Wednesday, July 23, 2008

Plunge Protection Team Disses Senate Bill Harassing Speculators

The Plunge Protection Team gets one right:

The members of the President’s Working Group on Financial Markets (aka, The Plunge Protection Team) fired off a letter denouncing a Senate measure designed to curb speculation in the oil futures markets.

The working group — which consists of Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, Securities and Exchange Commission Chairman Christopher Cox and Commodity Futures Trading Commission Acting Chairman Walter Lukken — called the measure a bad idea.

The four noted in their letter that the bill would “significantly harm U.S. energy markets without evidence that it would lower crude oil prices.”

What’s more, they said, the bill’s “unprecedented restrictions on market participation could reduce market liquidity, hinder the price discovery process and limit the ability of market participants to manage and transfer risk.”

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