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Greenberger's Testimony: I-Banks Control the Energy Market
by: Anthony Schneider June 04, 2008
Michael Greenberger, the former head of the CFTC's Division of Trading and Markets, testified yesterday before the Senate Commerce Committee on the topic of Energy Market Manipulation. He stated that the investment banks, namely Goldman Sachs (GS) and Morgan Stanley (MS), control the price of oil and natural gas through the ICE futures market. He cited that Morgan Stanley currently owns 27% of the natural gas futures.
He stated that former Senator Phil Gramm of Texas sneaked the Enron loophole through a large piece of insignificant legislation years ago: the result was that regulations upon the futures industry were abandoned. This loophole eventually allowed the current CDO-subprime crisis, and the current energy market crisis because regulations, which once protected the market from manipulation, are no longer enforcable.
Greenberger suggested that the current attempt of closing the Enron loophole by Senator Levin through the Farm Bill, would not work - as it would leave the government with the constant burden of proof to prove manipulation was occurring. Also it would only be enforcable on domestic market manipulators and not international ones.
Greenberger said that legislation immediately closing the Enron Loophole with a broader, international scope would stop market manipultion and would cause oil prices to plunge over 25% overnight.
Heres Greenberger testifying in 2007- before they tried to close the Foreclosure Phil inserted Enron Loophole in the Farm Bill
http://www.youtube.com/watch?v=zbdtTGYQBMU
Heres Greenberger testfying on 7/02/08 after passage of the Farm Bill- but after Bush/CFTC decided they still weren't going to enforce it against oil...
http://www.youtube.com/watch?v=Bmj_FhyEpxo&feature=related