It was engineered by Enron lobbyists and pushed through into law by by Phil Gramm, McBush's economic expert. This is the what causes bubbles. Like the gas price pain we are now experiencing and food price shock coming from midwest farms flooding.
It allows compelety unregulated trading in energy futures. Would carbon emission permit trading (cap and trade) come under this rule? Yep. In fact as the root word "hedge' implies, supposedly hedge funds are there to hedge against risk, and take a profit for the risk they shoulder. Risk of bad weather affecting crops and food prices, as these midwest floods will do.
It was recently expanded to allow unregulated trades through Dubai, pretty convenient for those who actually own these united states now.
This loophole allows the same people who run the market (like Enron did in the California energy "crisis") and control it to trade in it. Giving them the catbird seat. And making the market a fake "free" market.
Estimates are that gasloloine would now be in the 2 dollar price range without the loophole, so 2 dollars out of your pocket every time you buy gas is going solely to make hedge funds more profitable.
An economy in freeefall and that law can't be repealed? Yep. Does the same market reality exist for all ftures trading now? Yep. So half the cost of food is going to benefit hedge funds too.
Do we have a problem here? We sure do. Will it be fixed? No, absolutely not. Almost every person in a position to change it has most of their assets in hedge funds.
What would happen if the hole were closed? Hedge funds would crash. Everyone who bet their money through those funds would lose their savings. Almost all our senators, congressmen, corporate execs, media stars, and upper level government officials.
Time for another bonus army to march on DC. This time we want the "bonuses" that the hedge funds and their clients have stolen back. In this case our interests are in direct conflict to almost everyone in the ruling class.
Check out what happened to the first bonus army. It helped create the Veterans Administration.
http://en.wikipedia.org/wiki/Bonus_Army
Of course we won't be raising a bonus army this time around. But at least call your representative's offices and make them aware of the video. Enter the words "Olbermann enron loophole video" in Google and there it is. That's a good way to explain it on the phone.
