Tuesday, June 03, 2008
Congress Blames the Hedge Funds, Part III: A Fact You Won’t Read in the Washington Post Today
Hedge Funds Cut Oil Bets as Prices Rose, CFTC Probed
June 2 (Bloomberg) -- Hedge-fund managers and speculators reduced bets on higher oil prices by 80 percent since July as crude futures rose to records and U.S. regulators started investigating trading, government data show.
This didn’t make the Washington Post or the New York Times.
So-called speculative net long positions fell to 25,867 contracts on the New York Mercantile Exchange in the week ended May 27 from a record 127,491 on July 31, according to a U.S. Commodity Futures Trading Commission report on May 30.
It didn’t even make The Wall Street Journal, which carried a front page online article on the death of Bo Diddley last night, not that the CFTC report is more important than the death of Bo Diddley.
It’s just that The Wall Street Journal seems to be trying hard to become the New York Times, what with the nonstop Presidential campaign coverage, news from Myanmar and the Chinese earthquake, not to mention those expanded editorial pages, which seem like they take up most of the newspaper now.
And you can be sure that the geniuses in Congress aren’t reading Bloomberg. If they did, it might interfere with their strategy for dealing with rising energy costs, stagflation and global warming, which is, and we aren't making this up: “Blame-the-hedge-funds-and-get-reelected.”
The decline may complicate the CFTC's probe as regulators try to determine how much of the rise in oil to more than $135 a barrel last month was caused by speculators who may have manipulated the market instead of consumer demand. The CFTC, under pressure from Congress, said May 29 it was investigating the doubling of oil prices the past year and said it will consider giving more detail on the types of oil investors and their holdings.
Of course, they could give Henry Paulson a call.
Perhaps the one competent individual in the entire District of Columbia, Paulson isn’t buying the Congressional strategy. As the Bloomberg article reports:
“If you look at the facts, they show that the price of oil is about supply and demand,” Paulson told reporters traveling with him on May 30 on a plane to Jeddah, Saudi Arabia.
Don't expect anyone from Congress to be calling Hank Paulson for advice. Why would anyone want to “look at the facts”?
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Posted by Jeff Matthews at 7:22 AM