Taking aim at oil speculators; Russian visit ends with lots of loose ends.

A summary of what's in the major U.S. newspapers.
July 8 2009 6:56 AM

Blame It on the Speculators

The New York Timesleads with the Obama administration's announcement that it might impose tougher regulations on energy speculators. The head of the Commodity Futures Trading Commission said he is considering limits on how much purely financial firms can get involved in energy-futures markets. It is seen as yet another example of how the Obama administration is stepping up efforts to regulate markets after two decades of steady deregulation. The Wall Street Journalleads with President Obama's two-day visit to Russia that ended yesterday with "conciliatory words" for Prime Minister Vladimir Putin but also calls for the Kremlin to change some of its ways. The Washington Postleads with a look at how the stimulus package still hasn't delivered a jolt to the economy, making Democrats nervous that another one might be needed. President Obama defended the $787 billion package yesterday, and administration officials insist spending will ramp up later this year. But it obviously won't be enough to offset all the recent job losses, and Republicans are already making it clear this will be the main issue in next year's midterm elections.

The Los Angeles Timesdevotes much of its front page to the Michael Jackson memorial. It was an emotional, star-studded event that was broadcast around the world. Singers, political activists, athletes, and family members said farewell to the King of Pop, who was lying in a gold casket draped in flowers that his brothers brought to the stage at the beginning of the ceremony. The LAT notes that "the signature moment" of the service may have been when his 11-year-old daughter, Paris Michael Katherine Jackson, took the stage. "I just wanted to say, ever since I was born, Daddy has been the best father you could ever imagine," she said through tears. "And I just wanted to say I love him so much." USA Todaydevotes the top half of its front page to a picture of Paris Jackson at the microphone, surrounded by members of the Jackson family, but its lead story is about how Sarah Palin's resignation actually "boosted her a bit among Republicans." A poll taken this week shows that Palin has become even more polarizing after her resignation as the vast majority of Republicans want her to become a national figure, and Democrats overwhelmingly want her to just go away. Fifty-five percent of independents agree with Democrats. Almost three-fourths of Republicans say they'd be likely to vote for Palin for president in 2012, while 51 percent of independents say they wouldn't.

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Traders in futures markets essentially make a bet on how much a commodity will be worth at a certain point. So, for example, an airline might get involved in the oil futures markets to protect itself from price volatility. But besides businesses that actually consume and produce oil, financial firms also get into the game and have often been blamed for the wild swings in energy prices. The rules that the main U.S. futures-market regulator is considering would impose limits on how much these financial investors could invest in oil, natural gas, and other energy products at one time. The proposed changes immediately raised the ire of traders, who say that the recent volatility in oil prices has more to do with uncertainty about the economy. But, as the WSJ points out, the amount that financial investors have plunged into popular indexes that track futures contracts has increased fourfold since January 2006.

The WSJ gives big play to the increasing anger at speculators—does this whole war-against-speculators story line sound eerily familiar? Perhaps it's because we were talking about it last summer—but highlights that it isn't limited to the United States. Prime Minister Gordon Brown and President Nicolas Sarkozy write an op-ed piece in the WSJ today and state that the "price of oil has been dangerously volatile, seemingly defying the accepted rules of economics." They say the international community needs to get together to keep better track of "damaging speculation" and make sure it doesn't get out of hand. Sarkozy and Brown will try to get other world leaders on board at the Group of Eight meeting that begins today in Italy.

So, after two days of meetings with Russian leaders, did Obama manage to "reset" relations between the two countries? Maybe a bit, but not really, seems to be the answer that most of the papers give. Obama and his Russian counterparts came to some agreements on the easy stuff and left most of the hard stuff for another day. The NYT says Obama and Russian President Dmitry Medvedev "declared reconciliation" but only by partly "agreeing to disagree … and by selectively interpreting the same words in sharply different ways." The WSJ notes that "mistrust still runs deep on both sides" and the agreements reached "were relatively modest." The LAT agrees and points out that Obama's attempt to use his signature move of addressing a large assembly of people to talk directly to Russians seemed to fall flat. Obama spoke in a respectful tone, even as he pointed out longstanding differences between the countries, but no Russian television stations carried the speech live. In a piece inside, the NYT says some Obama aides were "struck by the low-key reception" that even extended to his wife, who is typically followed around breathlessly in foreign trips.

Leading Democrats said those who want a second stimulus package are getting ahead of themselves and should let the first one work its way through the system. Despite all the handwringing and the anxiety that the public is supposedly feeling over whether the stimulus is working, the pace of spending is pretty much as expected. And it's not just administration officials who think so. The WSJ notes that a new Government Accountability Office report states that the spending is actually "slightly ahead of estimates."

The WP is alone in fronting the continuing clashes between Muslim Uighurs and Han Chinese in the far western region of Xinjiang. Chinese President Hu Jintao flew home early this morning from Italy, where he was scheduled to attend the G-8 meeting. Since at least 150 people were killed Sunday, the government has filled Xinjiang's capital with security forces, arrested at least 1,400 people, and imposed a curfew. But a group of Uighur protesters, mostly women, came out again yesterday morning, demanding that their detained family members be released. Later in the day, thousands of Han Chinese carried out revenge attacks, destroying Uighur-owned businesses. Protests have also broken out in other major cities in Xinjiang.

The NYT takes a look at how pornographic movies are losing plot and dialogue. Sure, plot was never the strength of these movies, but heavy competition from the Internet means that there's a bigger focus on filming short sex scenes rather than a feature-length film. Instead of plots, studios are focusing more on themes that can loosely tie several sex scenes together. "It's almost like we're back to the late '70s or early '80s when the average movie was eight minutes and just a sex scene," said the co-chairman of Vivid Entertainment. "I used to have dialogue," Savanna Samson said. "Getting it on in one hardcore scene after another just isn't as much fun."

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