As we all know, Wall Street banks can screw with everything from the housing market to gas prices. But Senator Jeff Merkley (D. OR) and his colleagues have discovered another thing Wall Street banks mess with:
http://thehill.com/...
Oregon Democrats credited Wall Street commodity speculations for the rising price of beer and called on regulators to stop it.
“Nothing gets an Oregonian madder than messing with our Oregon beer, and that’s just what Wall Street is doing,” said Sen. Jeff Merkley (D-Ore.). “We can’t let Wall Street get away with rampant speculation in commodity markets that in turn hurts our middle class families and our Oregon brewers.”
Merkley and Reps. Earl Blumenauer (D-Ore.) and Suzanne Bonamici (D-Ore.) said commodity speculations on aluminum, copper, gas and electricity are raising prices on everyday products that middle-class families use, including beer cans, home improvement products that contain copper and even gas for cars.
“This unregulated gambling does little to serve the broader economy while burdening American families who have already suffered at the hands of Wall Street’s reckless behavior,” Blumenauer said. - The Hill, 8/7/13
Here's a little background info:
http://www.albanytribune.com/...
In recent days and months, it has been reported by various media outlets that:
Banks, hedge funds, and financial investors are dominating an opaque and convoluted aluminum trading market, which beer makers have testified is raising the price of beer cans by over $3 billion;
Speculation in the oil market by banks and financial investors is responsible for as much as $14 for every tank of gas purchased by American drivers;
Banks were manipulating electricity trading markets, taking millions of dollars out of ratepayers pockets;
The copper market is at risk of being dominated by a bank-sponsored investment fund; and
Financial speculation in grain commodities is driving up the price for bread and rice for hungry families in the U.S. and around the world.
During a Senate Banking committee hearing two weeks ago, major beer manufacturers testified about how the aluminum market has drastically changed over the past few years driving aluminum prices up through a convoluted exchange and warehouse system.
This has resulted in long wait times to acquire aluminum and an increased price.
“Hopworks Urban Brewery’s investment in canning its organic beer created job growth as well as increased support for local, regional and national suppliers,” said Ettinger. “Small businesses face many challenges. And while we certainly understand increased material costs, we are compelled to add our voice in calling out questionable market speculation driving increased prices.” - Albany Tribune, 8/7/13
Merkley and his colleagues have been turning their eye towards the commodities aspect since the end of last month:
http://wallstcheatsheet.com/...
The Senate has begun an investigation of its own, and hearings meant to understand how Wall Street has broadened its scope from banking to global markets for essential commodities started at the end of July. The overarching question is whether banks should control the storage and shipments of commodities, and whether that control could present a risk to the nation’s financial system.
Already, as The New York Times reported on July 20, Goldman Sachs has exploited industry pricing regulations by using a fleet of trucks to move 1,500-pound bars of aluminum between warehouses, thereby lengthening the storage time of the commodity, increasing the prices paid by manufacturers and consumers across the country, and adding millions of dollars per year to the company’s coffers.
This type of maneuvering in markets for oil, wheat, cotton, coffee, and other commodities has brought billions in profits for investment banks like Goldman, JPMorgan Chase (NYSE:JPM), and Morgan Stanley (NYSE:MS). But, with regulators cracking down, JPMorgan is looking to unload its warehousing unit. - Wall Street Cheat Sheet, 8/5/13
Merkley has scrutinizing regulators over commodities for a while now:
http://www.businessweek.com/...
U.S. financial regulators will boost scrutiny of banks’ commodities holdings and use their authority to pursue evidence of fraud and manipulation, the heads of two agencies told lawmakers.
“We’re a market regulator overseeing the commodity futures, swaps markets and have clear authority to police markets for fraud, manipulation and other abuses,” Commodity Futures Trading Commission Chairman Gary Gensler said at a Senate Banking Committee hearing where he testified yesterday alongside Securities and Exchange Commission Chairman Mary Jo White. “We will use those authorities appropriately where we see abuses and pursue it.”
