As that Saudi shiek said “The stome age did not end for the lack of stones”.

Given that in fact the speculators increased volatility rather than decreasing it something seems not quite right about your post. Your comment about speculators helping risk averse businesses with predictable cost numbers is a great concept but obviously not borne out by the recent events.

Nobody like speculators. Everyone sees them as parasites. But without them, there would certainly be adverse side affects. As soon as other folks begin acting as gatekeepers on capital that wants to invest, things get screwed up. Incentives become unclear. Don’t forget, for every trade on which someone made money, someone else lost.

The broader problem here was cheap plentiful capital. Cheap capital makes it so easy for speculators.

One important role speculators play is to help others who are more risk averse to manage their businesses by providing predictable cost numbers. So consider what would happen if only energy users could participate. Who would make the market for those companies when they wanted protection against volatility? And if they failed to get it, who would pay. Consumers. Again.

Also notice that you could just as easily argue that the cure is additional speculation. Had we all been able to lock in energy costs 2 years ago, none of us would have been harmed by $4 gas. And if we had locked in 3 months ago, we’d all be screaming.

I don’t pretend to be an expert in markets. Far from it. But I know enough to know that the kind of gatekeeping you suggest, while reasonable at a glance, is not so simple or easy a solution as you hope.

Why not learn some more about them Justin, and for the time being, acknowledge your vast ignorance as I acknowledge mine. Don’t you see how foolish you sound when you say “can’t we all agree that regulation is the silver bullet?”