCIAL TRADERS. |
| 00:22:22 | HE HAS ASKED FOR A PROSECUTORIAL INVESTIGATION. |
| 00:22:24 | HE DID THAT FIRST ON APRIL 21, 2011. |
| 00:22:27 | OIL AS AT $110. |
| 00:22:28 | AFTER HE MADE THAT ANNOUNCEMENT, WITHIN SIX MONTHS IT WAS $75. |
| 00:22:33 | BUT NOTHING HAPPENED AND NOW IT IS BACK AT $110 AGAIN. |
| 00:22:38 | NOW THE PRESIDENT HAS ASKED FOR THIS TASK FORCE. |
| 00:22:41 | I THINK ALL OF US, AND I T KNOW CONGRESSMAN VAN HOLLEN IS GATHERING -- ALL OF US HAVE TO WORK WITH THE DEPARTMENT OF JUSTICE TO EXPLAIN TO THEM THAT MANIPULATION OF THE OIL MARKETS IS NOT ONLY CRIPPLING THE AMERICAN CONSUMER, BUT IT THREATENS THE RECOVERY. |
| 00:23:04 | IF WE GO BACK TO RECESSION, THERE WILL NOT BE A SAFETY NET. |
| 00:23:08 | THERE WILL NOT BE AT TARP NEXT TIME. |
| 00:23:10 | THE AMERICAN PEOPLE DON'T HAVE A STOMACH FOR BAILING OUT BANKS. |
| 00:23:13 | IF WE DON'T HAVE A SAFETY NET, THAT MEANS NOT A RECESSION BUT A DEPRESSION. |
| 00:23:18 | WE ALL OUGHT TO EXPLAIN TO THE ATTORNEY GENERAL THAT THIS HAS GOT TO BE HIS NUMBER ONE INVESTIGATIVE PROCESS. |
| 00:23:23 | WHERE IS THE FBI? |
| 00:23:26 | WHERE ARE THE INTERVIEWS OF MARKET PARTICIPANTS? |
| 00:23:29 | WHERE ARE THE SUBPOENAS? |
| 00:23:30 | PRESIDENT OBAMA HAS FOCUSED ON THIS. |
| 00:23:34 | LET'S GET THESE GUYS GOING. |
| 00:23:37 | I ASSURE YOU, BECAUSE THE PRESIDENT'S THREAT IN APRIL 2011 DROVE THE PRICE DOWN ALMOST $40, IF THERE IS A REAL INVESTIGATION, JUST THE APPEARANCE OF IT WILL CAUSE THESE COCKROACHES TO SCATTER BECAUSE THE LIGHT WILL BE TURNED ON. |
| 00:23:55 | THEY DON'T WANT TO GO TO JAIL. |
| 00:23:59 | THEY THINK THEY ARE NOT GOING TO GO TO JAIL, THEY WILL KEEP DAMAGING AND THE AMERICAN ECONOMY. |
| 00:24:04 | FINALLY -- YOU SAID THIS MAY BE THE HARDEST THING TO DO, BUT THE AMERICAN PUBLIC MUST UNDERSTAND THAT THE COMMODITY FUTURES TRADING COMMISSION -- PROBABLY FEW OF THEM KNOW WHAT THAT IS -- IS THE, ON THE BEAT THAT CAN STOP THIS PROBLEM. |
| 00:24:21 | UNDER THE LEADERSHIP -- IS THE COP ON THE BEAT THAT CAN STOP THIS PROBLEM C. |
| 00:24:29 | UNDER THE LEADERSHIP OF CHAIRMAN GANSLER THEY HAVE DONE AN AMAZING JOB, BUT THEY ARE UNDERFUNDED. |
| 00:24:36 | FOR A MULTIBILLION-DOLLAR MARKET, THEY HAVE A 700 EMPLOYEES. |
| 00:24:42 | ANOTHER $100 MILLION TO STOP THE ECONOMY SPINNING INTO A DEPRESSION. |
| 00:24:49 | THAT IS A VERY SMALL AMOUNT OF MONEY. |
| 00:24:52 | THE CFTC HAS TO BE FULLY FUNDED. |
| 00:24:54 | IF THEY ARE FULLY FUNDED, WE DON'T NEED AN INTERAGENCY TASK FORCE. |
| 00:25:01 | THEY WOULD HAVE RESOURCES TO BRING THESE MANIPULATION CASES. |
| 00:25:05 | THEY MARKETING MANIPULATION CASES, BUT THEY DON'T HAVE THE FBA, THEY DON'T HAVE THE NECESSARY INVESTIGATIVE POWER. |
| 00:25:13 | WE NEED TO FUND THAT AGENCY. |
| 00:25:18 | >> THANK YOU VERY MUCH, PROFESSOR GREENBERGER. |
| 00:25:20 | MR. |
| 00:25:21 | GUILFORD. |
| 00:25:22 | >> GOOD AFTERNOON. |
| 00:25:26 | LEADER PELOSI, CONGRESSWOMAN DELAURO, MY FRIENDS FROM CONNECTICUT, THANK YOU FOR INVITING ME BEFORE THE COMMITTEE. |
| 00:25:38 | LET ME VERY BRIEFLY TAKE YOU THROUGH WHAT I BELIEVED TO BE AN IMPORTANT PART OF THE HISTORY OF WHAT WE AND GOING THROUGH, BECAUSE IT WAS IN 2004 THAT WE FIRST CAME AND VISITED CONGRESSMENAN LARSON AND ASKED IF HE WOULD BE WILLING TO JOIN HIS COLLEAGUES IN INITIATING A GOVERNMENT ACCOUNTABILITY STUDY OF THE FINDINGS OF THE CFTC AND FIND OUT WHAT IS GOING ON IN COMMODITY MARKETS. |
| 00:26:02 | IT WAS BY THEN THAT WE WERE BECOMING UNSETTLED AND CONCERN ABOUT WHAT WAS GOING ON IN THE MARKETS, THE VOLATILITY AND PRICE INCREASES. |
| 00:26:10 | IT WAS TWO YEARS LATER THAT WEEK AT THE REPORT BACK THAT SAID THAT WE THINK THERE'S SOMETHING GOING ON AND WE THINK THIS IS IMPORTANT BUT WE CANNOT TELL YOU BECAUSE THE LAW HAS EFFECTIVELY BLINDED THE AGENCY THAT IS RESPONSIBLE FOR ENFORCING THIS LAWS. |
| 00:26:23 | IN 2008, LEADER PELOSI, WE CAME VERY CLOSE IN BEING ABLE TO CLOSE THE LOOPHOLE AND MOVE THIS ISSUE DOWN THE ROAD. |
| 00:26:34 | YOU REMEMBER 2008 VERY WELL BECAUSE IT WAS AN EXPERIENCE WE WON'T FORGET. |
| 00:26:37 | IT WAS AT THAT TIME THAT THE SECRETARY OF THE TREASURY AND AT THE CHAIRMAN OF THE FEDERAL RESERVE CAME TO YOU AND SAID THAT IF YOU DON'T PASS A PIECE OF LEGISLATION IN A COUPLE OF DAYS, THE AMERICAN ECONOMY IS GOING TO GO OVER THE EDGE. |
| 00:26:51 | IT WAS ON THE BASIS OF THE REASON WHY THAT WAS THE CASE, WALL STREET'S RECKLESS AND IRRESPONSIBLE BEHAVIOR THAT LED TO THAT POINT, THAT WE ENDED UP MOVING THE POLICY A LITTLE FURTHER DOWN THE ROAD WITH DODD- FRANK. |
| 00:27:07 | NOW, WHERE WE ARE TODAY WITH RESPECT TO CONNECTING THE DOTS BETWEEN WALL STREET AND THE GAS PUMP IS, FOR US, VERY CLEAR. |
| 00:27:18 | . I WOULD LIKE TO ILLUSTRATE THAT YOU IN THE MATERIAL I HANDED OUT TO YOU. |
| 00:27:24 | WALL STREET GASOLINE CONTRACT IS 8786INCREASED 86 GAS A GALLON IN THE LAST NINE DAYS. |
| 00:27:38 | $25 MILLION A WEEK. |
| 00:27:41 | THE CITIZENS OF CONNECTICUT PAY MORE FOR GASOLINE TODAY THAN THEY DID IN THE MIDDLE OF DECEMBER. |
| 00:27:47 | TO PUT THAT INTO CONTEXT, FOR THE CHARTS WE HAVE PROVIDED FOR YOU, NOW WE'RE AT 92 CENTS BY VIRTUE OF THE FACT WE HAD A SIX- CENT INCREASE JUST LAST NIGHT AFTER I PREPARED THIS FOR DELIVERY HERE TODAY. |
| 00:28:02 | AT 11 BILLION GALLONS A MONTH THAT AMERICANS CONSUME IN GASOLINE, AMERICANS TODAY ARE PAYING $10 BILLION -- $10 BILLION MORE FOR GASOLINE THAN THEY WERE PAYING IN THE MIDDLE OF DECEMBER. |
| 00:28:18 | WHEN THE CONTEXT OF THE PROFS GREENBERGER'S STATEMENTS WITH HOW MUCH WE SHOULD BE FINDING AN AGENCY OF THE FEDERAL GOVERNMENT FOR THE PURPOSE OF OVERSEEING THESE MARKETS, IT IS COSTING THE AMERICAN CONSUMER THIS AMOUNT OF MONEY JUST WITHIN THE SCOPE OF 90 DAYS -- 90 DAYS -- IT IS EXTRAORDINARY. |
| 00:28:40 | NOW, WHAT COULD POSSIBLY HAVE HAPPENED IN THE LAST 90 DAYS TO HAVE CAUSED THIS PROBLEM? |
| 00:28:46 | DID I HURRICANES GO THROUGH THE GULF OF MEXICO? |
| 00:28:49 | WAS THERE A MASSIVE SHUTDOWN OF REFINERIES AROUND THE WORLD? |
| 00:28:54 | DID ISRAEL ATTACK IRAN? |
| 00:28:58 | IN THE ABSENCE OF ANYTHING THAT ANYONE CAN POINT TO, A TAX ON THE AMERICAN PUBLIC OF $10 BILLION PER MONTH HAS BEEN ENACTED AS A RESULT OF WHAT HAS GONE ON WALL STREET SINCE THE MIDDLE OF DECEMBER. |
| 00:29:13 | WITH DUE RESPECT TO ANYONE WHO CHOOSES TO BLAME THIS ON INDIA AND CHINA, WE DID IN JUST DISCOVERED INDIA AND CHINA -- CHRISTMAS -- WE DIDN'T JUST DISCOVER INDIA AND CHINA THE WEEK BEFORE CHRISTMAS. |
| 00:29:26 | THAT IS WHAT HAS HAPPENED SINCE THE MIDDLE OF DECEMBER. |
| 00:29:30 | SPECULATORS HAVE OVERTAKEN THE COMMODITY MARKETS. |
| 00:29:33 | 10 YEARS AGO, ACTUAL PRODUCERS AND USERS OF ENERGY AND AGRICULTURAL COMMODITIES MADE UP 70% TO 80% OF THE MARKETS, WITH ONLY 20% TO 30% OF THE MARKETS MADE UP BY SPECULATORS. |
| 00:29:45 | NOW THIS HAS FLIPPED AND 70% TO 80% OF THE COMMODITY MARKETS ARE CONTROLLED BY FINANCIAL INDUSTRY SPECULATORS, ONLY 20% TO 30% OF THESE MARKETS ARE ACTUAL, LEGITIMATE HEDGERS OF PURCHASES OF ENERGY AND AGRICULTURAL COMMODITIES. |
| 00:30:01 | SIX YEARS AGO, WALL STREET BROUGHT UP COMMODITY INDEX FUNDS, RESULTING IN A BIRDS OF A $400 BILLION OF STRICTLY SPECULATIVE INVESTMENTS IN COMMODITY MARKETS, AND THAT IS CONTRIBUTING TO THE PRICE OF FOOD AND ENERGY PRICES. |
| 00:30:16 | IF I COULD, I WOULD LIKE TO READ YOU SOME OF THE PROMOTIONAL MATERIAL FOR THE COMMODITY INDEX FUNDS. |
| 00:30:23 | "WHEN TRADING FUTURES, YOU NEVER ACTUALLY BUY OR SELL ANYTHING TANGIBLE. |
| 00:30:29 | YOU ARE JUST CONTRACT AND TO DO SO AT A FUTURE DATE. |
| 00:30:32 | YOU'RE TAKING IT BUYING OR SELLING POSITION AS A SPECULATOR EXPECTING TO PROFIT FROM RISING OR FALLING PRICES. |
| 00:30:38 | YOU HAVE NO INTENTION OF MAKING OR TAKING DELIVERY OF THE COMMODITY YOU ARE TRADING. |
| 00:30:45 | " LET ME REPEAT THAT -- THIS COMES ON THE PEOPLE WHO SELL THESE THINGS -- "YOU HAVE NO INTENTION OF MAKING OR TAKING DELIVERY OF THE COMMODITY YOU ARE TRADING. |
