Commodity Futures Trading Commission

10 things you need to know today: November 5, 2014

McConnell cruised to victory against Grimes. 

McConnell cruised to victory against Grimes. | (AP Photo/Timothy D. Easley)

The Week

Republicans seize the Senate, Democrats look for bright spots, and more

1. Republicans retake the Senate, gain seats in the House
After a long and arduous campaign season, it was a good night for Republicans. The GOP picked up Senate seats in North Carolina, Colorado, Iowa, West Virginia, Arkansas, Montana and South Dakota, giving the party it’s first Senate majority in eight years. Republicans also picked up at least nine seats in the House and won several hotly contested governors races, including in Florida and Colorado. Presumptive Senate Majority Leader Mitch McConnell, who ended up soundly defeating challenger Alison Lundergan Grimes, hinted at compromise, saying, “Just because we have a two-party system doesn’t mean we have to be in perpetual conflict.” [The New York Times]

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2. Democrats find few bright spots on election night
Despite a slew of election-night defeats, Democrats were able to hang onto Jeanne Shaheen’s Senate seat in New Hampshire with 52 percent of the vote. Republican candidate Scott Brown tried to tie the incumbent to President Obama, but ultimately his strategy failed. The Democrats also picked up the Pennsylvania governor’s seat, ousting incumbent Tom Corbett. [Politico, The Patriot-News]

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3. Feds launch probe of JP Morgan foreign trading
The Department of Justice is investigating JP Morgan’s foreign exchange trading business. Bank officials acknowledged the criminal inquiry in a government filing that was made public on Monday and said that they were cooperating with investigators. In addition to the DOJ, American banking regulators, the Commodity Futures Trading Commission, and the United Kingdom’s Financial Conduct Authority are conducting civil investigations into JP Morgan’s foreign exchange business. [Business Insider]

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4. New Ebola outbreak hits Sierra Leone
Koinadugu, a remote district in the northern province of Sierra Leone, had largely avoided the Ebola crisis thanks to a self-imposed quarantine. But a new infection chain is threatening the area and raising concerns that the death toll could skyrocket. Even after four months of isolation, a Red Cross team had to be dispatched to Koinadugu to give medical burials to 30 people. Another 25 have contracted Ebola and 255 more are being monitored for the disease, according to reports. [The Guardian]

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5. U.S. deficit declines dramatically
The U.S. budget deficit is down to its lowest level since 2008. The government spent $483.4 billion more than it took in last fiscal year, but that was only 2.8 percent of the country’s $17.2 trillion gross domestic product. That number is down from a high of 10.1 percent in December of 2009. The combination of the government reducing spending and a growing economy helped spur the decline. [Bloomberg]

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6. Ford issues vehicle recall
The second largest auto manufacturer in the United States has issued five recalls affecting more than 202,000 vehicles. Ford is calling back 38,645 Crown Victorias, Mercury Grand Marquis, and Lincoln Town Cars over fears that a previous recall led to improper repairs to the steering shaft. The company is also recalling 134,947 Flex and F-150 vehicles to fix an air bag malfunction. Another 960 F-150 pickups will need adjustments to the brake pedal, while 25,689 Transit Connects require repairs to their fuel systems. [Reuters]

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7. Mexican authorities arrest mayor suspected of abducting students
Mexican federal police apprehended Jose Luis Abarca, the mayor of Iguala, and his wife, Maria de los Angeles Pineda, for allegedly abducting 43 students on their way to a political protest. The pair, which was taken into custody in Mexico City’s Iztapalapa neighborhood, did not resist arrest. Despite locating the “probable mastermind” behind the kidnapping, authorities still haven’t found the missing students. [CNN]

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8. Venezuela’s president vows to raise minimum wage
For the third time this year, Venezuelans will see a double-digit increase in the minimum wage. President Nicolas Maduro said he would raise the country’s base pay by 15 percent to 4,889 bolivars — or $776 — a month. In January and May, the minimum wage was raised 10 percent and 30 percent, respectively. High inflation continues to cripple the Venezuelan economy. [BBC]

