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You Can Help Keep Travel Affordable
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I am at two with nature
 
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Join Date: September 20, 2005
Location: Bunny Ranch with my MOM
You Can Help Keep Travel Affordable - July 9, 2008, 05:50 PM

I'll try anything at this point if it helps







An Open Letter to All Airline Customers

Our country is facing a possible sharp economic downturn because of skyrocketing
oil and fuel prices, but by pulling together, we can all do something to help now.


For airlines, ultra-expensive fuel means thousands of lost jobs and severe reductions in air service to both large and small communities. To the broader economy, oil prices mean slower activity and widespread economic pain. This pain can be alleviated, and that is why we are taking the extraordinary step of writing this joint letter to our customers.

Since high oil prices are partly a response to normal market forces, the nation needs to focus on increased energy supplies and conservation. However, there is another side to this story because normal market forces are being dangerously amplified by poorly regulated market speculation.

Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known.

Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab.

Over seventy years ago, Congress established regulations to control excessive, largely unchecked market speculation and manipulation. However, over the past two decades, these regulatory limits have been weakened or removed. We believe that restoring and enforcing these limits, along with several other modest measures, will provide more disclosure, transparency and sound market oversight. Together, these reforms will help cool the over-heated oil market and permit the economy to prosper.

The nation needs to pull together to reform the oil markets and solve this growing problem.

Get more information and contact Congress by visiting www.StopOilSpeculationNow.com/sos







Robert Fornaro
Chairman, President and CEO
AirTran Airways, Inc.


Bill Ayer
Chairman, President and CEO
Alaska Airlines, Inc.


Gerard J. Arpey
Chairman, President and CEO
American Airlines, Inc.


Lawrence W. Kellner
Chairman and CEO
Continental Airlines, Inc.


Richard Anderson
CEO
Delta Air Lines, Inc.


Mark B. Dunkerley
President and CEO
Hawaiian Airlines, Inc.


Dave Barger
CEO
JetBlue Airways Corporation


Timothy E. Hoeksema
Chairman, President and CEO
Midwest Airlines


Douglas M. Steenland
President and CEO
Northwest Airlines, Inc.




Gary Kelly
Chairman and CEO
Southwest Airlines Co.



Glenn F. Tilton
Chairman, President and CEO
United Airlines, Inc.


Douglas Parker
Chairman and CEO
US Airways Group, Inc.







Jeff

Last edited by Vega; July 9, 2008 at 05:57 PM..
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Join Date: April 23, 2004
Location: Round Hill
July 9, 2008, 11:30 PM

I absolutly agree with this. There is no reason for Oil to go up 4 bucks a barrel in a day other then speculation. While it is not the only reason, it is the main reason for the sky high prices. Greater demand from China and India have some impact but not anywhere near as much as speculators. We should line them all up to be shot.


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July 9, 2008, 11:54 PM

On regulating oil speculation, I thought this was a pretty interesting read. Check it out:

http://www.msnbc.msn.com/id/24794852/

The spike in oil prices has led to a lot of speculation — about what’s causing the surge. One of the usual suspects is the oil speculator — who’s trying to make a buck betting prices will go even higher. So, a lot of readers are asking, why can’t we just put a stop to all this speculation?

Why is there no way to stop the speculation of oil futures in hedge funds? The NYMEX started trading oil futures in 1983. Certainly regulations had to be put in place to allow that...
- Tom, Cincinnati, Ohio

With the latest spike in oil prices, consumers and Congress have started taking names. For awhile there, Big Oil — raking in more profits than it invested in finding more oil — was the main culprits. Strong demand from the developing world took part of the blame. Then the weak dollar was in the hot seat. Lately, speculators in the oil futures markets are the bad guys. (Our e-mail inbox contains a number of more creative theories about why oil prices are rising, but this list includes the usual suspects.)

All of these factors are playing a part: the growth in demand is coming faster than new supplies are being found and developed. If that keeps up, we may face an actual shortage — one side of the equation has to give. But as the value of the dollar has fallen and inflation has perked up, there’s no question that investors have been flooding the oil trading oil pits with orders. Buying oil is a great hedge against both.

So if all this speculation is pushing oil prices higher, why don’t we just clamp down on the speculators? Congress is considering doing just that. One quick solution: make speculators put up more money when they buy futures contracts. Under current rules, you can buy large volumes of oil with relatively small amounts of money. By raising the “down payment” on oil futures contracts, the theory goes, you’d eliminate some of the buyers who are just there to place bets.

The problem, as with everything to do with oil prices, is that the oil market is global. So if you shut the door on the U.S. commodity market, speculators could turn to other oil markets — like the International Commodity Exchange in London — to place their trades. If you got all the governments around the world to agree to clamp down (a neat trick if you can pull it off), traders would still figure out how to find each other. They could go on eBay.


That could make matters worse. One benefit of having a unified market, with the price of each trade made public, is that everyone can see what oil is trading for — right now. If you chase traders away from an open market, it’s becomes much harder to know what oil is “worth” at any given moment. Prices would take bigger swings because you couldn’t get an accurate market price when it was your turn to buy or sell. If the seller demanded $200 a barrel, you’d have a harder time arguing that the price was too high.

Speculators get it wrong, too. The ones who paid $135 a barrel on Thursday paid too much —based on the closing price on Friday. If we begin getting news that demand is falling — which is what’s supposed to happen when prices get this high — those traders could stampede in the other direction. It’s happened before: there have been several major oil price crashes since supply and demand became an issue in the 1970s.


"No race has ever been won in the first corner, but plenty have been lost there."
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