President Obama wants to pull the rug out from underneath the illegal speculation in the oil markets, but critics say it's just a witch hunt to insulate the president from taking the blame for high gas prices. What do you think?
NEW YORK ( TheStreet) -- Last week, the Federal Energy Regulatory Commission (FERC) fined former Amaranth Advisors' lead energy trader Brian Hunter $30 million in a civil penalty for violating the Commission's anti-manipulation rules in the natural gas futures market and concluded that "this amount is appropriate and sufficient to discourage Hunter and others from engaging in market manipulation." Apparently, President Obama does not agree when it comes to the message FERC sent about manipulation in the energy markets, announcing last Friday that his administration has created a financial task force to look into manipulation in the oil markets specifically. The political sound-biting on both sides of the divide was swift and typical in response to the Obama administration salvo, with cynics noting that the oil manipulation "witch hunt" coincided with the high gasoline prices and with headlines that high prices at the pump could de-rail Obama's re-election campaign. Detractors argue it's a sign of an administration helpless to do anything about high gasoline prices wanting to give the appearance of taking a stand on behalf of the angry masses -- and merely lip service. Skeptics have noted that close to three years after the financial crash, there has not been one indictment of a Wall Street executive for the massive speculative bubble that destroyed the U.S. housing market and economy. Phil Flynn, market strategist at PFG Best, did not pull any punches in his assessment of the Obama administration oil prices fraud task force, writing, "They have this insane belief that if somehow we limited speculating in oil, that somehow the price would be magically lower. That is ridiculous and naïve.... Acknowledge what is happening in all commodities, even ones that are not traded on exchanges.... We are being driven by geopolitics, deficits, wars and the growing lack of confidence in the currency that the commodities are traded in.... Before you know it, the next thing they will try to do is confiscate commodity traders' profits as opposed to just wasting our money on a publicity grabbing, self servicing investigation."
Market experts have noted that ever since the financial meltdown, there has been never-ending discussion of a key market measure that could limit speculation in commodities trading -- speculative position limits imposed by the Commodity Futures Trading Commission (CFTC). A financial fraud task force may not be necessary if the CFTC would approve this long-debated measure. Unfortunately, the fate of this limit rule remains in limbo.