There was a surreal exchange between Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler and Commissioner Michael Dunn during Tuesday’s open meeting of the Commission where final rules for position limits and Derivatives Clearing Organization (DCO) core principles were approved. (more…)
We noted earlier this week how a recently released United Nations report on price formation in commodity markets had recommended that government take an active role in attempting to manage commodity prices.
We found this disturbing and pointed out how the report acknowledged some of the fundamental factors behind the recent surge in commodity prices but then ignored them in seeking solutions.
Well now the United Nations has wandered into the analysis of what is going on in commodity markets, releasing a report this week, and appears to have fallen into the blame speculators camp. While I did not read the 80-page report cover to cover, some of the recommendations in the UNCTAD (United Nations Conference on Trade and Development) report are downright scary.
The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the United States District Court for the Southern District of New York against three energy trading firms and two individuals charging them with unlawfully manipulating and attempting to manipulate WTI crude oil prices traded at the New York Mercantile Exchange (NYMEX) from January 2008 to April 2008.
When silver dropped precipitously off of its near $50 high at the beginning of the month some people saw it as the bursting of a bubble. Other more constrained analysts saw it as a long overdue correction and or reaction to a reversal in the dollar and would wait for more information before giving the move more significance.
Yet there were others who saw the sharp rise in margin requirements by the CME Group as proof of a conspiracy. Margins did go up sharply but so had price and volatility making silver more risky and thus requiring more money to back positions.
