Ted Reed
Airlines are buying newer, more efficient aircraft. Steenland said Northwest alone is spending $6 billion over time. But the challenges are immediate, with the average ticket price now about 20% below cost.
"The unfortunate reality is it hasn't gone up enough to meet the price increases we've seen so far," Steenland said. At the hearing, Michael Masters, managing member of Masters Capital Management, said oil producers have historically used the futures market to determine prices, but market dominance by index speculators has disabled that function. He said that while "Wall Street is very good at inventing and promoting investment strategies" such as commodities investing, which provides a hedge against the falling dollar, "the subprime debacle shows us where unbridled financial innovation can lead." Stupak said, "If we burst the bubble, there are concerns it might have a devastating effect on the economy." And Rep. John Dingell, D.-Mich., the chairman of the committee on energy and commerce, said he worries about the law of unintended consequences, "an area of peculiar expertise to the Congress." But Oppenheimer oil analyst Fadel Gheit said oil prices above $65 a barrel are not supported by market fundamentals. He said the three measures could end speculation within 30 days. "Give these people 30 days to get out of their positions," he said. "They are big boys. They made a lot of money [and] the impact on the rest of their holdings would be significantly greater than the downside from their oil holdings."
RSS
