We had a good belly laugh today when we read an attempt to use a recent MarketWatch article to defend Congresswoman Bachmann's prize press conference pandering for the "No Excuse for This Energy Act."
Readers may remember that Bachmann claimed that enacting the legislation--not a bill she actually authored or introduced, mind you, just one she decided to co-sponsor in April--would bring down the price of gas to $2 in four years.
We can certainly understand why Mitch Berg at Shot in the Dark ( crossposting to True North) would glom on to an article with this headline:
Gas could fall to $2 if Congress acts, analysts say
to vindicate the widely-ridiculed Mrs. Bachmann. Unfortunately for that reading of the article, the details tell a much different story about what might make gas prices fall. Hint: a different piece of legislation.
First, there's a pesky subhead:
Limiting speculation would push prices to fundamental level, lawmakers told
which Berg left out, along with a bold-in-the-original lead:
WASHINGTON (MarketWatch) -- The price of retail gasoline could fall
by half, to around $2 a gallon, within 30 days of passage of a law to
limit speculation in energy-futures markets, four energy analysts told
Congress on Monday.
And is the legislation highlighted by those commies at MarketWatch the bill Bachmann touted in Woodbury? Sadly for Mr. Berg, no. The article says:
[House Energy and Commerce Committee Chair] Dingell [D-Mich] introduced a bill on June 11 that would ask the
Energy Department to gather the facts on energy prices, including the
role played by speculators. See full story.
There are two kinds of speculators in the futures markets, Masters
said. Traditional speculators are those who need to hedge because they
actually take physical possession of the commodities. Index
speculators, on the other hand, are merely allocating a portion of
their portfolio to commodity futures.
Index speculation damages price-discovery mechanisms provided by futures markets, Masters added.
The committee will likely consider legislation that would rein in index
speculation by imposing higher-margin requirements; setting position
limits for speculators; requiring more disclosure of positions; and
preventing pension funds and investment banks from owning commodities.
In reviewing congressional history, we have learned that never before has anyone ever confused Representative John Dingell, Democrat of Michigan and author of the anti-speculation bill, with the honorable Mac Thornberry of Texas and author of the "No Excuse for An Energy Bill." (We certainly hope no wag is ever tempted to merge their names along with their identity).
The passage Berg quoted takes on a much different meaning when we learn that the hearings took place in a hearing for another bill entirely. Here's the passage SIHD reproduced:
Testifying to the House Energy and Commerce Committee,
Michael Masters of Masters Capital Management said that the price of
oil would quickly drop closer to its marginal cost of around $65 to $75
a barrel, about half the current $135.
Fadel Gheit of
Oppenheimer & Co., Edward Krapels of Energy Security Analysis and
Roger Diwan of PFC Energy Consultants agreed with Masters' assessment
at a hearing on proposed legislation to limit speculation in futures
markets.
Krapels said that it
wouldn't even take 30 days to drive prices lower, as fund managers
quickly liquidated their positions in futures markets.
"Record oil
prices are inflated by speculation and not justified by market
fundamentals," according to Gheit. "Based on supply and demand
fundamentals, crude-oil prices should not be above $60 per barrel."
While that information was headlined by MarketWatch, the article makes it clear that Dingell wasn't simply running a show hearing, since others testified that futures trading and pure speculators had not been a significant factor in raising oil prices.
That the MarketWatch article is used to rescue Representative Bachmann's honor becomes even more ironic when the post is read at True North. For there it is on the same page--or maybe not--with Triple A's scolding piece
The Matrix Candidate Tim Walz - “As If Market Fundamentals Are At Work Here”.
Thus, we watch the collective repository of Right Blogisota's wisdom defend Bachmann's public silliness with an article reporting that some experts believe market fundamentals aren't working, while it scolds Walz for alluding to that same vein of expert opinion. We thank True North for this truly illuminating moment of conservative zen.
Update: Mitch Berg issued a correction. However, he was unable to find our "About" page which notes our name, and thus makes a swipe about anonymity on this blog. "Ollie Ox" is a pen name, but ownership of this blog has always been readily available via whois as well as for over a year on the site itself. Pseudonyms are not necessarily a form of anonymity, as Mr. Learned Foot, Mr. Big Trunk and others on the right can certainly attest. [end update]
The Man at Talk the Talk in Albert Lea writes aloud what we've been thinking:
