Oil Bubbles about to Burst?

There's an old expression that goes something like this, "The squeaky wheel gets the grease."

With the price of oil and gas skyrocketing so quickly over the past 18 months, there are a whole lotta wheels squeaking -- and as usual, in Washington, a whole lotta finger-pointing, name-the-blame gaming and frankly IMHO, a whole lotta dumb ideas bubbling to the surface on how to correct the problem to quiet at least some of those squeaky wheels.

In Washington, the phrase should be more like this, "The biggest squeaky wheels get the grease."

Word on the street suggests one of those "biggest squeaky wheels" -- namely the financial lobbyists -- want to keep inflating the oil bubble... at least according to this Washington Post article.

Wall Street banks and other large financial institutions have begun putting intense pressure on Congress to hold off on legislation that would curtail their highly profitable trading in oil contracts -- an activity increasingly blamed by lawmakers for driving up prices to record levels.

Naturally, these squeaky wheels are playing the same old broken record "it's all about supply and demand" ...but, supply and demand of what, exactly?

Think about it.

Their industry runs on profits and losses. How do you show your clients a good return on their dollars when you lose one of your biggest money-makers? I'm talking about those cute surprise packages stuffed with sub-prime mortgages that are still reverberating shock waves through financial sectors. (It's not over until it's over.)

Back on point.

There is a bubble here, but whether it actually bursts will depend on who keeps blowing hot air into it. And, as it looks like the biggest squeaky wheels are getting bigger, they just might be allowed to continue doing that...

"Increasing regulation on what we do will not lower energy prices," said Greg Zerzan, head of global public policy for ISDA. The association, which represents all aspects of the multibillion-dollar practice of trading exotic financial contracts outside of formal exchanges, hosts a conference call every Friday in Washington to coordinate the activities of like-minded groups.

Its latest addition: the Financial Services Roundtable, the lobby for 100 of the nation's largest financial services companies. And now the Roundtable and ISDA are courting the nation's largest business federation, the U.S. Chamber of Commerce, to join their crusade. Chamber executives said they were seriously considering the alliance.

One thing about their industry they might have forgotten. They have to rely on the "trust" placed in them by the very investors buying their products. What happens when people finally stop trusting them, too?

Grab the popcorn. We're in for an interesting show.