Gensler and White, who said she would ask the SEC staff to weigh changes to disclosure requirements, responded to questions raised by Senator Sherrod Brown about whether markets and consumers are being harmed under rules that permit lenders including JPMorgan Chase & Co. (JPM:US) to own and trade commodities. New York-based JPMorgan, the biggest U.S. bank, agreed yesterday to pay $410 million over claims that it manipulated power markets in 2010 and 2011.
“It seems like there’s a huge amount of conflict of interest and a huge amount of market manipulation and it doesn’t seem like much action,” Senator Jeff Merkley, an Oregon Democrat, said in a follow-up to questions from Brown, an Ohio Democrat. “When these prices go up it’s a huge tax on the economy whether it’s in the price of a beer can or aluminum siding.” - Bloomberg Businessweek, 7/30/13
Merkley and his colleagues have vowed to continue to tell Wall Street to "can it":
http://www.ktvz.com/...
“I will continue working with Senator Merkley and Congresswoman Bonamici to shine a light on runaway speculation,” said Blumenauer. “This unregulated gambling does little to serve the broader economy while burdening American families who have already suffered at the hands of Wall Street’s reckless behavior.”
“Small businesses are an important part of our economy and our communities. it’s alarming to learn that commodity speculation is driving up costs for our local businesses," said Bonamici. "Federal regulators need to prevent these rising costs by moving quickly to enforce the Dodd Frank reforms, and members of Congress should be fighting attempts to undermine implementation through funding cuts and piecemeal repeal. We should be doing all we can to help families and small businesses in Oregon and across the country." - KTVZ, 8/6/13
Merkley, Blumenauer and Bonamici have sent a letter to financial regulators calling on them to take the necessary steps to end the speculation driving up the prices for middle-class families:
http://www.enewspf.com/...
Dear Messrs. Bernanke, Tarullo, Curry, Gensler, and Gruenberg, and Ms. White:
In light of a series of revelations about the relationship between our financial sector and physical commodities, we call on you to use your full regulatory authorities to rein in excessive speculation in commodities and restore the principle that our financial system serves the real economy, helping us build our economy “from the middle class out.”
In recent days and months, the American public has learned that:
Banks, hedge funds, and financial investors are driving up the cost of aluminum, costing brewers and beer drinkers a combined $3 billion.
Speculation in the oil market by banks and financial investors is responsible for as much as $14 for every tank of gas purchased by American drivers.
Banks are manipulating electricity markets, costing ratepayers millions of dollars in higher utility bills.
The copper market is at risk of being dominated by a bank-sponsored investment fund.
Even the price of bread and rice – staple foods for American families and hungry children around the world – is being driven up by financial speculation in grain commodities.
Something is very wrong with America’s current system of finance.
Middle class families and businesses want an economy that powers us all into the future, with a financial system that invests in new and innovative businesses, that helps states and local governments repair roads and bridges, that allows families to buy homes and go to college, and facilitates investments in the clean energy future we need. The job of the financial system is to take the savings that families and businesses work hard to earn and return it to the real economy through investments that create jobs, enhance productivity, and raise living standards. Banks, in particular, have a special role in taking deposits and making loans, while capital markets investors play a critical role in helping companies grow and expand productive capacity.
To be sure, healthy commodities markets are critical to ensuring manufacturers have the materials they need, when they need them. But when financial speculation dominates these markets, it overwhelms the farmers, trucking companies, and airlines that use these commodity markets as a hedge against their actual commodity use. In short, a healthy financial system is critical to robust economic growth, but when allowed outside of its proper channels, commodity speculation can be a drain on and a risk to businesses, families, and the economy in general.
The economy needs tough cops to keep Wall Street in its lane.
