On Tuesday, Sen. Harry Reid (D-Nevada) introduced yet another bill on designed to "curb excessive oil speculation." This one, however, left out previous bills' calls to impose higher margins on oil traders, such as the one introduced by Sen. Byron Dorgan (D-ND) on June 24 which would require the Commodity Futures Trading Commission (CFTC) to increase margin requirements to 25% for trades classified as non-legitimate hedge trades. Reid's bill calls for "eliminat[ing] excessive speculation by changing the definition of 'legitimate hedge trading' to include only those producers and purchasers of actual physical energy commodities, and places limits on trading by those who are not trading actual physical petroleum products." The Futures Industry Association released a statement on Reid’s bill, calling it a “mixed bag.” “While it mandates appropriate studies and it enhances energy market transparency, the bill has many provisions that would amount to liquidity-robbing, regulatory overkill. We fear that those provisions would undermine the bill’s own transparency goals, make hedging more expensive [and] drive energy market activity overseas,” the statement said.
As we noted, the bill passed by the House on June 26 giving the CFTC authority to use its emergency powers to curb excessive speculation took no real action but was most important in its threat to further action. Last week, the House Ag Committee held hearings to discuss the numerous bills being bandied about Congress with the goal of creating a bipartisan, consensus bill that could move to the House floor before the August recess. Several industry experts weigh in on the bills and the continued heat that speculators are taking in Futures' August issue, available July 25.
Comments (1)
As everyone except me appears to be introducing bills on market speculation, I should as well and here it is:
P.S. Like the Simpsons, I too am really from Springfield
110th CONGRESS
2d Session
S. ________________
To amend the Commodity Exchange Act just for the hell of it.
________________________________________________
IN THE SENATE OF THE UNITED STATES
Mr. JOHNSON (for himself, Mr. H. SIMPSON, Mrs. M. SIMPSON, Ms. L. SIMPSON, and Mr. B. SIMPSON) , all of Springfield, introduced the following bill; which was read twice and referred to the recycle bin on ___________, ____.
___________________________________________________
A BILL
To amend the Commodity Exchange Act by prohibiting any further amendments to the Commodity Exchange Act; to criminalize use of the word "loophole" in the title of any federal law; to require all candidates for Senator or Representative to pass a course in economics first; and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America (in case you don't know where the United States is located) in Congress assembled (where else, Starbucks?),
"SECTION 1: SHORT TITLE; TABLE OF CONTENTS
"(a) Short Title. – This Act may be cited without name.
"(b) Table of Contents: - The table of contents of this Act may be found at the glossary of terms accompanying Jean-Paul Sartre's Being and Nothingness."
A new Section 2 shall read as follows:
"SEC. 2. DEFINITIONS
"(a) Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended –
"(1) by repealing subsections (1) through (33) and by substituting new subsections (1) and (2) as follows:
"(1) COMMODITY. The term 'commodity' shall include everything for which a futures contract exists, has existed or may ever exist even if the Securities and Exchange Commission (or some other regulatory wannabe) wants a piece of it.
"(2) ELIGIBLE CONTRACT PARTICIPANT. [Repeat the pre-existing text and add the following:
"provided, however, no person shall be deemed to be an eligible contract participant in connection with any contract, agreement or transaction that places at risk the funds, securities or property of any person that is not an eligible contract participant."
A new Section 3 shall read as follows:
"SEC. 3. PROHIBITIONS.
"(a) Violations.
"(1) The introduction by any Member of the Senate or of the House of any bill to amend the Commodity Exchange Act shall be deemed a felony under the Environmental Protection Act, including involuntary committal to a mental institution, Guantanamo or a rendition location to be selected by the Vice President for a period of not less than three (3) years.
"(2) Unless determined to be unconstitutionally cruel, any violator of clause (1) of section 3(a) shall be required to testify before committees of the Senate or of the House, as the case may be, no fewer than twenty (20) times before resuming the rights and responsibilities of office.
"(b) Bans.
"(1) It shall be a felony punishable by any of the means set forth in clause (1) of section 3(a) for any Member of the Senate or of the House to recite, in any legislative proposal, at any committee meeting, over lunch, in bed or anywhere else, the word "loophole." The use of such term in conjunction with others, such as (by way of illustration only) "energy loophole" or "London loophole" shall be deemed separate and distinct offenses with respect to each such word."
A new Section 4 shall read as follows:
"SEC. 4. KNOWLEDGE-OF-SUBJECT-MATTER REQUIREMENT.
"(a) Writing and Talking.
"(1) No Member of the Senate or of the House shall present by any means a view about the commodity markets or any other aspect of the financial community unless it is verifiably true and accurate in all material respects.
"(2) Any use of the term "speculator" or "speculation" must be accompanied by the name, address, and phone number of the person to whom the word refers.
"(b) Education.
"(1) In support of the purposes of section 4(a), each Member of the Senate and of the House shall successfully complete a Masters Degree in economics, taught by a Nobel nominee or better, before being entitled to speak or write on any subject relating to commodity or other financial markets. The employment of eager, 20-something staffers shall not substitute for this prerequisite."
A new Section 5 shall read as follows:
"SEC. 5. REPORTS BY THE COMMODITY FUTURES TRADING COMMISSION
"(a) Periodic Reports.
"(1) The Commodity Futures Trading Commission shall file with each of the committees having primary oversight responsibilities for its actions a report certifying for each of the preceding 180 days of operations that it has not received by letter, telephone or any other means or instrumentality of communication any complaint, demand, rude inquiry or hostile vibe from any Member of the Senate or of the House.
"(b) Immediate Notification.
"(1) If any event occurs that prevents the Commodity Futures Trading Commission from making the certification required by clause (1) of section 5(a), the time, place and nature of the incident shall be reported immediately to the Capitol Architect who is hereby directed within 24 hours of such notification to disconnect the HVAC to the office of the Member cited in the report and to suspend for a period of 30 days such Member's right to free parking at Reagan National Airport."
A new Section 6 shall read as follows:
"SEC. 6 REPEAL OR WITHDRAWAL OF PENDING BILLS
"(a) All bills, resolutions, restroom wall markings or other writings that relate to the commodity or financial markets are hereby withdrawn if not enacted and repealed or erased, as the case may be, if it is too late."
Posted by Philip McBride Johnson | July 18, 2008 8:10 AM
Posted on July 18, 2008 08:10