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Eric Cantor promises oil speculators that republicans will block financial regulations

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"Eric Cantor promises oil speculators that republicans will block financial regulations"

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Yesterday, House Majority Leader Rep. Eric Cantor (R-VA) Cantor told an audience of speculators that his Republican caucus would “do our part” to block the implementation of financial reforms passed last year as part of the sweeping Dodd-Frank law.  Lee Fang has the story in a ThinkProgress cross-post.

Cantor was visiting the Chicago headquarters of the CME Group, “the world’s largest owner and operator” of private exchanges for derivatives products. CME Group specializes in a number of markets, including trading futures contracts for various blends of crude oil and food commodities. Cantor met with executives, and at one point, gave brief remarks before CME Group employees and various commodity speculators.

Cantor even called out the Commodity Futures Trading Commission, the regulators in charge of overseeing derivatives and energy speculation, and promised to stop regulations from going online:

CANTOR: And you’ve managed to be able to serve that function in the CME Group for so much of this country and the world, and you’ve also managed to position as a true world leader. We want that in every arena. We want to help you continue to lead for America, that means we gotta do our part when you see the implementation of Dodd-Frank coming at you like a barreling train. We want to help control that so that we can get some sensible, sensible follow up to that legislation. [...] Whether it’s the EPA, the FDA, the FCC, the SEC, the CFTC, you name it, there is an acronym for a federal agency causing harm right now. We’re trying to pull that in.

Watch it:

Currently, energy speculation is at an all time record high. In 2008, according to many analysts, oil speculation “” which took place on unregulated private exchanges owned by the CME Group and a set of international exchanges “” spiked gas prices to unprecedented levels. Now, excessive oil speculation is again driving the pain at the pump. While Goldman Sachs has claimed that at least $25 of the current price of crude oil is due to speculation, financial experts contacted by ThinkProgress say the Goldman Sachs number is probably very conservative.

Although the Dodd-Frank reforms passed last year included a new mandate for regulators to curb rampant oil speculation, these regulations have not yet been implemented. Republicans, under Cantor’s leadership, are working furiously to ensure that they never will be. For instance, Cantor’s caucus has proposed massive budget cuts to the Commodity Futures Trading Commission “” the regulatory body charged with overseeing oil speculators at the CME Group. As the New York Times has reported, CFTC regulators literally do not have enough money even for staplers, and can barely enforce laws on the books before even getting to new Dodd-Frank rules. In addition, Republicans are also pushing a separate bill to delay Dodd-Frank derivatives reforms for at least eighteen months.

Extended transcript:

CANTOR: Now the grow piece, it comes back to what you do here. You provide the center, it’s almost like the center of the universe for liquidity. It is ultimately providing a service to investors and to small business owners at the end to control and predict their risk and try to minimize the cost of goods that they buy and ultimately to lower their costs of operating so that there can be a cheaper outcome whether it is good and capital or what have you. And you’ve managed to be able to serve that function in the CME Group for so much of this country and the world and you’ve also managed to position as a true world leader. We want that in every arena. We want to help you continue to lead for America, that means we gotta do our part when you see the implementation of Dodd-Frank coming at you like a barreling train. We want to help control that so that we can get some sensible, sensible follow up to that legislation. It’s very troubling. But we’ve got similar instances in much of, a lot of other areas. It’s not just financial services where federal bureaucracy has rum amok. So the Republicans and our growth agenda are very focused on stopping regulations that negatively impact people who want to create growth and value. Whether it’s the EPA, the FDA, the FCC, the SEC, the CFTC, you name it, there’s an acronym for a federal agency causing harm right now. We’re trying to pull that in.

- Lee Fang, in a TP cross-post

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3 Responses to Eric Cantor promises oil speculators that republicans will block financial regulations

  1. denim says:

    The speculators that borrow money to speculate can presumably be stopped from borrowing the money. That will go a long way. It would not affect those who need to trade in deliverable commodities via futures…just speculators who jack up the prices.

    Fed Has Power To Pop Commodity Bubble
    May. 8 2011 Posted by Mark Sunshine
    http://blogs.forbes.com/greatspeculations/2011/05/08/fed-has-power-to-pop-commodity-bubble/

  2. sault says:

    Did Dodd-Frank have anything in there requiring oil futures buyers to actually take delivery of the oil they were bidding on? This would shove a lot of the worst speculators out of the market and bring the futures exchanges closer to what they were invented for: hedging against the risk of future price increases. What we have now is actually the CAUSE of a great deal of the price increases we’ve seen recently.

  3. Mulga Mumblebrain says:

    So Cantor sees ‘US leadership’ not in production of goods and services, trade or innovation, but in parasitic speculation. What an idealist! Of course the activities of commodities traders do not remain within the parameters of the law for long, not if greater gain is possible, and respect for propriety the only obstacle. The tsunami of malfeasance and chicanery that brought on the continuing GFC may not have led to any criminal convictions, but the credibility and reputation of ratings agencies, regulators and the ‘finance industry’ are in tatters (as if they care!).
    You would think that a crisis that has cost the tax-payer, so far, about twenty trillion smackers, might produce a little restraint and a modicum of caution, but you’d be dreaming. Once they had their losses socialised by compliant politicians and the privately owned ‘Federal’ Reserve, the banksters did not miss a beat in getting straight back to paying themselves larcenous ‘bonuses’, greater than ever, now in the billions per year in some cases, and in using the free money shoveled out by ‘Helicopter’ Ben Bernanke to begin, immediately, blowing up new speculative asset bubbles.
    The root cause of this insanity, which will destroy the real economy, sentence tens of millions to poverty and misery and hundreds of millions in the poor world to hunger and malnourishment, is greed and inequality. The global rich now own more of the planet’s wealth than ever, and they, being insatiably greedy, demand as high a return on their capital as possible. Productive investment is for losers, and winners go for the casino of speculation, just as they once did with tulips and South Sea Company shares. When this bubble pops, it will be interesting to see where the money comes from to bail the grifters out, yet again.