Futures Industry Association President John Damgard said during the FIA conference in Boca Raton FL. that despite some comments that indicated otherwise, House majority leader Barney Frank is not looking to merge the Commodity Futures Trading Commission and Securities Exchange Commission.
There was some optimism at the Washington outlook panel on Saturday that politicians and bureaucrats tend to say what people want to hear and may not exactly follow that to the letter.
Both Damgard and CME Group Excetive Chairman Terry Duffy pointed out how several studies suggested speculation in Futures markets was not the main driver in higher commodity prices in general and crude oil futures in particular last year despite the growing conventional belief that it was. CFTC Acting Chairman Michael Dunn seemed more open to the possibility that speculation drove prices and distanced himself from the study on speculation released by the CFTC in September. The study presented evidence showing speculation in crude oil futures was not a factor in the run-up to $148 but Dunn pointed out that they only looked at a six-month time frame, which was too short of a time to draw a definitive conclusion.
Duffy wasn’t particularly concerned by comments of CFTC Chairman Nominee Gary Gensler at confirmation hearings that suggested he saw the run up in commodities as the fault of speculators and he was looking to restrict speculation. Duffy distinguished between confirmation hearing comments and how Gensler would operate as Chairman. Damgard added, in regard to the testimony, “[Gensler] left himself some wiggle room.”
Tags: CFTC, excessive speculation
