"JohnH" wrote in message
...
On Tue, 01 Aug 2006 14:40:22 GMT, "JoeSpareBedroom"
wrote:

"JohnH" wrote in message
. ..

Bzzzt. I asked first, and you haven't answered. Explain how the US
price is "out of hand".

The price elsewhere is completely irrelevant. That's your answer to the
Europe issue. As far as the price here, 25% to 35% of it consists of
trading
excess, like tech stocks before the bottom fell out. For stocks, it
doesn't
matter, because nobody is required to own them. For oil, the design of
our
country (which only gets worse) mandates its use. The oil companies,
knowing
this, do whatever they want with the price. That's a crime, and should
be
dealt with.


What would you do, Doug?
John

Limit futures trading to companies which have a material interest in the
commodity being traded, in this case, oil. Eliminate speculators, who, by
definition, are in no way involved with the production of petroleum
products. This latter group is simply playing games. Stopping this would
not
totally eliminate the fluff in the price, but it would go far in that
direction.


Are the oil companies the only futures traders, 'doing whatever they want
with the price' which, as you stated, is a crime?

John, I stated above that there were two general categories of traders, so
the obvious answer to your question is NO. There are companies with a
material interest in production costs, like Exxon, etc. Then, there are pure
speculators. You and I can trade contracts, but more often, it's
institutional traders who are managing (?) other peoples' money (mutual
funds, retirement money, etc).



Would you make that a law for all futures trading?

Just oil, and perhaps natural gas. These are two products we cannot stop
using for various reasons. We don't hear much outrage about wild price
swings for other products which are subject to gambling, like cocoa, sugar,
pork bellies, etc., so why bother with them?


Would the SEC then have
to check whether all futures traders had a 'material interest' in the
commodity. How would you define 'material interest'?

The SEC is fully capable of determining who is trading ANYTHING on the
various exchanges. As far as "material interest", that was also explained
earlier. Why are you asking again?