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.
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:
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]