| 00:30:57 | YOUR ONLY GOAL IS TO BUY LOW AND SELL HIGH, OR VICE VERSA. |
| 00:31:01 | BEFORE THE CONTRACT EXPIRES, YOU WILL NEED TO LEAVE YOUR CONTRACTUAL OBLIGATION," WHICH IS WHERE WE GET INTO THE BUSINESS OF RULING CONTRACTS MONTH TO MONTH, "BY OFFSETTING YOUR INITIAL POSITION. |
| 00:31:16 | " THE COMMODITY MARKETS ARE OVERSEEN BY THE CFTC, WHO PASSED REGULATIONS TO RESTRAIN SICKLYSTRICTLY FINANCIAL SPECULATION IN THESE MARKETS. |
| 00:31:33 | THE FINANCIAL INDUSTRY HAS FILED SUIT AGAINST THE CFTC IN FEDERAL COURT, SAYING THAT THESE MASSIVE PRICE INCREASES -- THEY DON'T BELIEVE THAT THESE RULES ARE NECESSARY OR APPROPRIATE. |
| 00:31:45 | TO THE AMERICANS WHO ARE PAYING $10 BILLION A MONTH MORE FOR GASOLINE, AND TELL THEM THESE RULES ARE NOT NECESSARY. |
| 00:31:56 | THE FINANCIAL SERVICES INDUSTRY DROVE AMERICAN NEARLY INTO ANOTHER GREAT DEPRESSION IN 2008, FROM WHICH WE ARE ONLY NOW BEGINNING TO EMERGE. |
| 00:32:04 | CONGRESS PASSED THE DODD-FRANK LAW TO REGULATE THE RECKLESS AND IRRESPONSIBLE BEHAVIOR ON WALL STREET, AND THAT LAW AND ALL OF THE AGENCIES RESPONSIBLE FOR IMPLEMENTING LAW NEED TO BE STRONGLY SUPPORTED. |
| 00:32:15 | THE LAW NEEDS TO BE ALLOWED TO WORK FOR THE AMERICAN PEOPLE. |
| 00:32:19 | ESPECIALLY BEFORE IT IS THINK IT WITH ANY FURTHER. |
| 00:32:23 | IN THE TWO CHARTS I PROVIDED, WHICH I WOULD LIKE TO BRIEFLY COVER, BECAUSE THERE ARE SOME EXCUSES GOING ON THAT THE INCREASE IN GASOLINE PRICES IS ALL DUE TO CRUDE OIL. |
| 00:32:32 | IF YOU LOOK AT A PRICE OF CRUDE OIL BETWEEN MID-DECEMBER AND THE MIDDLE OF MARCH, IT MIGHT FROM $94 A BARREL TO $106 TO $12 A BARREL INCREASE. |
| 00:32:41 | 42 GALLONS A BARREL, UP 2 CENTS A GALLON OF INCREASE IN REFINED PRODUCTS BUT $S. |
| 00:32:55 | $12.24. FLIP OVER TO THE NEXT CHART. |
| 00:32:58 | YOU WILL SEE WHAT HAPPENED BETWEEN THE MIDDLE OF DECEMBER AND MARCH 28. |
| 00:33:04 | WHEN FROM TO 48-- WENT FROM 2. |
| 00:33:11 | 48 TO 3. |
| 00:33:14 | 40 IN 90 DAYS. |
| 00:33:15 | WHAT CAUSED THE OTHER 68 CENTS A GALLON TO BE ADDED TO THE COST OF A GALLON OF GASOLINE ON THE NEW YORK MERCANTILE EXCHANGE? |
| 00:33:24 | IT HAS GONE UP EVERY SINGLE DAY, STEADILY EVERY DAY SINCE THE MIDDLE OF DECEMBER. |
| 00:33:29 | NOT BEFORE DECEMBER, BUT SINCE THE MIDDLE OF DECEMBER. |
| 00:33:47 | PERSONALLY, WITH REGARD TO THE 28 COMMODITIES COVERED BY THE COMMODITY FUTURES TRADING COMMISSION'S RULE, WE THINK THAT THE ENERGY AND AGRICULTURAL COMMODITIES ARE SO IMPORTANT TO THE PEOPLE OF THIS COUNTRY THAT THEY SHOULD BE 100% DELIVERABLE. |
| 00:34:10 | THAT IS TO SAY WE DON'T FIND ANY REASON WHY THIS GAME OF WALL STREET PLACING BETS ON MOVEMENTS OF THESE PRODUCTS -- YOU HAVE NO INTENTION OF MAKING OR TAKING DELIVERY OF A COMMODITY YORK TRADING. |
| 00:34:24 | IF YOU HAVE NO INTENTION OF TAKING OR MAKING DELIVERY OF THE COMMODITY YOU ARE TRADING, YOU SHOULDN'T BE ALLOWED TO PARTICIPATE IN THE MARKET. |
| 00:34:32 | WHAT WE'RE TALKING ABOUT HERE IS THE FOOD THAT AMERICANS BUY AND ENERGY WE RELY ON TO RUN OUR ECONOMY. |
| 00:34:45 | AS OTHERS HAVE SAID TODAY, WE STRONGLY SUPPORT AT FUNDING FOR THE COMMODITY FUTURES TRADING COMMISSION AND REJECT PROPOSALS TO CUT THEIR FUNDING, WHAT G ONLYUTS -- THE AGENCY -- WHICH ONLY GUTS THE AGENCY'S ABILITY TO ENFORCE THIS LAW. |
| 00:35:09 | REMEMBER, 20, DISCOVERED BY THE POSITION LIMITS RULE IS ENERGY AND FOOD. |
| 00:35:13 | WE ALSO FOR THE SUPPORT REVITALIZING THE DEPARTMENT OF JUSTICE TASK FORCE ON SPECULATION STARTED ON JULY 2011, SOMETHING THE DEPARTMENT OF JUSTICE INDICATES IT WILL BEGIN IMMEDIATELY. |
| 00:35:27 | I SHARE PROFESSOR GREENBERGER'S SENTIMENTS THAT IF YOU SHINE LIGHT ON THE NEED FOR SOMETHING, THE BEAVER IS LIKELY TO CHANGE. |
| 00:35:36 | THERE IS NO REASON NOT TO BEGIN A -- TODAY. |
| 00:35:38 | THE BEHAVIOR IS LIKELY TO CHANGE. |
| 00:35:41 | THERE IS NO REASON NOT TO BEGIN THAT TODAY. |
| 00:35:43 | >> THANK YOU VERY MUCH FOR A VERY COMPELLING TESTIMONY. |
| 00:35:48 | AND THE REAL CLARITY OF THE THOUGHT AND CAN ORDER IT WITH THAT, -- THANK YOU VERY MUCH FOR THE VERY COMPELLING TESTIMONY AND THE REAL CLARITY OF THOUGHT AND CANDOR. |
| 00:36:00 | WE WILL HOLD TO A FIVE MINUTE RULE HERE TO BE ABLE TO GET EVERYBODY IN TO ASK QUESTIONS OF PANELISTS TODAY. |
| 00:36:08 | >> BAGGIO. |
| 00:36:09 | I THINK THE FACT THAT MANY OF US ARE HERE IS AN INDICATION THAT WE MAY NOT BE IN SESSION, BUT THIS CONGRESS SHOULD REALLY BE SO. |
| 00:36:25 | THE REPUBLICANS -- THEY SUPPORT A FREE MARKET EVEN WHEN IT IS RIGGED. |
| 00:36:37 | WE ARE HERE TO TRY TO PROBE THIS. |
| 00:36:41 | YOU MAKE SUCH A COMPELLING CASE AS TO HOW MUCH THE SPECULATION IS -- I THINK BOTH OF YOU HAVE SAID ESSENTIALLY A IN TERMS OF THESE DERIVATIVES THEY MAY BE 80% SPECULATION AND 20% RESPONSE TO A REAL NEED. |
| 00:37:04 | LET ME JUST ASK YOU, ASSUMING THAT IS TRUE, AND THERE IS MUCH EVIDENCE THERE IS, HOW -- IF WE RAN THE SHOW, AND I WISH WE DID, HOW WOULD WE PASS LEGISLATION THAT WOULD GET AT THE SPECULATION BUT PERMIT WHERE THERE WAS AN EFFORT TO HEDGE AGAINST AN INCREASE AND TAKE CONTROL OF THE PRODUCT? |
| 00:37:35 | THAT IS THE LINE YOU DRAW. |
| 00:37:37 | HOW WOULD WE DO THIS REALISTICALLY? |
| 00:37:41 | EVENI THINK THAT IF THERE MAY BE SOME DEAF EARS HERE, WE NEED TO SHOUT LOUDLY AND PERSUASIVELY. |
| 00:37:49 | DESIGN A PROPOSAL THAT WOULD GET AT THIS. |
| 00:37:56 | >> [INAUDIBLE] -- NEW DEAL CONGRESS, WHICH THEY PASSED TO PROTECT FARMERS FROM EXCESSIVE SPECULATION. |
| 00:38:03 | ESSENTIALLY, THE DESIGN IS NOT TO -- THE CRITICAL WORD IS "EXCESSIVE" SPECULATION, NOT SPECULATION. |
| 00:38:13 | IN FACT, SPECULATION IS NEEDED FOR THE FARMER, THE PETROLEUM PRODUCER, TO CREATE LIQUID MARKETS WHERE CONTRACTS CAN BE QUICKLY TRADED. |
| 00:38:21 | BUT AS WITH A FUNCTIONING MARKET IS 70% COMMERCIAL, 30% OF SPECULATIVE. |
| 00:38:29 | THE MARKETS ARE NOW 80% SPECULATIVE, 20% COMMERCIAL. |
| 00:38:33 | COMMERCIALS DON'T WANT TO BE IN THIS MARKET ANYMORE BECAUSE IT IS SO VOLATILE. |
| 00:38:40 | THEY CANNOT CONTROL THE PRICE OF MARCH AND BECAUSE THE CONTRACT SHOULD STOP AND THEIR LIFE SAVINGS MAY GO IN THE MARGIN. |
| 00:38:46 | THIS IS ALL SPECULATION. |
| 00:38:48 | THE TWO VEHICLES THAT MANY AGREE -- I PROVIDED ALL THE STUDIES ON THIS -- THAT THE SPECULATORS USE THAT ARE THE QUICKEST, DIRTIEST WAY TO GET INTO THIS MARKET ARE THE COMMODITY INDEX SWAP FUNDS AND THE SYNTHETIC EXCHANGE TRADED FUNDS. |
| 00:39:05 | DON'T WORRY ABOUT A FANCY TITLE. |
| 00:39:09 | WHAT DOES THAT MEAN? |
| 00:39:10 | HE WALKED INTO YOUR BANK -- YOU WALK INTO YOUR BANK AND SAY, "I DON'T WANT TO BUY THIS STUFF. |
| 00:39:19 | I DON'T EVEN KNOW WHAT CRUDE-OIL LOOKS LIKE IT BUYOU ADVISE ME THAT THE PRICES GOING UP SO HERE'S MY MONEY AND I WANT DOLLAR FOR DOLLAR EVERYTHING OF THE UPWARD PRICE. |
| 00:39:35 | " THOSE WALL STREET OPERATIONS ARE LIKE BOOKIES. |
| 00:39:37 | THEY HAVE TO HEDGE THEIR EXPOSURE JUST LIKE A BOOK THE LAYS OFF BETS WHEN IT GETS A ONE-SIDED. |
| 00:39:46 | THEY GO INTO THE REAL FUTURES MARKET, WHERE THE FARMER AND BAKER ARE TRYING TO HEDGE PRICES, AND THEY BUY LONG OIL CONTRACTS SO ON PAPER THEY HAVE CONTRACTS THAT ARE 33 TIMES THE SIZE OF THE REAL SUPPLY OF OIL. |
| 00:40:04 | THAT SENDS A SIGNAL OUT THAT CANNOT BE DEFEATED THAT THERE IS A SUPPLY PROBLEM AND THERE ISN'T. |
| 00:40:14 | YOU CAN'T CUT THIS SNAKE OFF AT ITS HEAD BY SAYING "NO MORE BETTING ON THESE MARKETS. |
| 00:40:25 | " THESE ARE NOT COMMERCIALS MAKING THESE DEBTS. |
| 00:40:28 | UNFORTUNATELY, I HATE TO TELL YOU THIS, THEY ARE PENSION FUNDS, PRIVATE EQUITY COMPANIES, HEDGE FUNDS, BANKS. |
| 00:40:36 | ALL THEY ARE DOING IS LIKE WALKING INTO A BOOKIE SHOP SAYING, "I DON'T WANT TO ON THIS STUFF, I JUST WANT TO BET. |
| 00:40:47 | " YOU CANNOT BET THAT THE PRICE WILL GO UP TO, ONLY THAT IT WILL GO DOWN. |
| 00:40:54 | >> THE LOSERS ARE THE AMERICAN PEOPLE. |
