Comment Text:
Glen Washington
132 Diamond Grove Rd
Beech Bluff, TN 38313-9146
April 6, 2011
David Stawick
Secretary, Commodity Futures Trading Commission Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581
Dear Mr. Stawick:
I realize there are many factors influencing the oil market: demand, strength of the dollar, supply to be the 3 major influences. However, recently oil has experienced an almost 50% surge in price. Why is that?
Has supply decreased? The middle east has certainly experienced some instablility, but the flow of oil from the middle east has not decreased significantly. Has demand increased by 50%. While the world economy seems to be improving some, it has not suddenly increased by 50% (has the GDP of the world increased suddenly by 50%). Has it been the strength of the dollar? While the dollar has been weak, it has not changed by 50% compared to the other currencies of the world. So what has caused a spike in oil? Since Hurricane Katrina, the oil market has become the place to make quick money when "demand" or "supply" might possibly be questioned.
Look at the data. And now, since the stock market is so volatile and the chances of big money being made in the stock market removed, traders have taken their money to energy / oil.
Traders with money trading in oil. They don't even have to take possession of the oil. They can buy futures and sell them. Our current rules allow them to manipulate prices and make money on this manipulation
- not make money on the product itself.
As a rule maker, it is your responsibility to us, the public, and to citizens of the world to prevent this unethical and even immoral manipulation of the oil market - which the world requires to live - for a few to get rich and make money - AT THE EXPENSE OF THE WORLD. Shame on them, and shame on those that write the laws that allow this.
I hope you will do the right thing.
Excessive speculation hurt the economy in 2008 and, once again, is harming the economy in 2011. According to data recently released by the Commission, speculators have raised their positions in energy markets by
64 percent compared to June 2008, bringing speculation to the highest level on record.
We need meaningful, effective speculative position limits to restore balance to commodities markets and ensure that they are connected to market fundamentals, so that they fulfill their price-discovery function properly and without distortions caused by excessive speculation. In particular, I:
• support the Commission's immediate adoption of spot-month speculative position limits; • urge the Commission to adopt effective back-month levels that will accomplish the legislative purpose of curbing excessive speculation; • urge the Commission to adopt single-month limits that are no higher than two-thirds of the all-months-combined levels; • urge the Commission immediately to adopt a position-accountability regime for the nonspot months in place of its proposed position-visibility rule; and • urge the Commission to adopt lower speculative position limits for passive, long-only traders.
Time is of the essence, and I urge you to act quickly. Our pocketbooks and the broader economy depend on it.
Sincerely,
Glen Washington
7312254699