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9. Study reveals long-term shift work may cause memory problems
A new study suggests that shift work can deteriorate a person’s memory and thinking. The research, conducted by the National Center for Scientific Researchers in France, found that long-term shift workers who worked variable hours for 10 years experienced roughly 6.5 years of age-related decline in their cognition skills. The experiment followed 3,000 people over a decade and also found that it took at least five years to reverse the effects shift work can have on the brain. [CBS]

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10. George P. Bush is the latest member of the family to get elected in Texas
Not only was George P. Bush elected Tuesday as the Texas land commissioner, but he was the first member of the Bush clan to win his first election. The oil and gas investment consultant will now negotiate and enforce leases for mineral rights on state-owned land.
[The Texas Tribune]

Blame Oil Speculators, Not Obama, For Rising Oil Prices

Explaining why gas prices spiked in the last week or so is not easy.

Most people simply tune out from the technical and Wall Street explanations for the sudden rise in gasoline pricing.  They’d rather believe the GOP lie that President Obama is responsible for price spike.

The following piece from Think Progress puts it all into perspective…

Think Progress

As the improving economy has robbed conservatives of their chief talking point against President Obama, they’ve turned to rising gas prices as the next problem to pin on the president.

Speaker John Boehner (R-OH) “instructed fellow Republicans to embrace the gas-pump anger,” while Rick Santorum conspiratorially claimed Obama is intentionally pushing up prices to cut carbon emissions. Not to be outdone, Newt Gingrich released a 30-minute video today about how “the Obama administration is so anti‑oil” that they’ve forced the price of gas to go up.

But there’s little truth to claims that Obama has curbed U.S. oil production and driven up gas prices in the process. As NPR noted this morning, the number of drilling rigs in U.S. oil fields has quadrupled under Obama and domestic oil production hit an 8-year high in 2011. For the first time in 60 years, the U.S. is now a net fuel exporter.

Oil demand was actually down 4.6 percent last week over last year, while the supply of gasoline has actually increased slightly since a year ago. So why are gas prices so high? As McClatchy’s Kevin Hall explains today, there is a systemic problem: speculation.

Energy futures markets serve a legitimate role in helping producers (like oil companies) and big end users (like airlines) hedge against price volatility, but lately, they’ve been taken over by Wall Street speculators who never intend to actually use the fuel they’re betting on.

As Hall reports:

Historically, financial speculators accounted for about 30 percent of oil trading in commodity markets, while producers and end users made up about 70 percent. Today it’s almost the reverse.

A McClatchy review of the latest Commitment of Traders report from the Commodity Futures Trading Commission, which regulates oil trading, shows that producers and merchants made up just 36 percent of all contracts traded in the week ending Feb. 14 while speculators who will never take delivery of the oil made up 64 percent.

Many experts, lawmakers (Democratic and Republican), and government regulators have expressed similar warnings.

Finally, after many delays, the government board responsible for regulating commodity futures markets finalized a rule in October to limit speculation, a power it was given by the Dodd-Frank Wall street reform law. However, the rule won’t go into effect until next October, as the Commodity Futures Trading Commission (CFTC) needs to collect “one year of interest data” first. The financial industry is fighting the new rule, but just today, the CFTC took action against a company in different market, providing an example of how the energy regulation can effectively work.

Wall Street Behind High Food-Oil Prices Causing Global Instability

Rachel Maddow and Dylan Rattigan are the ONLY two people on network or cable TV that tells its audience the truth about the current gas and food price hike.  Speculation on Wall Street  is what drives gas and food prices to all time highs.

It’s convenient to blame the President for these hikes but in reality, it’s Wall Street…

Times News Net

AAA exec blames Wall Street speculation for high gas prices

Frustrated at the gasoline pump? Don’t blame the troubles in Libya or supply and demand. AAA East Tennessee says blame Wall Street traders.

Don Lindsey, AAA East Tennessee public affairs specialist, said the speculative nature of stock traders and the price of crude oil exceeding $110 per barrel are the main reasons the nation is flirting with $4 per gallon gas at the pump.   Continue reading…

Watch this Dylan Rattigan video for more…