| 00:40:58 | >> THEY ARE CONTINUALLY TOLD IT IS A SUPPLY AND DEMAND PROBLEMS . |
| 00:41:05 | THE CEO OF EXXONMOBIL SAYS $60, $70 A BARREL -- IT IS $110 NOW. |
| 00:41:11 | THE SAUDI KING SAYS YOU ARE WORRIED ABOUT BLOCKING THE STREETS OF HORMUZ? |
| 00:41:16 | WE WILL MAKE UP A BARREL FOR A BARREL EVERYTHING THAT WILL BE LOST. |
| 00:41:19 | BY THE WAY, IN 1973, WHEN OPEC CUT OFF THE WEST FROM ALL OF ITS OIL, WORSE THAN THE BLOCKAGE OF THE STRAITS OF HORMUZ, THERE WAS A FRACTION OF THE VOLATILITY WE ARE SEEING TODAY, AND I CAN GIVE YOU CHARTS THAT SHOW THAT. |
| 00:41:36 | IN APRIL 2011, IT WAS THE ARAB SPRING. |
| 00:41:41 | LIBYA'S 2% PRODUCTION OF OIL IS CAUSING THIS SPIKE, AND THE SAUDIS AGAIN SAID WE WILL MAKE UP THE 2%. |
| 00:41:49 | THE PRESIDENT SAID THIS IS NOT SUPPLY AND DEMAND, THIS IS MARKET MANIPULATION, AND HE WAS RIGHT. |
| 00:41:55 | WHAT ARE YOU STOPPING HERE? |
| 00:41:59 | ARE YOU STOPPING MONEY FROM GOING INTO PRODUCTION? |
| 00:42:00 | ARE YOU STOPPING MONEY FROM PEOPLE CREATING JOBS? |
| 00:42:03 | UNLESS YOU THINK A CASINO, WHICH COMES TO US WITH NAMES LIKE GOLDMAN SACHS AND MORGAN STANLEY ARE JOB CREATORS -- NO, YOU ARE STOPPING BETTING. |
| 00:42:20 | IF WE ARE WRONG ABOUT THIS, IF EVERYTHING WE'RE TELLING YOU IS A MISTAKE, WHAT WILL WE HAVE DONE IF WE STOPPED THE BEDDING? |
| 00:42:27 | WE WILL CLOSE A COUPLE OF CASINOS. |
| 00:42:29 | BUT WE NEED, ANY TIME THERE HAS BEEN A THREAD -- 2008, YOU GUYS PASSED A BILL TO HUNDRED 88-133 TO STOP THE BACKING -- 288-133 TO STOP THE BETTING. |
| 00:42:46 | IS THAT A SUPPLY AND DEMAND RESPONSIBILITY? |
| 00:42:49 | THEN WHEN PEOPLE SAID THAT WE GOT THE PRICE DOWN TO $30, IT SHOT BACK UP TO 75 BY THE SPRING OF 2009 BUT THEN YOU GUYS SAID THAT WE WOULD PASS DODD- FRANK. |
| 00:43:00 | WHEN DODD-FRANK APPEARS TO BE WORKING BECAUSE OF WALL STREET LOBBYING AND LAWSUITS, THE PRICE OF OIL IS BACK UP AGAIN. |
| 00:43:08 | STOP GAMBLING. |
| 00:43:09 | I CAN TELL YOU YOU WILL BRING THE PRICE OF OIL DOWN SUBSTANTIALLY, AND ALL YOUR CONSTITUENTS WHO ARE IN HEARTBREAKING SITUATIONS, WHETHER IT IS GASOLINE, HEATING OIL, ANY DERIVATIVE CRUDE OIL, WILL FIND COMFORT. |
| 00:43:27 | AND WE WILL KEEP THE RECOVERY GOING AND MAKE THE UNITED STATES WHAT IT IS FOR THE FIRST TIME IN DECADES, A LEADER IN WORLD ECONOMIC GROWTH. |
| 00:43:36 | >> THANK YOU VERY MUCH. |
| 00:43:39 | >> THANK YOU. |
| 00:43:41 | LET ME ASK MY COLLEAGUE FROM MARJAH ISLAND FOR THE NEXT QUESTION. |
| 00:43:46 | -- FROM RHODE ISLAND FOR THE NEXT QUESTION. |
| 00:43:52 | >> THIS IS OF GREAT IMPORTANCE TO MY STATE. |
| 00:44:00 | FOR ISLAND HAS THE SECOND HIGHEST UNEMPLOYMENT RATE IN THE COUNTRY. |
| 00:44:05 | -- RHODE ISLAND HAS THE SECOND-HIGHEST AND LIMIT RATE IN THE COUNTRY. |
| 00:44:09 | WHEN YOU HEAR YOUR TESTIMONY TODAY, AND WE HAVE SEEN SO MUCH IN THE RESEARCH THAT SO MUCH IS DRIVEN BY WHAT SOUNDS DANGEROUSLY REMINISCENT OF WHAT WE HEARD OR RWANDA IN THE MORTGAGE GROUP OF MARKET AND THE WAY IT BROUGHT OUR -- HEARD OR WERE WARNED ABOUT IN THE MORTGAGE TO GIVE THE MARKET AND THE WAY IT BROUGHT OUR FAMILIES, THE WAY IS REPEATING ITSELF IS REALLY INFURIATING. |
| 00:44:36 | THERE IS A PIECE OF LEGISLATION THAT HAS BEEN INTRODUCED ON THE SENATE SIDE BY SENATOR BERNIE SANDERS AND SENATOR KLOBUCHAR AND SENATOR FRANK ANDEN THAT SEEMS TO ME THE REQUIRED THE CFTC WITHIN 14 DAYS TO SET ABOUT WITH IDENTIFYING THE MAGNITUDE OF THE SPECULATION AT ALSO TO SET ABOUT ADDRESSING IT IMMEDIATELY. |
| 00:45:00 | I'M WONDERING WHETHER THAT APPROACH MAKES SENSE AND WHETHER THE RATIO YOU ARE SPEAKING ABOUT THE UPSIDE DOWN CAN BE CORRECTED, AND WHAT ARE THE OBSTACLES TO THAT HAPPENING IS THAT LEGISLATION WERE ENACTED BY THE CONGRESS OF THE UNITED STATES? |
| 00:45:16 | >> LET ME SAY THAT THAT LEGISLATION IS LEGISLATION THAT YOU PEOPLE PASSED ON JUNE 26, 2008, WHEN OIL WENT TO IT WILL RECORD PRICE, WHICH WAS FORCING THE CFTC TO DECLARE AN EMERGENCY IN THE MARKET AND HOPING THAT THEY WOULD LIMIT SPECULATION BOTH BY FLAT LIMITS ON SPECULATION AND BY INCREASING MARGINS SPECULATORS HAVE TO PAY. |
| 00:45:40 | I THINK THAT IS A GOOD IDEA. |
| 00:45:44 | BUT IF YOU GUYS WANT TO KILL THE BEAST, IF YOU WANT TO HELP CONSTITUENTS, DON'T DELGATE THIS OUT TO AN OPAQUE ADMINISTRATIVE PROCESS WHERE WALL STREETERS ARE MEETING -- BY THE WAY, THE CFTC WILL MEET WITH ANYBODY, BUT THE CONSUMERS DON'T HAVE THE MONEY TO GO DOWN THERE 24 HOURS A DAY, SEVEN DAYS A WEEK, AND THEY DON'T HAVE THE MONEY TO FIGHT THESE THINGS IN COURT WHERE THE WALL STREETERS HAVE HIRED THE FANCIEST LAW FIRMS, THE BIGGEST APPELLATE FIRMS, AND I CAN TELL YOU, AND GENE GUILFORD CAN TELL YOU, WE CANNOT MATCH THAT MANY DOLLAR FOR DOLLAR. |
| 00:46:31 | THE CFTC IS THE VERY AGENCY THAT YOU GUYS KNOW DON'T HAVE THE FUNDING FOR THIS. |
| 00:46:36 | I WOULD DO IT YOURSELF. |
| 00:46:38 | YOU CAN PASS LEGISLATION BANNING COMMODITY INDEX SWAPS AND EXCHANGE TRADED FUNDS, AND YOU WILL REMOVE $500 TRILLION FROM THE MARKET. |
| 00:46:50 | THEY WILL COME TO YOU, THE BANKS WILL COME TO YOU AND SAY, "OH, YOU ARE GOING TO LIMIT PRODUCTION, YOU WILL LIMIT LIQUIDITY. |
| 00:47:01 | " THE MARKET IS OVERRUN WITH LIQUIDITY. |
| 00:47:04 | 80% OF IT IS SPECULATION. |
| 00:47:06 | WHAT YOU WILL BE DOING IS STOPPING GAMBLING, PURE AND SIMPLE. |
| 00:47:12 | MONEY ONLY CREATING HOMES IN THE HAMPTONS AND YACHTS IN THE HAMPTONS. |
| 00:47:19 | YOUR CONSTITUENTS SHOULD KNOW THAT EVERY TIME THEY BREAK THEIR PART BY BUYING $4 AND MAYBE SOON FIVE OTHER GASOLINE, THAT MONEY ISN'T GOING INTO PRODUCTION, IT IS GOING INTO HOME BUILDING IN THE HAMPTONS AND YACHT-BUILDING IN THE HAMPTONS. |
| 00:47:37 | IT IS NOT A CONSTRUCTIVE ECONOMIC THINKG. |
| 00:47:43 | FRANKLY, I WILL TELL YOU SOMETHING -- THAT BILL GETS INTRODUCED. |
| 00:47:48 | WHAT WILL IT SAY TO THE SPECULATORS? |
| 00:47:50 | HEY, I WILL HAVE TO GET OUT OF THIS MARKET, I WILL GET OUT BEFORE THERE IS A PANIC. |
| 00:47:55 | I WILL UNDERMINE IT NOW. |
| 00:47:57 | THAT IS WHAT HAPPENED IN 2008. |
| 00:48:00 | SENATOR REID GOT 51 VOTES IN THE SENATE WHERE MANY DEMOCRATS WERE OUT CAMPAIGNING FOR PRESIDENT AND A LOT OF REPUBLICANS SUPPORTED HIM. |
| 00:48:10 | SPECTATORS SAID TO THEMSELVES, "ALL, MY GOD, THESE GUYS ARE SERIOUS. |
| 00:48:15 | " BUT THEN NOTHING HAPPENED. |
| 00:48:22 | >> MR. |
| 00:48:23 | GUILFORD, LET ME ASK YOU TO COMMENT, IF YOU WOULD. |
| 00:48:27 | >> I THINK THAT THE SENATOR'S BILL IS A GREAT START. |
| 00:48:33 | REMEMBER THAT THE COMMODITY FUTURES TRADING COMMISSION'S POSITION LIMITS RULE WAS INITIALLY DESIGNED TO DO EXACTLY WHAT WE'RE TALKING ABOUT TODAY DID UNFORTUNATELY, AT LEAST INITIALLY, ITS LIMITS WERE SET SO EXTRAORDINARILY HIGH AS TO BE NOT TERRIBLY EFFECTIVE. |
| 00:48:48 | IT IS GOING TO TAKE TIME FOR THEM TO BE ABLE TO COLLECT THE DATA NECESSARY TO MAKE SURE THEY ARE SETTING LIMITS IN THE RIGHT PLACE, IN THE RIGHT WAY, AND TO MAKE SURE IT IS THE MOST EFFECTIVE. |
| 00:48:58 | THAT IS THE ADMINISTRATIVE PROCESS THAT PROFESSOR GREENBERGER TALKS ABOUT WILL TAKE SO LONG. |
| 00:49:04 | AND COUPLED WITH THAT, UNDERSTAND THAT THE FINANCIAL SERVICES INDUSTRY HAS MADE IT CLEAR THAT IT WILL LITIGATE EVERY SINGLE ONE OF THESE RULES THAT COMES OUT OF EVERY SINGLE ONE OF THESE AGENCIES FOR AS LONG AS IT TAKES, BECAUSE THEY NO THEY ARE PLAYING FOR TIME, EAGER FOR A TIME IN THE CHANGE OF THE PRESIDENCY OR A CHANGE IN THE MAKEUP OF THE CONGRESS. |
| 00:49:26 | THEIR INTENTIONS ARE CLEAR -- GUT THE AGENCY'S BUDGET SO THAT THE LAWS CANNOT BE ENFORCED, LITIGATE THE RULEMAKING PROCESS IS TO DRAW THEM OUT AS FAR AS POSSIBLE. |
| 00:49:38 | BANNIG -- THINGS BAN -- BANNING THINGS IS A GREAT WAY TO START. |
| 00:49:45 | YOU HAVE A GREAT OPPORTUNITY WITH A LETTER OF YOUR COLLEAGUES HAVE SIGNED TO THE AGRICULTURE COMMITTEE TO HOLD HEARINGS IMMEDIATELY. |
| 00:49:52 | THERE ISN'T A REASON THAT SHOULD NOT BE THE CENTERPIECE OF THAT CONVERSATION. |
