Comment Text:
Karl Duff
2205 Riverstone Blvd. - Suite 108
Canton, GA 30114-5227
March 24, 2011
David Stawick
Secretary, Commodity Futures Trading Commission Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581
Dear Mr. Stawick:
Dear Mr. Stawick:
I am a conservative. But I also understand as a lawyer that human impulses need to be curbed by both markets and law. Excessive speculation, outright fraud and the worst aspects of greed hurt the economy in 2008. The same may be true in 2011 based upon the continued failure of Congress to regulate EXCESSIVE and too-highly-leveraged oil market speculation.
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 with appropriate security levels being provided to require speculators to furnish evidence of their financial ability to cover their trades if required to, just as other speculators must; • 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.
If 40% of the current price is caused by excessive speculation (and I've seen the credible expert testimony to Congress that it is), then $5/gallon gas becomes something on the order of $3/gallon, which is below what we presently have. Is Congress so feeble-minded that it has forgotten the over-the-cliff aspect of the last spike in prices and the 2008 events?
Time is of the essence, and I urge you to act quickly. Our pocketbooks and the broader economy depend on it.
Sincerely,
Dr. Karl J. Duff, PhD, JD
770-345-3577
