Two Sets of Domestic Thieves
Mr. William Downey, J. D. - Managing Director
W.J. Downey Consulting
Implications:
There are really two sets of thieves preying on the trucking industry. The first are steal diesel out of the tanks, or hijack rigs and tankers. Then there are the investment firms, trading firms and investors, who continue to drive up the cost of oil by speculation.
Analysis:
The first group always shows up when there is a fuel crises. The industry can use the old fashioned idea of locking the fuel tank. I started using locks on my car in the 70's and started locking tanks on my power units and refers in the 80's. It's good practice.
To defeat hijackers, companies need to use tracking devices (all those red dots in the commercial) and in cab communications devices. I understand there is a satellite based system that can shut the engine off if it is suspected that the unit has been hijacked. Another way is to keep an eye not just on your rig but the other guy's. If you notice something suspicious notify the guard or call the police. Of course do not intervene on your own.
The second group operates in suits and ties, with plush offices and trading floors in such places as Chicago, New York, London and Dubai. They also operate from the trading floor of many major oil firms.
These are the speculators. Speculators have been around since the beginning of trade. There is nothing wrong with making a profit. There is something wrong on making a profit out of the misery of others - it's called greed.
There are supposed to be regulations governing commodities trading. But like so many other areas the US government has abdicated the responsibility and trust of the American public. In fact the CFTB has made it even easier for speculators to drive up the cost of oil.
If the various groups who want oil released from the strategic reserve or advocate gas tax holidays really wanted to do something about the cost of oil and its impact on the economy, then they should push for enforcement of the Commodities Exchange Act and revocation of the CFTB's decision to allow derivative trading in futures on the ICE and Dubai Mercantile Exchange.
Posted: 5/12/2008 2:53 AM
https:news.glgroup.com/cm/Analysis