| 00:49:55 | >> MS. |
| 00:49:56 | EDWARDS? |
| 00:49:58 | >> THANK YOU VERY MUCH, THANK YOU TO OUR WITNESSES TODAY. |
| 00:50:03 | I APPRECIATE THAT YOU HAVE PUT INTO CONTEXT WHAT CONSUMERS ARE FEELING. |
| 00:50:11 | MOST, BARRING A CLASS OR TWO IN AND A GRADUATE SCHOOL, HAVE NO IDEA ABOUT MARKET ECONOMICS, THE COMMODITIES MARKET, HOW THAT IMPACTS THINGS LIKE THE FOOD WE BUY AND THE GAS WE PUT IN OUR CARS, SO I APPRECIATE THAT. |
| 00:50:26 | IT WAS HELPFUL TO HEAR JUST A REMINDER ABOUT SUPPLY AND DEMAND AND THE RELATIONSHIP BETWEEN SUPPLY AND DEMAND AND WHAT SHOULD BE THE PRICE. |
| 00:50:36 | AS YOU STATED, PROF. |
| 00:50:39 | GREENBERGER, SUPPLIES ARE PLENTIFUL, DEMAND IS DOWN, AND PRICES REALLY SHOULD REFLECT THAT, AND THEY SIMPLY DON'T. |
| 00:50:49 | I FILL MY TANK A WEEK AND HALF AGO, AND IT WAS $4. |
| 00:50:53 | 40 A GALLON. |
| 00:50:54 | I FELT THAT MY TANK AFTER CHURCH ON SUNDAY, THIS PAST SUNDAY, IT WAS $4. |
| 00:50:59 | 10 A GALLON. |
| 00:51:00 | THIS WAS JUST A WEEK'S TIME. |
| 00:51:05 | I HEAR THE $10 BILLION, AND PEOPLE DON'T UNDERSTAND THOSE NUMBERS. |
| 00:51:11 | THEY ARE SO INCREDIBLE FOR US TO HAVE NOT BEEN FOR PRIVILEGED TO WIN THE LOTTERY. |
| 00:51:21 | IN THE $4.10 I SPENT FOR A GALLON OF GAS ON SUNDAY, HOW MUCH SHOULD I PAY? |
| 00:51:28 | >> THAT'S A GREAT QUESTION. |
| 00:51:31 | IFO YOU FOLLOW THE LOGIC OF MUCH OF THE CONVERSATION YOU HAVE HEARD HERE TODAY, AND THERE WILL BE WIDELY DIFFERING OPINIONS ABOUT THE DEGREE TO ITS SPECULATION IN AND OF ITSELF CONTRIBUTING TO THIS PROBLEM, YOU HAVE A RANGE OF OPINIONS FROM THE CHIEF EXECUTIVE OFFICER OF EXXONMOBIL, WHO CONTENDED THAT BETWEEN $65. |
| 00:51:52 | 70 $5 IS THE FAIR PRICE AND EVERYTHING OVER THAT IS SPECULATIVE -- THAT BETWEEN 60 $5. |
| 00:51:59 | 70 $5 IS THE FAIR PRICE OF EVERYTHING OVER THAT IS SPECULATIVE. |
| 00:52:03 | EVEN IF YOU TO CUT IT DOWN THE MIDDLE AND SPLIT THE DIFFERENCE BETWEEN THE TWO, INSTEAD OF SPENDING $4, YOU SHOULD GET IN SPENDING SOMETHING CLOSER TO $3 FOR YOUR GALLON OF GASOLINE. |
| 00:52:13 | $10 BILLION IS A BIG NUMBER. |
| 00:52:17 | LET ME PUT IT IN THE CONTEXT THAT I THINK SOME MAY BE MORE COMFORTABLE WITH. |
| 00:52:23 | CONGRESSMAN LARSON IS FAMILIAR WITH THE PEOPLE WHO WORK WITH ME AT MY SCHOOL. |
| 00:52:29 | I HAVE A LADY WHO IS A SINGLE MOTHER RAISING TWO CHILDREN BY HERSELF. |
| 00:52:34 | SHE HAS TO COME BACK AND FORTH TO WORK EVERY DAY. |
| 00:52:38 | IN DECEMBER, SHE WAS PAYING ABOUT $45 A WEEK FOR GAS. |
| 00:52:42 | NOW SHE IS PAYING $70. |
| 00:52:46 | YOU ALL WORKED VERY HARD AFTER THE FIRST OF THE YEAR IN WHAT LOOKED LIKE AN EXTRAORDINARILY DIFFICULT TASK TO GIVE EVERY WORKING AMERICAN APPAREL TAX-CUT -- A PAYROLL TAX CUT. |
| 00:53:01 | THE LADY WHO WORKS FOR ME RAISING THOSE TWO CHILDREN, ALL THE PAYROLL TAX CUT SHE RECEIVED GOES INTO PAYING ONLY TO GET HER BACK AND FORTH TO WORK. |
| 00:53:13 | WHATEVER GOOD INTENTIONS YOU MAY HAVE HAD IN HELPING THE PEOPLE LIKE THE PEOPLE I WORK WITH, IT HAS GONE ALL ENTIRELY TO THE HIGHER PRICE OF GASOLINE. |
| 00:53:24 | >> I REALLY APPRECIATE THAT, BECAUSE THAT REALLY DOES SAY EXACTLY WHAT WE ARE TALKING ABOUT. |
| 00:53:29 | THE SINGLE MOTHER PAYING FOR WHAT WAS $45 FOR A TANK OF GAS NOW PAYING $70 AS EFFECTIVELY LOST ALL OF THE TAX INCREASE THAT WE PROVIDED FOR HER AT THE BEGINNING OF THE YEAR. |
| 00:53:47 | $4.10 A GALLON -- I'VE GOT TO GET THAT CORRECT THAT I PAID ON SUNDAY -- SHOULD HAVE BEEN $3. |
| 00:53:55 | 10 A GALLON. |
| 00:53:56 | I REALLY THANK YOU VERY MUCH FOR BEING ABLE TO HELP US UNDERSTAND THE DETAILS, BUT TO PUT IT INTO A REAL CONTEXT IN TERMS OF WHAT I. |
| 00:54:06 | T. IS COSTING THE AMERICAN PEOPLE. |
| 00:54:07 | THANK YOU, AND I YIELD. |
| 00:54:10 | >> THANK YOU. |
| 00:54:12 | MR. |
| 00:54:14 | SCOTT. >> THANK YOU VERY MUCH, MS. |
| 00:54:17 | DELAURO, THANK YOU LEADER PELOSI AND OTHERS FOR CONVENING THIS MEETING. |
| 00:54:24 | GAS PRICES ARE COMPLICATED AND IT IS COULD YOU SEE GOOD INFORMATION. |
| 00:54:28 | BOTH OF YOU HAVE SPOKEN ABOUT THE LEGITIMATE FUTURES MARKET AND SPECULATION. |
| 00:54:31 | THAT IS ONE OF THE PROBLEMS WE HAD WITH THE CREDIT DEFAULT SWAPS, WHERE YOU HAD INSURING AGAINST A LOSS IN MORTGAGES MIGHT BE LEGITIMATE, BUT WHEN YOU ALLOW MANY PEOPLE TO BET ON THE SAME PACKAGE OF MORTGAGES, THAT'S JUST RAW SPECULATION. |
| 00:54:50 | WE HAVE CENTURIES-OLD PRINCIPLES OF INSURANCE. |
| 00:54:55 | BASICALLY, WHAT YOU ARE BUYING INSURANCE, AND TWO FINAL PRINCIPLES -- IF YOU SELL INSURANCE, YOU HAVE TO HAVE ASSETS TO BACK UP YOUR PROMISE. |
| 00:55:05 | THE SECOND IS YOU CAN ONLY BUY INSURANCE WHERE YOU HAVE INSURABLE INTEREST. |
| 00:55:10 | I CAN'T BUY FIRE INSURANCE ON YOUR HOUSE. |
| 00:55:15 | WHAT THEY WERE DOING WAS LETTING DOZENS OF PEOPLE BUY FIRE INSURANCE ON YOUR HOUSE, SO WHEN YOU HAVE A LOSS ON YOUR HOUSE, ALL OF A SUDDEN YOU ALL WANT ALL OF THESE LOSSES. |
| 00:55:26 | HOW MUCH OF THE SPECULATION PROBLEM COULD BE CURED IF WE JUST WENT BACK TO FUNDAMENTAL PRINCIPLES OF INSURANCE AND REQUIRED BEFORE YOU START SELLING INSURANCE THAT YOU COULD ONLY SELL IT TO PEOPLE WITH AN INSURABLE INTEREST? |
| 00:55:41 | >> THE GAMBLING ASPECT OF THE SUBPRIME BUILT ON AND WHAT WE'RE SEEING TODAY ARE SIMILAR, THE INVESTMENT VEHICLES THAT ARE BEING USED ARE DIFFERENT. |
| 00:55:52 | WHAT YOU ARE TALKING ABOUT, CONGRESSMAN SCOTT, IS SOMETHING THAT DODD-FRANK DID A REALLY GOOD JOB ON -- NOT A COMPLETE JOB, BUT A GOOD JOB -- BECAUSE YOU HAD PEOPLE LIKE JOHN PAULSON WHO PLACED BETS ON TRANCHES OF SUBPRIME THAT HE DID NOT KNOW IT WOULD FAIL. |
| 00:56:13 | HE BET PEOPLE WOULD BE KICKED OUT OF THEIR HOUSES WITHOUT HAVING LET ANY OF THE MONEY TO THOSE PEOPLE. |
| 00:56:21 | BY THE WAY, THE EUROPEAN UNION -- WE DID NOT IN DODD-FRANK JUST SAY STOP THE GAMBLING, WE SAID TO MAKE IT TRANSPARENT SO THAT EVERYBODY COULD SEE IT, THAT WOULD BE THERE. |
| 00:56:33 | . BUT THE EUROPEAN UNION -- THAT WOULD BE THERAPEUTIC. |
| 00:56:36 | BUT THE EUROPEAN UNION, IN THE EUROPEAN SOVEREIGN DEBT CRISIS, ANGELA MERKEL, MR. |
| 00:56:42 | SARKOZY GOT THE EUROPEAN COMMISSION TO SAY THAT PEOPLE WERE BETTING THAT SOUTHERN EUROPEAN COUNTRIES WOULD FAIL WITHOUT HAVING LENT THEM ANY MONEY. |
| 00:56:54 | THEY HAD A SYNTHETIC BET THEY WOULD FAIL. |
| 00:56:59 | THE EUROPEAN COMMISSION SAID STOP. |
| 00:57:01 | >> BUT IF THEY HAD LENT THE MONEY, THERE WOULD BE LEGITIMATE -- >> THEY WOULD NOT LET THE MONEY -- >> IN TROUBLE INTEREST WOULD HAVE HEDGED -- >> THAT IS EXACTLY RIGHT, AND GOD KNOWS HOW THIS HAPPENED. |
| 00:57:20 | INSURANCE COMMISSIONERS WERE MEETING IN FLORIDA TO SAY THAT CREDIT DEFAULT SWAPS ARE INSURANCE AND THEY ARE INJURING SOMEBODY ELSE'S RISK. |
| 00:57:28 | SINCE 18 06, WHEN PARLIAMENT SAID YOU CANNOT DO THAT BECAUSE PEOPLE ARE INSURING CARGOES ON BRITISH SHIPS AND CALLING THE FRENCH NAVY TO BOMB THE SHIPS AND COLLECT INSURANCE, THEY PUT A STOP TO THAT G. |
| 00:57:45 | SUDDENLY, WITHIN DODD-FRANK, GOD KNOWS HOW IT HAPPENED, STATE INSURANCE LAW WAS PREEMPTED. |
| 00:57:51 | >> SHOULD WE GO BACK TO THAT, WHERE WE INSIST UPON INSURABLE INTEREST? |
| 00:57:57 | >> YES, WE SHOULD, BUT WHAT I WOULD DO IS CONSIDER WHAT THE EUROPEAN UNION DID ON THAT FRONT AS WELL, AND WHAT I TELLING YOU IS THAT THE GAMBLING ON WHETHER GREECE WILL FALL, WITHOUT LENDING MONEY TO GREECE, IS NOT A PRODUCTIVE INVESTMENT. |
| 00:58:12 | IT IS A DESTRUCTIVE INVESTMENT. |
| 00:58:14 | EUROPEAN COMMISSION SAID NO, WE'RE NOT GOING TO DO THAT ANYMORE. |
| 00:58:22 | I WOULD JUST SAY, STOP THIS. |
| 00:58:25 | YOUR APPROACH WOULD BE GOOD. |
| 00:58:27 | WE'VE GOT A DIFFERENT PROBLEM IN THIS MARKET. |
| 00:58:30 | THIS IS PURE AND SIMPLE GOING INTO A BOOKIE'S SHOP AND SANG, I WOULD LIKE TO BED IN AN UPWARD DIRECTION. |
| 00:58:38 | >> THERE'S NO CONTROL? |
| 00:58:39 | >> NO. |
| 00:58:42 | >> -- THERE IS NO INSURABLE? |
| 00:58:47 | >> NO. |
