CFTC to Consider Setting Position Limits for Energy Trading

Posted on July 8, 2009 by Chris F. Masse

- Wall Street Journal

- New York Times

About Chris F. Masse

Founder and President of Midas Oracle
This entry was posted in Finance, Hedging & Insurance, Regulations and tagged , , , , , , . Bookmark the permalink.

4 Responses to CFTC to Consider Setting Position Limits for Energy Trading

  1. Medemi says:
    July 10, 2009 at 5:03 AM

    >> “My firm belief is that we must aggressively use all existing authorities to ensure market integrity,” Mr. Gensler …

    Mr. Gensler is correct.

    He is not alone. It was Adonis who opened up the debate on betting integrity on betfair’s forum, a company that needs it the most. Many were inspired by him, and many have been silenced since. Nobody who met Adonis in his prime will ever forget him, as he fought courageously against the many plants, trolls and cyberstalkers who tried to shut him up. People with hidden agenda’s.

    Still talking today, desperately trying to use his right to freedom of speech and expression, or what’s left of it, here

    http://apps.integermachines.com/Blog/

    Adonis will not be forgotten.

  2. Jason Ruspini says:
    July 10, 2009 at 3:54 PM

    I think the CFTC does a good job of providing fair and equitable trading, but this move seems aimed at preventing super-spikes in commodities. I had warned what would happen politically if speculators were perceived as running up oil during a recession and this may head-off that possibility to some extent.

    This blogger is critical of the assertion that speculation drives energy prices, and appeals directly to “the wisdom of crowds” and the argument that speculators not trading on fundamentals will lose money, like manipulators:
    http://oldprof.typepad.com/a_dash_of_insight/2009/07/dumb-comments-on-energy-prices-and-manipulation.html

    Making those sorts of arguments is risky business as a severe spike in commodity prices can damage your credibility.

  3. Medemi says:
    July 10, 2009 at 7:09 PM

    It’s not necessarily the speculators who drive up prices. It’s the influential people and businesses with vested interests, who (subconsciously) create the illusion that prices will rise forever, or for the forseeable future. A trader doesn’t care if a commodity is overpriced or not, if the perception is that it will rise tomorrow or next week then he/she will be a buyer. Pretty soon everyone will join the “party”.

    The stock market bubble, the housing bubble, they have a common theme which resemble a pyramid scheme. Most of us have witnessed these things so how can anyone pretend these prices are based on fundamentals?

    It shows very poor insight by this blogger to raise the “wisdom of the crowd” principle here. PMSL, asif the crowd has voice in this. One man can shred the “wisdom of the crowd” principle into a bunch of brainless sheep. We didn’t see “the wisdom of the crowd” stop Hitler.
    It is by DESIGN that people will gain control over their lives.

  4. Jason Ruspini says:
    July 11, 2009 at 10:52 AM

    Yes, ideas matter. The main speculator I had in mind is an influential business that rationalizes commodity price spikes from time to time. I feel like this regulation is mainly directed against those sorts of businesses, and ETFs.

    A very powerful idea is “energy-as-currency” as it tries to divorce price from supply and demand for use.

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