Hi Barb,
Hmmmm, for several decades the regulation of the utility market in California was pervasive and smothering. But the system was rarely if ever in crisis.The industry and the regulators concurrently decided that the end users of electricity would be better off with a de-regulated environment. Thus we have the present arrangement. For you to say that government is to blame for the gouging, grasping rapacious attitude of the speculators who are driving the California energy market with rumor, innuendo and deviousness is beyond ludicrous. It is utterly blind to the facts on the street.
Barb, whenever there is a supply/demand imbalance in the crude oil market of 1% of equilibrium, we get a 50% swing in price. This was true in 1998, when prices dipped below $10 per barrel and it was true in October when prices hit $38 per barrel. Now we are seeing the same phenomenon in natural gas in the California market. You are aware, I assume, that the cost of natural gas, which one year ago was below $4/MCF in the California market peaked yesterday at $62/MCF. This sort of market manipulation is threatening to destroy several California utilities. Fortunately, Bill Richardson intervened in order to force the distribution of Northwest wholesale electricity into the California market. This has dropped the price of natural gas to $40/MCF. You will notice that DoE intervention has brought prices down 50% in a day. You will also recall that when the 30MM Bbl of SPR oil was sent into the marketplace that it curtailed the rampant speculation in that market.
I've read enough of your posts to understand that you believe in less government intervention in market. You are also very intelligent. I think it would behoove you to review the history of the intervention of the Hong Kong authorities in the Hang Seng last fall. It is a tale of speculators trying to work corners on the market and create tremendous distortions in markets. Just as we have witnessed this month in California energy and in October in crude oil. You may not like to hear this, but markets left to their own devices are almost invariably run amok by the speculative players who have no interest in the long term, or in the commonwealth of society. Their greed drives them to create crises like the one we witnessed yesterday afternoon in California. If you think raw capitalism has a future, you are sadly mistaken. Without curbs on its excesses, capitalism will bankrupt all but the most devious, treacherous and dishonest among us.
Regards, Ray |