| 00:58:48 | >> BUT ME ASK WHETHER WE SHOULD INCREASE IT MORE AND NOT JUST ON CATASTROPHIC NATIONAL SECURITY PROBLEMS, BUT MORE FOR PRICE STABILITY. |
| 00:59:04 | >> IF I UNDERSTAND YOUR QUESTION CORRECTLY, YOU ARE TRYING TO GET TO THOSE WHO HAVE AN INTEREST IN THOSE WHO CAN TAKE DELIVERY OF THE MATERIALS BEING CONSTRUCTED IN THESE MARKETS. |
| 00:59:18 | THEY ARE TO BE THE ONES PER DISSIPATING IN THE MARKET. |
| 00:59:22 | GOING BACK TO WALL STREET, WHAT THEY ARE PROMOTING ARE PEOPLE WHO WILL NEVER TAKE DELIVERY OF ANYTHING, NOR WILL THEY DELIVER ANYTHING IN THESE MARKETS. |
| 00:59:32 | THEY ARE MERELY PLACING BETS ON THE DAILY MOVEMENT OF THESE PRICES OF COMMODITIES. |
| 00:59:37 | FOR THOSE IN HEATING OIL, IT MEANS THAT INSTEAD OF A LOCAL -- INSTEAD OF A LOCAL HEATING OIL RETAILER OF THE TYPE THAT WE REPRESENT WHO GOES INTO THE MARKETPLACE AND BUYS CONTRACTS SO THAT THE RETAILER CAN TURNAROUND TO CONSUMERS AND OUR FOR CONSUMERS A FIXED PRICE OR A CAP PRICE PLAN FOR THE WINTER, HE OR SHE IS BUYING THE CONTRACT ON THE MARKET AND TAKING ADVANTAGE OF THE OPTIONS AVAILABLE IN ORDER TO STABILIZE HIS OR HER PRICE. |
| 01:00:11 | AS THESE ARE BEING INFLATED CONSTANTLY AND TURNED CONSTANTLY, IT IS COSTING MORE MONEY FOR THESE SMALL RETAILERS TO ENGAGE IN THESE TRANSACTIONS, WHICH MEANS IT IS COSTING CONSUMERS MORE MONEY. |
| 01:00:25 | WHAT PROFESSOR GREENBERGER IS TALKING ABOUT IS TO BE ABLE TO PUNCTURE THIS BUBBLE AND BRING THESE PRICES DOWN. |
| 01:00:32 | WITH RESPECT TO THE STRATEGIC PETROLEUM RESERVE, I GUESS I CAN BE COUNTED AMONG THOSE, BECAUSE IT WAS A YEAR AGO BUT I WAS IN THE REP'S OFFICE AND WE WERE WORKING ON THE STATEMENT IN ANTICIPATION OF ACTION IN LIBYA, ABOUT THE PRESIDENT'S ANNOUNCEMENT FOR THE POTENTIAL RELEASE OF THE STRATEGIC PETROLEUM RESERVE AT THAT TIME. |
| 01:00:58 | AND INDEED, IT IS STRATEGIC FOR THAT PURPOSE. |
| 01:01:01 | YOU ANNOUNCE YOUR INTENTION. |
| 01:01:03 | MUCH VICE -- MUCH LIKE PROFESSOR GREENBERGER WAS TALKING ABOUT WHEN HE SAID THEY COULD HAVE A HUGE EFFECT ON THE MARKETPLACE IF THE JUSTICE DEPARTMENT ANNOUNCED IT WAS GOING TO UNDERTAKE A MASSIVE AND SERIOUS INVESTIGATION OF WHAT IS GOING ON IN THESE MARKETS. |
| 01:01:19 | THE THREAT OF THAT ALONE IS HUGE. |
| 01:01:24 | ADD TO THAT THE THREAT, AND THAT IS WHAT WE WERE TALKING ABOUT A YEAR AGO, A YEAR AGO WAS THE THREAT THAT THE UNITED STATES WAS WILLING TO DO WHATEVER NECESSARY IN CONJUNCTION WITH OUR EYES TO MAKE SURE THAT AN ADEQUATE AND -- WITH OUR ALLIES TO MAKE SURE THAT AN ADEQUATE AMOUNT OF OIL WAS AVAILABLE IN THE MARKET. |
| 01:01:46 | INCLUDING STRATEGIC MOVEMENT. |
| 01:01:53 | AND UNDERSTANDING THAT WE DO NOT HAVE A PROBLEM WITH A SHORTAGE OF CRUDE OIL TODAY. |
| 01:02:01 | CUSHING, OKLA. |
| 01:02:02 | IS AWASH IN CRUDE OIL. |
| 01:02:03 | THERE IS NO PROBLEM WITH THE PHYSICAL SUPPLY OF THE PRODUCT, NONE WHATSOEVER. |
| 01:02:17 | >> I THANK THE LEADERSHIP FOR HAVING THIS HEARING. |
| 01:02:22 | I WONDER HOW LONG THIS CAN LAST AND HOW HIGH PRICES CAN GO. |
| 01:02:29 | NORMALLY, IN THE COMMODITIES MARKETS YOU HAVE A BOOM AND BUST CYCLE. |
| 01:02:34 | IT HAS OCCURRED WITH GOLD, WITH BASICALLY -- I MEAN, ORANGE JUICE, EVERYTHING. |
| 01:02:40 | IT SEEMS THAT THERE MUST BE SOME PEOPLE, THE JOHN PAUL SINCE OF THE WORLD -- JOHN PAULSONS OF THE WORLD, IF YOU WOULD, READY TO BUY SWAPS, READY TO GAIN THE VOLATILITY OF THE MARKET. |
| 01:03:01 | OR IS THERE A UNIQUENESS TO THIS MARKET? |
| 01:03:04 | I WOULD LIKE TO HEAR FROM BOTH OF YOU. |
| 01:03:06 | >> THIS IS A BUBBLE AND THE BUBBLE WILL BURST. |
| 01:03:10 | THE LAST BIG BUBBLE ONE FROM 147 TO 30 IN SIX MONTHS, BUT NOBODY SAW THAT COMING. |
| 01:03:19 | GOLDMAN WAS PREDICTING IT AT 200 WHEN IT WAS AT 30. |
| 01:03:23 | WE DO NOT KNOW WHEN THE BUBBLE WILL BURST. |
| 01:03:25 | IN THE MEANTIME, AS WE SAID, PEOPLE ARE SPENDING MONEY THEY PROBABLY DO NOT EVEN HALF, OR NOT BUYING MEDICINE THEY NEED, OR NOT PAYING RENT, TO PAY FOR GAS. |
| 01:03:40 | THAT CAN TRIGGER A RECESSION. |
| 01:03:43 | IF WE DO NOT HAVE TARP AND THE FED WINDOW, WHICH I DO NOT THINK POLITICALLY WE CAN HAVE THE NEXT TIME, WE ARE TOLD BY ECONOMISTS THAT COULD BE A DEPRESSION. |
| 01:03:54 | WHEN THE BUBBLE BURSTS, WE MAY ALREADY BE FLAT ON OUR BACK. |
| 01:03:58 | THE FACT THAT GASOLINE IS DOWN TO $1. |
| 01:04:03 | 50, LET'S SAY, MAY MEAN NOTHING IF WE HAVE UNEMPLOYMENT UP TO 15% OR 17%. |
| 01:04:10 | >> I AGREE CLEARLY THAT CONGRESS NEEDS TO TAKE ACTION. |
| 01:04:14 | ALTHOUGH, JUST BETWEEN US AND THE CAMERAS, THAT IS NOT GOING TO HAPPEN AS LONG AS THE MAJORITY IN THE HOUSE OF REPRESENTATIVES ARE OWNED BY THE EXTRACTIVE INDUSTRIES. |
| 01:04:25 | I WANT TO ASK YOU A QUESTION. |
| 01:04:28 | WE HAVE A FIGURE HERE THAT SAYS THAT FOR EVERY PENNY MORE WE PAY AT THE PUMP, THE PROFITS FOR THE FIVE LARGEST OIL COMPANIES GO UP BY $200 MILLION. |
| 01:04:39 | IS THERE ANY KIND OF COLLUSION GOING ON? |
| 01:04:45 | WE GOT A FIGURE FROM THE HEAD OF EXXONMOBIL, BUT THEY ARE PROFITING, ARE THEY NOT, FROM THIS SPECULATION? |
| 01:04:55 | IT IS ALL GOOD FOR THEM. |
| 01:04:57 | AND WHEN THE PRICE PER BARREL DROPS, THE PRICES AT THE PUMPS ARE NOT GOING TO DROP PROPORTIONATELY. |
| 01:05:03 | THEY WILL KEEP A LARGER AND LARGER SHARE. |
| 01:05:05 | THAT IS WHAT HAS HAPPENED EVERY TIME. |
| 01:05:08 | THEIR PROFITS GO UP AS PRICES GO DOWN. |
| 01:05:10 | IS THAT NOT TRUE? |
| 01:05:12 | >> TWO THINGS, FIRST, TO PROFESSOR GREENBERGER'S POINT THAT HE WAS GETTING INTO IT, TO GO, BECAUSE I THINK 2008 WAS VERY INSTRUCTIVE. |
| 01:05:21 | IN MARCH OF 2008 IT WAS $70. |
| 01:05:25 | BY JULY IT WAS $147. |
| 01:05:28 | BY NOVEMBER, $30. |
| 01:05:30 | BY NEXT MARCH IT WAS AT $70. |
| 01:05:33 | THAT IS AN EXTRAORDINARY ROLE PRESSURE TO PUT AN ECONOMY THROUGH. |
| 01:05:41 | NO ONE WITH A STRAIGHT FACE COULD LOOK AT YOU AND TELL YOU THAT AS INDIA, THAT AS CHINA, WE HAVE SOME EXTRAORDINARY WEATHER EVENT. |
| 01:05:52 | NO, WE DID NOT. |
| 01:05:53 | THERE WAS SOME INTERFERENCE IN THE MARKETPLACE THAT WAS POSING SUCH AN EXTRAORDINARY CIRCUMSTANCE THAT IT NEEDED TO GO TO $147. |
| 01:06:00 | NO, I DID NOT HAPPEN EITHER. |
| 01:06:03 | IT COULD ONLY BE -- >> IT COULD ONLY BE MARKET MANIPULATION. |
| 01:06:07 | >> WHAT OTHER CONSEQUENCE? |
| 01:06:09 | THE SUPPLY AND DEMAND FUNDAMENTALS DID NOT EXIST. |
| 01:06:12 | IT IS ALMOST AS THOUGH SOMEONE WERE TO SAY TO YOU, EVERYONE IN CHINA AND INDIA DECIDED TO DRIVE THEIR CAR IN JULY AND THAT DROVE IT UP. |
| 01:06:22 | AND THEY PARKED THEIR CARS BY THE FALL, AND THAT IS WHY IT WENT DOWN. |
| 01:06:25 | IT IS TRULY ABSURD. |
| 01:06:27 | WITH RESPECT YOUR QUESTION ABOUT PROFITS, FIRST, EVERY DAY THAT YOU HEAR A REPORT ON THE NEWS ABOUT WHAT HAPPENS ON THE COMMODITY MARKETS, EVERY SINGLE DAY, BY THAT EVENING FOR PUBLICATION THE NEXT MORNING, THE COMMODITY MARKET MOVEMENTS GET TRANSLATED INTO WHAT HAPPENS ON THE PHYSICAL MARKET, A WHOLESALE PRICES THAT ARE PEOPLE PAY -- THE WHOLESALE PRICES THAT OUR PEOPLE PAY. |
| 01:06:56 | THEY FOLLOW ALMOST IN LOCKSTEP. |
| 01:07:00 | THERE'S NO QUESTION THAT WHAT GOES ON ON WALL STREET HAS A DIRECT CAUSAL EFFECT ON ULTIMATELY, WHAT IS MADE, BY VIRTUE OF WHAT IS CHARGED TO THE GENERAL PRODUCTS -- GENERAL PUBLIC AND THE PRICE OF A PRODUCT THAT THEY PAY. |
| 01:07:14 | THERE IS A DIRECT CAUSAL RELATIONSHIP BETWEEN THE COMMODITY MARKETS AND THE PRICES CHARGED IN THE PHYSICAL MARKET. |
| 01:07:21 | WE WATCH THEM EVERY DAY. |
| 01:07:23 | AND THE ABSURDITY OF SOME OF THIS SHOULD NOT BE LOST ON ANYONE. |
| 01:07:28 | I WILL PICK ON HEATING OIL AGAIN WE JUST CAME THROUGH A HEATING OIL SEASON WHERE WE HAVE VIRTUALLY NO WINTER. |
| 01:07:43 | IT WAS EXTRAORDINARY. |
| 01:07:45 | THE MEASUREMENT OF COLD THAT -- OF COAL THAT WE USED WAS DOWN BY 25%. |
| 01:07:51 | THE VOLUMES SOLD BY HITTING RETAILERS WERE DOWN BY ONE- THIRD. |
| 01:07:56 | EXTRAORDINARY WEATHER EVENT. |
