Answers
The CFTC reports a weekly Commitment of Traders report for commodity futures. They split the commitment between "non-commercial" and "commercial". Is non-commercial individual investors? Is commercial investment banks and funds?
According to the glossary on their site, they define "commercial" as
"An entity involved in the production, processing, or merchandising of a commodity."
See Jim's full profile at: www.nationalpress.org
cause of the current economic situation?
The mortgage default rate, those facing foreclosure or more than 30 days behind, is less than 10% of all mortgages. This alone could not conceivably cause the current situation. CDO's are basically 'protection' or insurance purchased by financial institutions to protect them from loss if the packaged derivatives go into default. They are bought with a defined length of time, usually five years. Problem is that because of the risky loans packaged in these derivatives as well as good mortgages, credit card debt, student loans, when one fails the entire derivative loses value. By plunking down millions of dollars, a hedge fund or investment bank could reap billions once these fatally constructed securities plunged. Again, the funds did not need to own the securities; they just needed to pay for the derivatives—the insurance policies for the securities. And they could pay for them again and again. This was known as replicating.
At almost $600 trillion, over-the-counter (OTC) derivatives dwarf the value of publicly traded equities on world exchanges, which totaled $62.5 trillion in the fall of 2007 and fell to $36.6 trillion a year later.
So we should thank Alan Greenspan, former Chairman of the Federal Reserve, Robert Rubin, Treasury Secretary in the Clinton administration, his deputy, Lawrence Summers, Bill Clinton for signing the Commodity Futures Modernization Act into law and the 106th Congress for passing the act?
Should we have heeded the warnings of Brooksley Born, who headed the Commodity Futures Trading Commission (CFTC) at the time and Warren Buffett who warned of the ultimate collapse, calling these 'financial weapons of mass destruction?
grob, I did include the entire 106th Congress of which Gramm was a part.
There is no smoking gun. It was a piece but people are looking for a single keystone and there really isn't one...
You also fail to mention that Economist and former Sen. Phil Gramm - John McCain's Economic Advisor - tacked this onto other legislation before anyone had a chance to read it before a Christmas break.
If you believe this is the cause it'd be nice for you to include him since he wrote it.
Schapiro, who was previously chairman of the Commodity Futures Trading Commission and an SEC commissioner, currently oversees the Financial Industry Regulatory Authority, the watchdog that supervises nearly 5,000 U.S. brokerages. Yet, she failed to detect or uncover the $50 Billion Ponzi scheme run by Bernie Madoff. Does her failures now qualify her for the promotion to SEC chair in Obama's estimation? This is change we can believe in?
Even before he got elected, I always said he had poor judgment and no real accomplishment. Of course with all the loud chanting of "change and hope", no one cared! Now we are stuck with this inexperienced president who will make mistakes and not learn from them.
US Department of Energy:
""The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.""
Fortune Magazine: ""The infamous December 2000 "Enron loophole" is the topic du jour in Congress. That legislation didn't just make it easier for savvy traders to buck the system. It exempted entire over-the-counter electronic exchanges (where trading takes place directly between parties, without an intermediary broker) from regulatory oversight by the Commodity Futures Trading Commission.
As a result, capital zoomed to new unregulated exchanges like Atlanta-based ICE, an American firm operating under U.K. regulation, where trading volume tripled from 2005 to 2008, representing 47.8% of global oil futures trading.""
http://www.eia.doe.gov/oiaf/aeo/otherana lysis/ongr.html
http://money.cnn.com/2008/07/07/news/eco nomy/oil_prins.fortune/index.htm?section =money_mostpopular
Link for Fortune magazine article via CNN
It has come to light that a very few oil speculators actually control the market. The layer of speculation, by a few, precludes actual free market forces for they are being manipulated. Thus, resolving the oil speculation would reduce oil prices immediately
I know SEC regulation D is related. How about federal security act? Civil law? Business law? State law? Commodity Futures Trading Commission ? National Association of Securities Dealers? I would like everything related to shareholders right within this context. thank you.
www.findlaw.com
Gensler: CFTC Should Be Charged With Policing Carbon Markets
By Sarah N. Lynch, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The head of the U.S. Commodity Futures Trading Commission on Tuesday again made a pitch for granting his agency authority to oversee the nascent carbon markets if Congress enacts new climate change legislation.
"As Congress moves forward, I believe it should fully regulate the expanded carbon markets--including the futures market, the [over the counter] market and the cash market--without exception," CFTC Chairman Gary Gensler said in a speech before the Natural Gas Roundtable.
"While other regulators would be in charge of the 'cap' part of 'cap-and- trade,' the CFTC has broad experience regulating the 'trade' part of existing emissions markets. To get the most benefit from a cap-and-trade program, it is essential that the trading markets are fair and orderly and that the price discovery process instills confidence," he added.
The move by the CFTC to regulate a portion of the carbon market raises some jurisdictional questions because the Federal Energy Regulatory Commission, or FERC, has traditionally policed for manipulation in the spot markets.
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