On the recordJune 14, 2011
I rise this morning to talk about something that most Americans don't know much about: derivatives. Derivatives are basically big bets on the future of the housing market, the future of oil prices that, amongst other things, AIG used to destroy itself, requiring the Bush administration to put together a bailout package that was so controversial that we got to pay for. Derivatives are also used by speculators to take position in energy markets. Don't take it from me. Goldman Sachs says that $20 to $30 of the price of a barrel of oil today is associated with speculation in the energy markets. Now, you'd think given all this that we might regulate derivatives, which we haven't done before, and you'd be right, except for the fact that the bill that we're talking about today, the Agriculture bill, would gut money for the CFTC, which will be the regulator of the derivatives markets. Now, the majority can't say we shouldn't regulate them. So, instead, in their zeal to deregulate everything, they're saying let's gut the regulators' ability to look after these contractors. Sounds crazy? It is. ____________________