American free markets have a long tradition of robust regulation of Wall Street to ensure that capital efficiently flows to productive commercial investments, and not into bubbles and busts. President Teddy Roosevelt broke up the Wall Street “trusts,” President Franklin Roosevelt separated banks, securities, and insurance companies and established strong limits on financial speculation in commodities, and President Dwight Eisenhower solidified the principle that ordinary commercial businesses should be separate from financial businesses like banks. Unfortunately, over the last three decades, these basic rules of the road have been weakened. The result has been that far too much investment flows takes forms that are unproductive for investors, risky for our banking system, and damaging for manufacturers, service providers and the real economy overall.
The Dodd-Frank Wall Street Reform and Consumer Protection Act does much to help restore the focus that Wall Street should have on serving the real economy. It mandates strong limits on commodity speculation, separates banks that take deposits and make loans from high-risk hedge fund-like trading, and puts in place other key protections to prevent bailouts and collapses. But the law’s protections are not yet fully in place, and we are far from finished with the reforms we need.
We believe that the events of the last several months regarding commodities and banks demands that you speed up your efforts to implement the law and its full range of authorities, as well as use the other authorities you have, to ensure that American families’ savings and investments power our real economy. We appreciate your attention to these matters and look forward to your reply.
I thank Merkley and his colleagues for their continued work on this issue.
FYI, Merkley will be holding two Town Hall meetings tomorrow:
http://www.eastoregonian.com/...
The Oregon senator will stop by Pilot Rock City Hall, 144 N Alder Place, at 1:30 p.m. and Irrigon Junior-Senior High School gymnasium, 315 E Wyoming, at 5 p.m.
Just wanted to pass that info along. Merkley was able to get a few things done before the August recess:
http://www.enewspf.com/...
Oregon’s Senator Jeff Merkley, a member of the Senate Appropriations Committee, announced that the draft Interior, Environment and Related Agencies Appropriations bill for fiscal year 2014 includes an extension of forest stewardship contracting, which he worked to include. The authority expires at the end of the fiscal year.
“Forest stewardships contracts are good for creating jobs in the woods and maintaining forest health,” Merkley said. “Letting the authority for this important tool expire would have been a terrible mistake. I am glad the Senate is acting to continue stewardship contracts for Oregon’s rural counties.” - eNews Park Forest, 8/2/13
Merkley was also happy to get former Oregon lawmaker Rick Metsger confirmed to the National Credit Union Administration board:
http://www.bizjournals.com/...
"Rick Metsger is an excellent pick for our National Credit Union Association Board, with a deep knowledge of the issues faced by credit unions large and small," said Oregon U.S. Sen. Jeff Merkley, in a news release. "I know Rick will do a great job representing Oregon values in his new position.”
Metsger, a Democrat, served in the Oregon Senate from 1999-2011. He ran unsuccessfully for Oregon Secretary of State in 2008.
He is president of Parakletos Strategic Public Affairs LLC. Metsger has also worked as a consultant for the Northwest Credit Union Association. - Portland Business Journal, 8/2/13
Merkley's also been looking out for Veterans health issues:
http://kdhnews.com/...
Nearly three dozen rugged C-123 transport planes formed the backbone of the U.S. military’s campaign to spray Agent Orange over jungles hiding enemy soldiers during the Vietnam War. And many of the troops who served in the conflict were compensated for diseases associated with their exposure to the toxic defoliant.
But after the war, some of the planes were used on cargo missions in the United States. Now a bitter fight has sprung up over whether those in the military who worked, ate and slept in the planes after the war also should be compensated. Two U.S. senators are now questioning the Department of Veterans Affairs’ assertions that any postwar contamination on the planes was not high enough to be linked to disease.
Complicating the debate is that few of the planes remain to be tested. In 2010, the Air Force destroyed 18 of the Vietnam-era aircraft in part because of concerns about potential liability for Agent Orange, according to Air Force memos documenting the destruction.
Citing tests done on some of the aircraft in the 1990s, North Carolina Sen. Richard Burr, the ranking Republican on the Senate Veterans’ Affairs Committee, and Sen. Jeff Merkley, D-Ore., have asked the VA’s Office of Inspector General to review whether the department is “inappropriately” denying disability compensation to veterans who claim they were sickened by postwar contamination.
