Gov't moves to limit speculative commodity trades

Discussion in 'Wall St. News' started by Optionpro007, Jan 13, 2011.

  1. Gov't moves to limit speculative commodity trades
    Federal regulators take step toward limiting speculative futures trading in commodities

    Marcy Gordon, AP Business Writer, On Thursday January 13, 2011, 12:51 pm EST

    WASHINGTON (AP) -- Federal regulators took a step Thursday to limit speculative trading of oil, food products and other commodities, responding to critics who say that has driven up consumer prices.

    The Commodity Futures Trading Commission proposed limiting the volume of futures contracts that financial investors can trade for 28 commodities. The panel voted 4-1 to advance the rule, which opens it to public comment.

    The restrictions are aimed at Wall Street firms and others who trade them to profit from swings in market prices. Agricultural companies, airlines and others who use futures trading to hedge against price changes would not be affected.

    Lawmakers had proposed establishing limits on speculative trading of commodities as part of the financial overhaul law enacted last summer. But they left the details of the rules to regulators to sort out.

    Eight senators -- seven Democrats and one Independent -- sent the regulatory commission a letter Thursday raising concerns about lobbying efforts by the financial industry aimed at watering down rules. The senators urged regulators to enact rules that place limits all traders other than those with "bona fide hedge positions."

    The letter was sent on the same day that the Labor Department reported that higher oil and food costs pushed wholesale prices up last month by the biggest amount in nearly a year.

    "The growing role of hedge funds, financial traders, and long-term passive investors in energy and other commodity markets has had devastating consequences for the average American," the senators wrote. "These speculators have contributed to rising volatility and periodic price spikes in the cost of gasoline and food."

    The letter was signed by Sens. Bill Nelson, D-Fla., Maria Cantwell, D-Wash., Carl Levin, D-Mich., Robert Menendez, D-N.J., Patty Murray, D-Wash., Bernie Sanders I-Vt., Sheldon Whitehouse, D-R.I., and Ron Wyden, D-Ore.
  2. clacy


    With Republicans back in charge of the house, this is DOA.
  3. I think all these institutions have always existed. What has changed is the ability for the general public to purchase/invest in raw commodities through ETFs.
  4. .....and the whole time these SCUM know how middle eastern wealth entities play the LONG side game holding support in the Oil market at key levels (just as they SOLD 144's up through 146's July 2008.....ME wealth players put the TOP in Oil).

    Attack the US BASED speculator while the rest of the worlds trading entities are ignored.........FRICKING INSANE STUPIDITY!!!!!!!!!!!! :eek:
  5. Visaria


    Should really read:

    "The growing role of central banks has had devastating consequences for the average American," the senators wrote.
  6. Tsing Tao

    Tsing Tao

    can someone explain to me how this will do anything? wont everyone just move offshore?
  7. the1


    To get that answer you'd have to compare the price of commodities priced in the reverse currency -- currently the USD -- and compare the price of the same commodity priced in a foreign currency. If the correlation is very strong, and I suspect it is, this proposal will do nothing unless the likes of GS are prohibited from going long Crude from an office in the likes of Bangladesh or George Town. The CB's are probably laughing at this. You and I? Well, we're basically fucked.

  8. Wrong, its already been proven the more speculators in a market the less volatility in prices. Fact.

    So dumb.
  9. Too funny. Ben Bernanke says "we're gonna gun asset prices!" and floods the system with unlimited quantities of magic money. When asset prices do indeed go up, the government starts whining about "speculators."

    I can only imagine what'll happen if things tank again. Public summary executions of short-sellers?
  10. Bob111



    but wait! there is more...GS will be tax exempt if they do that!
    #10     Jan 14, 2011