| 01:08:00 | THEN WHY, UNDER THOSE CIRCUMSTANCES, WOULD THE COMMODITY COST OF HEATING OIL TO $83. |
| 01:08:07 | 22? YOU CANNOT GIVE AWAY HEATING OIL -- WOULD BE $3. |
| 01:08:13 | 22? YOU CANNOT GIVE AWAKING OIL. |
| 01:08:16 | WE'RE TALKING ABOUT THE PRICE OF CRUDE AND THE PRICE OF A BARREL OF HEATING OIL. |
| 01:08:21 | THE PRICE OF A BARREL OF CRUDE IS $104. |
| 01:08:26 | AT THE PRICE OF A BARREL OF HEATING OIL IS $135. |
| 01:08:29 | WHY WOULD THERE BE SUCH A HUGE PREMIUM FOR A PRODUCT NO ONE IS USING BECAUSE IT IS 70 DEGREES? |
| 01:08:36 | IT DEFIES LOGIC FOR ANYONE TO SAY IS THAT -- IT IS SUPPLY AND DEMAND. |
| 01:08:44 | AND A REPRESENTATIVE MARKEY, TO YOUR OPENING STATEMENTS FOR THE FIRST TIME SINCE TRUMAN WAS PRESIDENT, THE UNITED STATES HAS BECOME A SUPPLIER OF PETROLEUM PRODUCTS. |
| 01:08:55 | MOST PEOPLE THINK WE ARE A NET IMPORTER OF EVERYTHING. |
| 01:08:59 | OUR CRUDE IMPORTS ARE UNDER 50% AND WE MAKE SO MUCH OF THE REFINED PRODUCTS THAT WE USE THAT WE HAVE ENOUGH TO EXPORT TO FOREIGN MARKETS. |
| 01:09:08 | AND HEATING OIL COMMODITY COST IS $3. |
| 01:09:11 | 22 IN A SEASON WITH NO WINTER. |
| 01:09:13 | AND THE PRICE OF A GALLON OF GASOLINE ON THE NYMEX HAS GONE UP 92 CENTS BETWEEN THE MIDDLE OF DECEMBER AND THE END OF MARCH AT A TIME WHEN AMERICANS LAST YEAR REDUCE THEIR CONSUMPTION OF GASOLINE 2. |
| 01:09:28 | 5% AND HAVE REDUCED IT BY AN AMOUNT MORE THAN ANY TIME SINCE WORLD WAR II OVER THE LAST THREE YEARS IN THE ECONOMIC CONTRACTION. |
| 01:09:37 | IF THERE IS ANYTHING THAT UNDERSCORES WHAT PROFESSOR GREENBERGER HAS SAID TODAY ABOUT THE ACTIONS YOU SHOULD TAKE IN THESE MARKETS, IS THE FUNDAMENTALS OF SUPPLY AND DEMAND DO NOT SEEM TO COUNT. |
| 01:09:50 | AMERICANS HAVE SACRIFICED. |
| 01:09:52 | THEY HAVE SACRIFICED. |
| 01:09:54 | AND THEY ARE NOT GETTING THE BENEFIT OF IT. |
| 01:09:57 | >> COMPELLING IN SIGHT. |
| 01:09:58 | THANK YOU. |
| 01:10:02 | >> EXTRAORDINARY. |
| 01:10:03 | I NOW RECOGNIZE THE VICE CHAIR OF OUR DEMOCRATIC CAUCUS. |
| 01:10:08 | >> THANK YOU, MADAM LEADER. |
| 01:10:13 | THANK YOU TO MY COLLEAGUES FOR BEING HERE. |
| 01:10:16 | BY THE WAY, IN CALIFORNIA, WE ARE PAYING WELL MORE THAN $4 PER GALLON OF GAS. |
| 01:10:22 | WE ARE PAYING UP TO $4. |
| 01:10:24 | 50 AND MORE FOR REGULAR GASOLINE IN LOS ANGELES. |
| 01:10:28 | DENMAN, WE HAVE SEEN THIS MOVIE BEFORE. |
| 01:10:32 | AND IT WAS NOT VERY GOOD THE FIRST TIME. |
| 01:10:35 | WE SOUGHT WITH THE SO-CALLED ENRON ENERGY CRISIS -- WE SAW IT WITH THE SO-CALLED ENRON ENERGY CRISIS WITH THE EARLY TO MID 2020. |
| 01:10:46 | WE SOUGHT WITH THE HOUSING BUBBLE IN THE LATE 2000'S. |
| 01:10:52 | I THINK WE HEAR YOU LOUD AND CLEAR. |
| 01:10:54 | BUT THERE ARE STILL FOLKS OUT THERE SAYING IT IS NOT SPECULATION. |
| 01:10:58 | IT IS NOT WHAT YOU ARE SAYING. |
| 01:11:00 | LET ME GIVE YOU ONE OTHER CHANCE. |
| 01:11:02 | IS THERE ANOTHER EXPLANATION FOR THE STEEP INCREASE IN PETROLEUM PRICES TODAY? |
| 01:11:07 | IS THERE ANYONE OUT THERE IN THE WORLD WHO HAS SOME CREDIBILITY IN SAYING THAT -- SAYING IT IS SOMETHING OTHER THAN SPECULATORS? |
| 01:11:17 | >> IT IS IN MANY PEOPLE'S FINANCIAL INTEREST TO PROPAGATE, WHICH IS A LOGICAL THING, BUT PEOPLE WHO DO NOT KNOW THE MARKETS, YOU WOULD THINK WITH THE PRICES GOING UP LIKE THIS, IT MUST BE SUPPLY AND DEMAND. |
| 01:11:29 | THAT IS WHAT WE ALL THOUGHT AND ECONOMICS 101. |
| 01:11:32 | WE DID NOT KNOW THAT THESE MARKETS WOULD BECOME GAMBLING CASINOS. |
| 01:11:36 | THAT IS WHAT HAS HAPPENED NOW. |
| 01:11:38 | THERE MAY BE SOME WORRY ABOUT THE STRAITS OF HORMUZ. |
| 01:11:43 | THERE MAY BE SOME TRANSPORTATION PROBLEMS THAT ARE CAUSING THIS. |
| 01:11:47 | BUT I WILL TELL YOU, IT DID NOT GO FROM $147 TO $30 ACCIDENTALLY. |
| 01:11:55 | THE HOUSE EVER PRESENTED AS PASSED A BILL TO STOP GAMBLING. |
| 01:12:00 | SENATOR REID -- BY THE WAY, ALSO YOU KEEP SAYING WE SHOULD HAVE HEARINGS. |
| 01:12:06 | IN JUNE OF 2008 THE LEADERSHIP BROUGHT A BILL TO THE FLOOR THAT WAS INTRODUCED THAT DAY THAT PASSED THAT NIGHT. |
| 01:12:13 | SENATOR REID DID NOT WAIT IN 2008 TO GO THROUGH HEARINGS. |
| 01:12:16 | HE INTRODUCED IN HIS OWN NAME A BILL THAT GOT 51 VOTES TO STOP GAMBLING. |
| 01:12:22 | HE COULD NOT VOTE CLOTURE. |
| 01:12:23 | BUT IF HE KEPT FIGHTING -- IF THE IF PRICES HAD STAYED UP, HE MIGHT HAVE VOTED CLOTURE. |
| 01:12:31 | PEOPLE WERE SAYING THE REPUBLICANS -- WE WILL NEVER GET THEIR SUPPORT. |
| 01:12:35 | I WILL TELL YOU, WHEN GASOLINE GOES UP, WE HAVE GOTTEN THEIR SUPPORT BEFORE. |
| 01:12:40 | >> AND LET US WORK ON THAT BECAUSE I THINK IS ABSOLUTELY TRUE THAT IT IS ALMOST IMPOSSIBLE THESE DAYS IN THE HOUSE OF REPRESENTATIVES TO GET A HEARING TO HAVE YOU OFFICIALLY TESTIFIED, KATULIS -- TO ESSENTIALLY CONVEY WHAT YOU HAVE ANNOUNCED TODAY, THAT IT IS DUE TO SPECULATION. |
| 01:12:59 | BUT LET ME MAKE SURE. |
| 01:13:00 | I DO NOT WANT TO WALK AWAY FROM THIS HEARING AND HAVE SOMEONE SAY TO ME THAT THERE ARE CREDIBLE FOLKS OUT THERE SAYING IT IS IN THE SUPPLY AND DEMAND. |
| 01:13:06 | IS THERE ANYONE OUT THERE THAT YOU KNOW THAT IS SAYING WE HAVE A SUPPLY PROBLEM, THAT WE DO NOT HAVE ENOUGH PRODUCTION? |
| 01:13:13 | AND I DO NOT WANT TO GO INTO THE DYNAMICS OF THIS AND MARKETING 101. |
| 01:13:20 | I JUST WANT A NAME. |
| 01:13:21 | IS THERE ANYONE I CAN TURN TO TO FIND OUT WHERE THIS PERSON IS COMING FROM TO SAY THERE IS A SUPPLY PROBLEM? |
| 01:13:27 | >> IN ALL HONESTY, WE HAVE TO SAY THERE IS A GUY WHO IS A PROFESSOR AT ONE TEXAS UNIVERSITY. |
| 01:13:35 | I NOTE A PROFESSOR FROM THE LONDON SCHOOL OF ECONOMICS. |
| 01:13:38 | BUT IF YOU WAIT, IT IS LIKE THE 60 TO TWO OR THREE. |
| 01:13:46 | >> IS THERE ANYONE SAYING THAT IT IS A DEMAND PROBLEM, THAT WE HAVE INCREASED OUR CONSUMPTION? |
| 01:13:51 | AND YOU WERE SAYING WE HAVE SEEN THE DEMAND DROP. |
| 01:13:55 | >> ABSOLUTELY, AND TO THAT POINT, THERE WAS A GREAT STORY IN THE NEWS THAT WHEN I GET HOME I WILL FORWARD TO YOU AND OTHER MEMBERS OF THE COMMITTEE. |
| 01:14:02 | I FORGET WHAT NEWS SERVICE IT WAS, BUT THE DEPARTMENT OF ENERGY PRODUCES THESE STATISTICS. |
| 01:14:09 | AND THE HEADLINE WAS, "AMERICANS REDUCE GASOLINE CONSUMPTION. |
| 01:14:14 | WALL STREET DOES NOT BELIEVE IT. |
| 01:14:18 | " [LAUGHTER] AT SOME POINT YOU COULD HAVE A DEBATE WITH SOME ABOUT WHETHER THE STATISTICS ARE RIGHT OR WRONG, BUT THE FACT OF THE MATTER IS -- AND I THINK THIS IS BORNE OUT BY WHETHER IT IS A MASTERCARD FIGURES ON CREDIT- CARD PURCHASES OR WHETHER IT IS EVEN THE AMERICAN PETROLEUM STATISTICS ON GASOLINE. |
| 01:14:36 | VERY CLEARLY OVER THE LAST FEW YEARS, AMERICANS HAVE DECREASED THEIR CONSUMPTION OF GASOLINE. |
| 01:14:41 | IS NOT A DEMAND PROBLEM. |
| 01:14:42 | THERE MAY BE SOME AREAS OF A COUNTRY WHERE THERE WAS THIS LOCATION OF A PRODUCT FROM TIME TO TIME, AND A QUESTION. |
| 01:14:48 | -- AND DISLOCATION OF THE PRODUCT FROM TIME TO TIME, NO QUESTION. |
| 01:14:55 | >> I WAS INTERESTED TO SEE YOUR BACKGROUND. |
| 01:14:59 | IF YOU ARE NOT COMING FROM A LEFT-WING THINK TANK. |
| 01:15:01 | IF I UNDERSTAND IT, YOU SERVED UNDER REAGAN FOR A TIME, DID YOU NOT? |
| 01:15:06 | >> YES, SIR. |
| 01:15:07 | AND I APPRECIATE YOU LETTING ME IN THE ROOM TODAY. |
| 01:15:10 | [LAUGHTER] >> WE THANK YOU FOR YOUR TESTIMONY. |
| 01:15:15 | WHO IS POCKETING THIS $10 BILLION A MONTH THAT AMERICANS ARE HAVING TO PAY FOR OVERPRICED GASOLINE? |
| 01:15:21 | WHERE IS IT GOING? |
| 01:15:22 | >> IN THE QUARTERLY REPORT YOU ARE GOING TO LEARN THAT INFORMATION. |
| 01:15:26 | THERE IS NO QUESTION THAT THE PROFITABILITY OF THOSE WHO REFINED GASOLINE AND TO MARKET IT THROUGHOUT THE COUNTRY ARE GOING TO BE BENEFITING FROM THIS. |
| 01:15:35 | THERE IS NO QUESTION ABOUT THAT. |
| 01:15:36 | EVERYONE KNOWS THAT. |
| 01:15:37 | ALSO, THOSE WHO ARE MAKING THESE INVESTMENTS IN THESE GASOLINE CONTRACTS ARE PROFITING HANDSOMELY. |
