Comment Text:
10-005
COMMENT
CL-01565
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Sent:
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Cc:
Subject:
James Akers
Friday, April 9, 2010 12:46 PM
Metals Hearing ; Gensler, Gary
Chilton, Bart ; Dunn, Michael ;
O'Malia, Scott ; Sommers, Jill
My comments on the metals hearing and position limits
Dear Chairman Gensler and Commissioners
I have written the CFTC on several occasions re: the
concentration/manipulation of the metals markets,
most recently just before the March 25 hearing. In that email I pointed
out my own observations of how the silver and gold markets
"coincidentally" began moves at exactly the same minute.
I was able to watch the hearing online from the beginning through Panel
3. The hearing for all to see only expanded on my very limited view of
the effects of concentration in the metals markets. In my opinion, the
most impactful testimony was that of trader Mark Epstein (humorously
called "traitor" in the close captioned text) who being so close to the
action every day was able to describe the adverse effects major players
have. And the subsequent revelations of trader Andrew McGuire in his
real time expose to the CFTC make the establishment and enforcement of
position limits absolutely mandatory.
The testimonies by various parties (such as HSBC, CME, LME and others if
I recall correctly) against position limits essentially boiled down to
"trading will go elsewhere"--a pretty lame and underwhelming
argument. It is certainly no reason that the CFTC shouldn't do what
it's supposed to do--regulate the commodities markets here in the USA.
The failure of other government agencies (think Madoff, the sub-prime
mortgage crisis etc) to do their jobs should certainly inspire the CFTC
not to fall into the same category.
One can only conclude from the hearing that it is imperative that the
CFTC must establish position limits in the metals markets, particularly
silver where the most abuse appears to exist. 1500-2000 contracts would
seem to be reasonable with exemptions limited to legitimate hedgers.
The concentration on the short side would and should be eliminated with
these limits in place.
Sincerely,
James Akers
Chicago IL
