Oil Below $80? Just Close the Enron Loophole
On 30 Dec 07 my call was for $175 oil. I expected the run up due: 70% to expectation of war with Iran, 10% Enron loophole, 10% due to increased demand, 10% declining dollar. I now believe oil over $80 is +80% Enron Loophole. If you are long oil, or commodities, you might want to understand the Enron Loophole, very, very well. The Disciplined Investor has a Pod cast with Michael Greenberger, professor of law at Maryland University and former CFTC Director of the Division of Trading & Markets. The Podcast is an hour, but I listened to it 3 times, to ensure I was picking up everything. I will wager you a REC, this POD cast is worth listening to for ALL STOCKMARKET investors. If the Loophole is closed oil will drop like a rock.
TDI Podcast 63: OIL-OIL-Enron Loophole-OIL-OIL
June 29, 2008
ENRON Loophole MSNBC
The Smartest Guys in the Room - California and Traders (Full Movie is on Google Video)
FYI - The Enron Loophole
by Vinny Catalano posted on: June 13, 2008
“Michael Greenberger, professor of law at Maryland University and former CFTC Director of the Division of Trading & Markets (1997 – 1999). Professor Greenberger argued that the “Enron Loophole” provision in the CFMA produced a change in the supervision of certain commodities (energy, for example) that had been in place since 1922 thereby enabling Enron to engage in their trading practices (with led to the electricity crisis in California in 2001) and the development of “dark markets” (Intercontinental Commodities Exchange in Atlanta, for example) enabling unlimited positions and limited transparency to be established by speculators. All outside the purview of the US regulatory bodies such as the CFTC. Currently, an attempt to eliminate the “Enron Loophole” has been attached to the massive farm bill (amendment by Sen. Carl Levin) that was passed with a veto proof majority and has been threatened with a veto by President Bush for stated reasons that are suspect, at best.
At last week’s congressional hearing, several experts testified to what the fair value of oil might be – a subject that I wrote about last week, without knowledge of the actual testimony.
It was interesting to hear that my rather simplistic calculation of where the fair value of oil might be (approx. $80) matched very closely to several expert witnesses’ estimates, as well as the more sophisticated analysis conducted by Exxon Mobil and Shell Oil.
Hearing on Energy Price Manipulation - Greenberger Testimony
The Real TRUTH Behind The OIL PRICES
Oil speculation and oil prices
Here is the Trailer to Smartest Guy in the Room