“It appears that [the VA] does, in fact, plan to deny any C-123 claims regardless of the evidence submitted in a particular case,” the senators wrote. The letter noted that a group of outside experts called the VA’s scientific conclusions “seriously flawed.” - Killeen Daily Herald, 8/5/13
And it looks like Merkley has a new ally in reforming the FISA court:
http://www.capitalnewyork.com/...
More significantly, perhaps, Schumer also expressed support for Sen. Jeff Merkley's legislation to open up the proceedings of the FISA courts that constitute the lone check on the broad surveillance program disclosed by Snowden. Schumer called it a "weakness" that "because the FISA Court is so secret, people don't know if it's being an effective independent arbiter or not."
"So a proposal like that of Senator Merkley, which would make the FISA Court provisions more public, of course, redacting anything that would affect national security, might make some sense and might let the American people know more what's going on," said Schumer.
Restrictions on the FISA courts seemed to be Democrats' preferred tweak to the government's surveillance programs, which were widely praised on Sunday for alerting officials to a possible Al Qaeda plot that led to the preemptive closure of more than 20 American embassies around the globe. - Capital New York, 8/5/13
But while he's been home, Merkley's been looking out for Oregon's forests:
http://theworldlink.com/...
Glendale High School has been transformed into a fire camp. Tents, trucks and other facilities fill the school grounds. There are so many firefighters, they had to open another camp, just for firefighters, in Riddle ... just north of Glendale.
It’s hard to imagine coordinating such an effort and, of course, it’s hard for non-firefighters to know the difficulty of being on the fire lines. It can turn deadly ... as witnessed by the death of firefighter John Hammack in central Oregon just outside Sisters.
Gov. John Kitzhaber, U.S. Sens. Ron Wyden and Jeff Merkley came to get a briefing and tour the fire camp. The briefing came state and federal officials and private landowner, including Allyn Ford of Roseburg Forest Products.
The governor thanked all those firefighters and those that staff the Incident Command Post in Glendale.
Kitzhaber, Wyden and Merkley were impressed at how well all agencies were working together.
“Today,” the governor said, “we saw a brief glimpse of the hard work and long hours going into fighting these fires and I know we’re all grateful for and appreciative of the contributions from those putting themselves into harm’s way to protect people and property.” - The Umpqua Post, 8/7/13
Gov. John Kitzhaber (D. OR) is predicting that the hot, dry death conditions could contribute to a long wildfire season:
http://www.registerguard.com/...
The 2013 season may be matched only by the 2002 Biscuit Fire that scorched a half-million acres in the Siskiyou National Forest and burned until the end of the year, said Kitzhaber, who also was governor during that fire. He said Saturday the lightning-sparked Douglas Complex of wildfires is the “No. 1 (wildfire) concern for the federal government.”
“This is one of the worst fire seasons we’ve had in years, probably worse than 2002,” Kitzhaber said in a phone interview from Glendale, outside Oregon’s largest wildfire.
“They’re making progress, but think about the magnitude of this risk, and remember that it’s only (Aug. 3),” he said.
Meanwhile in the Willamette National Forest, drier weather over the western Cascades has caused several fires to produce more smoke, making them more easily visible to surveillance aircraft, according to a National Forest press release.
There are now 13 active fires in the Three Sisters Wilderness, one small fire near Waldo Lake, the 19-acre Opal Lake fire on the flanks of Diamond Peak, and the 8.5-acre Landes Creek Fire near Oakridge. The latter fire is no longer burning but still producing smoke and heat. - The Register-Guard, 8/7/13
If you can attend the Town Hall meeting tomorrow, please do thank Merkley for his hard work and encourage him to continue to fight the good fight. If you can't make the Town Hall meetings, how about contributing to his 2014 re-election bid:
https://secure.actblue.com/...