| 01:15:44 | IF YOU PAY VERY CLOSE ATTENTION TO WHAT GOES ON BETWEEN WALL STREET AND THE PHYSICAL MARKETS, AND I THINK THIS IS AN INCREDIBLY IMPORTANT THING FOR THE COMMODITY FUTURES TRADING COMMISSION TO BE PAYING ATTENTION TO, BECAUSE IT IS NOT JUST ABOUT THE COMMODITIES MARKET, BUT ALSO THE RELATIONSHIP BETWEEN COMMODITIES AND THE PHYSICAL MARKET AND HOW ONE DRIVES THE OTHER. |
| 01:16:05 | YOU'LL FIND PEOPLE ARE PAYING A HEFTY BILL FOR WHAT IS GOING ON. |
| 01:16:09 | >> THANK YOU. |
| 01:16:10 | >> I HAVE TO ADD THAT IT IS ALSO WALL STREET. |
| 01:16:14 | THIS IS HOW THEY MAKE THEIR MONEY. |
| 01:16:15 | THERE ARE TWO THINGS GETTING AT THEM INDIRECTLY. |
| 01:16:19 | ONE IS THE SO-CALLED LOCAL ROLE. |
| 01:16:20 | WHICH MEANS THEY CANNOT -- VOLCKER ROLE. |
| 01:16:24 | WHICH MEANS THEY CANNOT TRADE THESE CONTRACTS THEY HAVE TO HAVE AN INTERMEDIARY. |
| 01:16:30 | AND THE FED IS TELLING THESE BANKS, GET OUT OF COMMODITIES. |
| 01:16:35 | YOU ARE NOT BUYING OIL. |
| 01:16:37 | YOU ARE NOT SELLING OIL FINALLY, WITH REGARD TO THE PHYSICAL MARKETS -- YOU ARE NOT SELLING OIL. |
| 01:16:44 | FINALLY, WITH REGARD TO THE PHYSICAL MARKETS, THE 2000 BIGGEST ONE WAS MORGAN STANLEY. |
| 01:16:51 | IF YOU CAN DRIVE PRICES UP IN THE PHYSICAL MARKET, HE WILL NOT WANT TO SELL THOSE PHYSICAL BECAUSE IT IS AN APPRECIATING ASSET. |
| 01:17:00 | WHY LET THE AMERICAN CONSUMER HAVE A? |
| 01:17:03 | BUT KEEP IT UNTIL THE BUBBLE PEAKS. |
| 01:17:07 | >> THE LARGEST SUPPLIER OF HEATING OIL IS MORGAN STANLEY. |
| 01:17:11 | IT IS NOT AN OIL COMPANY. |
| 01:17:13 | EVEN THOUGH YOU TALK ABOUT BIG OIL, IT IS ACTUALLY BIG WALL STREET THAT IS CONTROLLING MOST OF OUR HEATING OIL. |
| 01:17:21 | >> REVELATION AFTER REVELATION. |
| 01:17:23 | WITH THAT, LET ME ASK FOR QUESTIONING FROM MY COLLEAGUE FROM MASSACHUSETTS, MR. |
| 01:17:30 | MARKEY. |
| 01:17:34 | >> THANK YOU. |
| 01:17:36 | CLIMATE CHANGE. |
| 01:17:37 | NEW ENGLAND'S TEMPERATURES IN THE WINTER OR FOUR DEGREES WARMER THAN THEY WERE IN 1970. |
| 01:17:42 | WE NOW HAVE PHILADELPHIA'S WHETHER FROM 1970. |
| 01:17:45 | PEOPLE FOR OPENING DAY FOR THE RED SOX ARE NOW PLANNING WHICH SHORT SLEEVE SHIRT THEY'RE GOING TO WEAR RATHER THAN WHICH COMBINATION OF SWEATERS AND FINAL SHIRTS THEY ARE GOING TO WEAR. |
| 01:17:55 | THAT IS A BIG CHANGE FROM YEARS PAST. |
| 01:17:57 | IT REFLECTS THE DOWNWARD PRESSURE ON HOME HEATING OIL. |
| 01:18:00 | BUT LET'S BE HONEST, THE PRICE OF HOME HEATING OIL SOMEHOW OR OTHER WAS UNAFFECTED BY THE MARKET. |
| 01:18:07 | AND PEOPLE IN NEW ENGLAND AND ALL ACROSS THE COUNTRY JUST GOT TIPPED UPSIDE DOWN BY MORGAN STANLEY. |
| 01:18:15 | LET'S GO TO WHAT HAPPENED IN THIS MARKET SINCE 2002. |
| 01:18:22 | IF WE HAD DENNIS KELLAHER FROM BETTER MARKETS TESTIFIED TWO WEEKS AGO. |
| 01:18:27 | HE TOLD US THAT IN 2002, 11% OF THIS OIL MARKET WAS CONTROLLED BY SPECULATORS, AND 89% CONTROLLED BY AIRLINES. |
| 01:18:38 | TRUCKING FIRMS. |
| 01:18:42 | SHIPPERS. WHO HAD TO BASICALLY PLACED BETS TO PROTECT THEMSELVES. |
| 01:18:46 | NOW IN 12 -- 2012 . |
| 01:18:53 | .., 63% ARE SPECULATORS AND ONLY 37% OUR TRUCKERS AND SHIPPERS AND AIRLINES. |
| 01:18:58 | PUTTING THEM AT THE MERCY OF MORGAN STANLEY IN TERMS OF ENSURING THAT THIS OIL PRODUCT IS SOLD AND THAT THE LAW OF SUPPLY AND DEMAND IS, IN FACT, ABIDED BY. |
| 01:19:12 | IS THIS PART OF THE ISSUE HERE? |
| 01:19:14 | BUT THE PEOPLE OWNING THESE OIL PRODUCTS HAVE NO STAKE IN ENSURING -- THAT THE PEOPLE OWNING THESE OIL PRODUCTS HAVE NO STAKE IN ENSURING THAT THE PRICES GO UP? |
| 01:19:25 | THEY JUST HOLD IT. |
| 01:19:27 | ALL IT IS FOR THEM IS CASH. |
| 01:19:29 | IS THAT WHAT HOLD NEW ENGLAND HOSTAGE TO THIS WINTER, AND PEOPLE ACROSS THE COUNTRY? |
| 01:19:35 | >> GAZPROM I AGREE WITH THAT. |
| 01:19:38 | -- YES, I AGREE WITH THAT. |
| 01:19:41 | JUST PARENTHETICALLY, SINCE I'M A RED SOX FAN, WHERE WORD ABOUT WHO IS GOING TO BE PITCHING, NOT THE CLOTHES WE ARE WEARING. |
| 01:19:51 | [LAUGHTER] BUT BACK TO MORGAN STANLEY. |
| 01:19:58 | >> [UNINTELLIGIBLE] >> I DID NOT MEAN TO START A MAJOR LEAGUE BASEBALL WAR. |
| 01:20:02 | I'M SORRY. |
| 01:20:04 | TO THE POINT OF ANYONE'S RATIONAL CONCEPT OF SUPPLY AND DEMAND, WHEN YOU HAVE A ONE- THIRD DECREASE IN THE DEMAND FOR YOUR PRODUCT AND SUPPLY IS ADEQUATE FOR THE MARKET, BASED ON THE IMPUTED DEMAND, IT DEFIES IMAGINATION THAN ANYONE WHO EVER TOOK AN ECONOMICS 101 CLASS WOULD LOOK AT THAT CIRCUMSTANCE AND SAY THE PRESS SHOULD DO ANYTHING OTHER THAN GO DOWN. |
| 01:20:38 | YOU DO NOT HAVE TO BE DICK TRACY TO FIGURE OUT WHY WALL STREET IS TAKING THE CFTC AND ALL OF THE DODD-FRANC ROSE TO COURT. |
| 01:20:49 | >> RIGHT. >> THEY WANT TO STOP PUTTING A CARD ON THE BEAT. |
| 01:20:52 | THEY WANT TO MAKE SURE THESE REGULATIONS ARE NOT THERE SO THEY CAN, THE MARKET AND CREATE ARTIFICIAL VOLATILITY IN THE MARKET. |
| 01:21:00 | THAT IS THE EASY CONNECTION. |
| 01:21:01 | MORGAN STANLEY CONTROL THE MARKET AND THEY THEN GO TO COURT TO MAKE SURE THAT THE WALL STREET REGULATIONS THAT DODD- FRANK PUT ON THE BOOKS ARE NOT IMPLEMENTED. |
| 01:21:10 | AND THEN THEY SAY TO CONGRESS, DO NOT PUT THE $100 MILLION WORTH OF EXTRA COPS ON THE BEAT TO SCARE THE LIVING DAYLIGHTS OUT OF THE SCAM ARTISTS. |
| 01:21:19 | IT IS PRETTY SIMPLE. |
| 01:21:22 | YOU CAN SUMMARIZE THIS NEFARIOUS ACTIVITY IN THIS SIMPLE FORM. |
| 01:21:26 | LET ME GO TO A COUPLE PIECES OF INFORMATION THAT CAME OUT TODAY. |
| 01:21:31 | ONE, ACCORDING TO THE ENERGY INFORMATION AGENCY, THE UNITED STATES CRUDE OIL INVENTORIES INCREASED 16 MILLION BARRELS OVER THE LAST TWO WEEKS. |
| 01:21:43 | THE INVENTORY OF OIL IN THE U. |
| 01:21:45 | S. ONE OF 16 MILLION BARRELS IN THE LAST TWO WEEKS. |
| 01:21:48 | BUT THE PRICE OF A GALLON OF GASOLINE WENT UP 7 CENTS A GALLON. |
| 01:21:52 | >> THAT IS RIGHT. |
| 01:21:53 | >> THERE SEEMS TO BE A DISCONNECT IN THE MARKET. |
| 01:21:57 | AND THIS MORNING, THE DEPARTMENT OF ENERGY ANNOUNCED THAT U. |
| 01:22:00 | S. CRUDE OIL PRODUCTION LAST WEEK ROSE TO 228,000 BARRELS PER DAY TO 6 MILLION BARRELS PER DAY ALTOGETHER. |
| 01:22:11 | IT IS HIGH AS OIL PRODUCTION SINCE 1998. |
| 01:22:14 | -- OF THE HIGH AS OIL PRODUCTION SINCE 1998. |
| 01:22:17 | YEAH HIGHER PRODUCTION, MORE OIL RESERVES, AND THE PRICE WENT UP 7 CENTS PER GALLON IN THE LAST TWO WEEKS. |
| 01:22:23 | WHY WOULD THAT HAPPEN UNLESS MORGAN STANLEY AND THE OTHER TICKET SCAM ARTISTS ARE NOT OUT THERE TRYING TO MANIPULATE THE MARKET TO KEEP PRICES HIGH TO REAP SHORT-TERM PROFITS AT THE EXPENSE OF OUR ECONOMY AND AT THE EXPENSE OF ORDINARY CONSUMERS? |
| 01:22:39 | DO YOU AGREE WITH THAT SUMMARY? |
| 01:22:40 | >> YES, I DO. |
| 01:22:42 | >> PROFESSOR? |
| 01:22:43 | >> ABSOLUTELY, YES. |
| 01:22:48 | >> PROFESSOR, LET ME GO THROUGH THIS LITANY THAT YOU WANT US TO GO THROUGH. |
| 01:22:52 | ONE, YOU WANT THE $100 MILLION FOR THE CFTC. |
| 01:22:56 | AND YOU WANT TO MAKE SURE THAT THE REPUBLICANS CANNOT CUT $30 MILLION FROM THE CFTC BUDGET SO THAT THE COPS ARE ON THE BEAT. |
| 01:23:03 | IS THAT RIGHT? |
| 01:23:04 | >> THAT IS RIGHT. |
| 01:23:05 | I WOULD ADD A FOOTNOTE, BECAUSE YOU ARE ALSO PROPOSING A TRANSACTION TAX. |
| 01:23:10 | THE FED DOES NOT COME TO YOU EVERY YEAR AND ASK FOR MONEY. |
| 01:23:14 | THEY GET MONEY FROM THE BANKS. |
| 01:23:16 | THE CFTC SHOULD HAVE, FRANKLY CANNOT -- FRANKLY, $100 MILLION IS THE LIMIT. |
| 01:23:26 | THERE IS A $100 MILLION DEFENSE BETWEEN WHAT THEY'RE GETTING AND WHAT PRESIDENT OBAMA WANTS TO GIVE THEM. |
| 01:23:31 | >> THEY ARE GETTING $205 MILLION AND THEY WANT $308 MILLION. |
| 01:23:38 | >> IN MY OPINION, THEY SHOULD GET $408 MILLION. |
| 01:23:41 | THEY NEED MORE COPS ON THE BEAT. |
| 01:23:45 | >> MR. |
| 01:23:46 | GUILFORD IS TALKING ABOUT $10 BILLION BECAUSE THERE ARE NO COPS ON THE BEAT. |
| 01:23:52 | >> DO YOU WANT THE JUSTICE DEPARTMENT TO BEGIN THE INVESTIGATION AND ANNOUNCED THAT YOU THINK IT WILL HAVE -- AND ANNOUNCED THAT YOU THINK WILL HAVE AN IMMEDIATE IMPACT ON THE MARKET. |
| 01:24:03 | ON THE QUESTION OF BANNING SOME -- CERTAIN VEHICLES, NAME THEM. |
| 01:24:09 | >> COMMODITY INDEX SWAPS, AND SYNTHETIC EXCHANGE TRADED FUNDS. |
| 01:24:12 | >> HOW MUCH MONEY YOU THINK THAT WILL TAKE OUT OF THE MARKET? |
| 01:24:15 | >> PROBABLY AT LEAST HALF A TRILLION DOLLARS. |
| 01:24:18 | >> THAT IS THE GAMBLING MONEY IN THE SYSTEM. |
| 01:24:21 | >> YES. |
| 01:24:22 | >> YOU TAKE THAT OUT AND YOU WILL SEE A DROP IN HOME HEATING OIL PRICES. |
| 01:24:26 | >> ANY OF THOSE THREE THINGS, YOU WILL SEE A DROP. |
| 01:24:30 | THE THREE OF THEM TOGETHER, YOU WILL CUT THE HEAD OF THE SNAKE OFF FOR EVER. |
| 01:24:33 | >> AND YOU AGREE WITH THAT? |
| 01:24:35 | >> YES. |
| 01:24:36 | >> IT WILL HAVE THAT IMPACT ALMOST IMMEDIATELY? |
| 01:24:39 | >> YES. |
| 01:24:40 | >> THANK YOU. |
| 01:24:41 | >> I WANT TO THANK OUR WITNESSES. |
| 01:24:45 | THIS HAS BEEN EXTRAORDINARILY INFORMATIVE. |
| 01:24:48 | IT IS ALWAYS GOOD TO HEAR YOU AGAIN, A PROFESSOR. |
| 01:24:51 | >> THANK YOU. |
| 01:24:52 | >> I HAVE THE BENEFIT OF THE WISDOM AND KNOWLEDGE OF GENE GUILFORD, BUT I ESPECIALLY WANT TO THANK YOU. |
| 01:24:59 | THERE IS A TENDENCY IN HEARINGS LIKE THIS NOT TO BRING IT DOWN TO HOW IT REALLY IMPACTS A MOTHER OF TWO. |
| 01:25:07 | AND ESPECIALLY MR. |
| 01:25:08 | GUILFORD, THANK YOU FOR THAT SCENARIO. |
| 01:25:10 | IT IS THOSE COMPELLING STORIES THAT BRING HOME THE ISSUE TO EVERY DAY AMERICANS IN TERMS OF BOTH WHERE THE PROBLEM IS, AND THE IMPACT THAT THIS HAS, AND THEN HOW WE GO ABOUT DOING IT IN THE CASE OF HOME HEATING OIL. |
| 01:25:30 | THE PRICES AT A RECORD. |
| 01:25:35 | THIS IS WHAT IS ALL -- IT IS ALL ABOUT AT THE END OF THE DAY. |
| 01:25:41 | WE CANNOT THANK YOU ENOUGH FOR YOUR TESTIMONY, AND ALSO FOR BACKING UP WHAT WE THINK IS AN IMPORTANT AGENDA TO ACCOMPLISH IN THE U. |
| 01:25:50 | S. CONGRESS. >> THANK YOU. |
| 01:25:54 | [NO AUDIO] |
| 01:25:57 | WITH QUICK ANSWERS, IF I CAN, BECAUSE WE'RE COMING TO THE 3:30 P. |
| 01:26:04 | M. MAR. PROFESSOR GREENBERGER, YOU STARTED TO ALLUDE TO THIS, EVERY PRESIDENT SINCE RONALD REAGAN HAS PROPOSED OFFSETTING THE SAFETY OF -- CFTC OPERATION FOR THE COLLECTION OF THE FEES. |
| 01:26:16 | WE HAVE LEGISLATION OUT THERE AT THE MOMENT TO AUTHORIZE THAT. |
| 01:26:19 | I DO. |
| 01:26:20 | OTHER COLLEAGUES HAVE. |
| 01:26:21 | THE QUESTION FOR YOU, AND A QUICK ANSWER FROM BOTH OF YOU. |
| 01:26:26 | WHAT A SMALL USER FEE IMPOSE ANY REAL BURDEN ON THE MARKET -- WHAT A SMALL USER FEE IMPOSE ANY RECORD ON THE MARKET PARTICIPANTS? |
| 01:26:35 | >> THE CFTC'S MARKET HAS INCREASED FROM 40 TRILLION DOLLARS NOTION VALUE MARKET TO 300 TRILLION DOLLARS NOTION OF YOUR MARKET. |
| 01:26:46 | IF YOU TOOK A LITTLE BIT OF THAT, IT WOULD NOT BE NOTICED. |
| 01:26:49 | BUT WALL STREET WILL NOT GIVE AN INCH ON THAT. |
| 01:26:52 | EVEN IF IT IS CYNICAL, THEY DO NOT WANT TO GIVE THE AMERICAN CONSUMER A NICKEL. |
| 01:26:56 | -- EVEN IF IT IS A NICKEL, THEY DO NOT WANT TO GIVE THE AMERICAN CONSUMER AND NICKEL. |
| 01:27:02 | >> IT IS ALMOST INFINITESIMAL, IT IS SO SMALL. |
| 01:27:11 | >> BUT THAT WOULD ALLEVIATE THE PROBLEM IN TERMS OF THE FUNDING. |
| 01:27:15 | THAT WOULD BE BEYOND THE OPERATION THAT WE DEAL WITH AND SO FORTH. |
| 01:27:19 | IT WOULD ALLEVIATE THE FUNDING PROBLEM FOR THE CFTC TO DO THEIR JOB. |
| 01:27:23 | PROFESSOR GREENBERGER, AGAIN QUICKLY, TO CURRENT MARKET CONDITIONS WARRANT THE USE OF CFTC'S CURRENT EMERGENCY AUTHORITY TO SET MARGIN AND POSITION LIMITS TO CURB EXCESS OF SPECULATION IN THE OIL MARKET? |
| 01:27:38 | >> YES, BUT REMEMBER, THE CFTC, WHICH IS NOT HEROIC IN ITS EFFORTS, IS BEING STARVED TO DEATH. |
| 01:27:45 | THAT IS WHY THE -- WHICH IS HEROIC IN ITS EFFORTS, IS BEING STARVED TO DEATH. |
| 01:27:50 | THAT IS WHY THE PRESIDENT IS SO SMART. |
| 01:27:52 | GET THE FBI MARRIED WITH THE BRAINS OF A STARVED AGENCY. |
| 01:27:56 | THAT WOULD BE MY ANSWER. |
| 01:27:58 | >> AND THAT IS THE AUTHORITY THAT THEY HAVE HAD FOR 30 YEARS. |
| 01:28:01 | >> BUT THEY ARE UNDERSTAFFED, AS YOU KNOW. |
| 01:28:04 | I WOULD LIKE TO GET MORE DIRECT AND HIT IT HARDER. |
| 01:28:10 | >> RELIEF TO CONSUMERS, ONCE THE DEFINITION OF A SWAP IS FINALIZED, WHAT CONCERNS DO YOU BOTH HAVE WITH REGARD TO THE LAWSUITS FILED TO PREVENT THEIR ROLE? |
| 01:28:21 | >> I'M VERY WORD THE LAWSUIT IS GOING TO KILL WHATEVER DODD- FRANK DID. |
| 01:28:29 | DODD-FRANK SET THE SHIPWRIGHT. |
| 01:28:30 | THE HEARING, THOSE WHO ATTENDED IT -- I DID NOT, BUT I HEAR FROM PEOPLE WHO I RESPECT THAT DID -- DID NOT GO WELL. |
| 01:28:39 | AND IT WILL GO IN FRONT OF A JUDGE THAT PROBABLY WILL BE OBJECTIVE. |
| 01:28:43 | THE D. |
| 01:28:44 | C. CIRCUIT HAS ALREADY BANNED THE FIRST DODD-FRANK OBJECTIVE PUT IN FRONT OF IT -- HAS ALREADY BEEN TO THE FIRST DODD-FRANK OBJECTIVE PUT IN FRONT OF IT I WANT TO THANK MY COLLEAGUES EFFORTS AND -- HAS ALREADY BENT THE FIRST DODD- FRANK OBJECTIVE PUT IN FRONT OF IT. |
| 01:29:04 | >> I WANT TO THANK MY COLLEAGUES FOR REVEALING INFORMATION ON TECHNICAL ISSUES. |
| 01:29:12 | I WISH WE COULD TAKE YOUR ALL ON THE ROAD AND LET THE AMERICAN PEOPLE HEAR FROM YOU ABOUT WHAT IS GOING ON. |
| 01:29:19 | I THINK IT WOULD BE CRITICAL TO DO THAT. |
| 01:29:21 | I THANK YOU FOR THE CLARITY, THE CANDOR, AND FOR YOUR COMMITMENT TO THE AMERICAN PUBLIC AND TO THE AMERICAN CONSUMER AT AN UNBELIEVABLY DISASTROUS TIME ECONOMICALLY IN THEIR LIVES. |
| 01:29:35 | THERE ARE RELIEVING -- THEY ARE REALLY ON MY SUPPORT. |
| 01:29:45 | MANY, MANY THANKS FOR YOUR CONTRIBUTION TODAY. |
| 01:29:50 | >> THANK YOU, MADAM CHAIR. |
| 01:29:52 | I WANT TO THANK YOU FOR BRINGING US TOGETHER AND BRING FORTH THESE EXCELLENT WITNESSES TO SHED LIGHT ON AN ISSUE OF GREAT SIGNIFICANCE TO ALL OF THE AMERICAN PEOPLE. |
| 01:30:04 | ALL OF OUR MEMBERS, AS I SAID EARLIER, WHEN WE ARE OUT OF SESSION AND SO MANY MEMBERS ARE PRESENT FOR A HEARING, IT SPEAKS TO THE URGENCY OF THE MATTER AND THE EXPECTATION OF EXCELLENCE THAT WE HAVE FROM ALL OF YOU, WHICH WAS CERTAINLY REALIZED. |
| 01:30:23 | WHEN I BEGAN MY REMARKS, I TALKED ABOUT THE AGONY AND ECSTASY, THE AGONY BEEN THE CONSUMER AT THE PUMP, AND THE ECSTASY BEING THE THE OIL COMPANIES. |
| 01:30:33 | IT IS CLEARLY RECOGNIZING THEY HAVE MADE $137 BILLION IN PROFITS LAST YEAR, $261,000 A MINUTE. |
| 01:30:42 | IT IS CLEAR THAT SOME OF THAT ECSTASY IS SHARED BY SPECULATORS, EXCESSIVE SPECULATORS ON WALL STREET. |
| 01:30:50 | THIS IS A VERY BIG DEAL. |
| 01:30:56 | I REALLY -- IT MAY BE ABOUT THE NICOLE, BUT I -- THE NICKEL, BUT I THINK IS MORE ABOUT THE SUPERVISION THAT THIS WILL BRING THAT THEY DO NOT WANT. |
| 01:31:15 | I WILL BRING THE ISSUE BEFORE THE FULL HOUSE OF REPRESENTATIVES IN A BIPARTISAN WAY. |
| 01:31:25 | THE ANSWERS TO YOUR SUPPLYING TO US, THE DOCUMENTATION OF THE CHALLENGE THAT WE HAVE WILL BE BEFORE THE FULL HOUSE. |
| 01:31:34 | HAVING SAID THAT, THIS IS A MATTER OF PUBLIC RECORD. |
| 01:31:38 | THANK YOU FOR BRINGING THIS ISSUE TO THE CONGRESS. |
| 01:31:41 | AND THE RANGE OF OPINIONS BETWEEN DR. |
| 01:31:44 | GREENBERGER AND HIS ACADEMIC WORLD AND DR. |
| 01:31:48 | GUILFORD SERVING THE ADMINISTRATION IN MORE THAN ONE CAPACITY. |
| 01:31:54 | THE VALIDITY THAT YOU BRING TO THIS IS WIDE RANGING. |
| 01:31:58 | WE ARE MOST GRATEFUL. |
| 01:31:59 | I THANK MY COLLEAGUES AND THE DISTINGUISHED RANKING MEMBER ON THE NATURAL RESOURCES COMMITTEE. |
| 01:32:07 | HE HAS SPOKEN SO HIGHLY OF WHAT YOUR TESTIMONY WOULD BE. |
| 01:32:11 | AGAIN, THANK YOU. |
| 01:32:13 | AND THANK YOU, CONGRESSMAN DOYLE FOR YOUR LEADERSHIP. |
| 01:32:18 | THANK YOU, AND THE HEARING IS ADJOURNED. |
| 01:32:22 | [CAPTIONING PERFORMED BY NATIONAL CAPTIONING INSTITUTE] |
| 01:32:26 | [CAPTIONS COPYRIGHT NATIONAL CABLE SATELLITE CORP. |
| 01:32:28 | 2012] |
| 01:34:09 | >> THE |
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