Comment Text:
To: Commodity Futures Trading Commission
Dear Sirs,
Regarding the e-mail I received from Senator Nelson [D-FL] yesterday [please find the text at the bottom of this e-mail]:
I do not agree with Senator Nelson’s proposed bill and would rather see a focus on rooting out manipulators rather than punishing a category of traders, many of whom are not US citizens, known as “speculators”, whose participation has been shown to actually contribute to US and global oil market liquidity in times of stress.
First, if there is a flaw, it is in the low margin requirement for oil speculators: it should be in the range of 20 to 30-percent. Perhaps the actual margin can and should be flexed monthly according to the relative amount of long and short interests held by financial investors.
Second, I am not inclined to support position limits, preferring more disclosure of who really is the ultimate owner on a more timely basis.
Thirdly, I am concerned that the growing reliance on Index trading, High Frequency Trading and strategic algorithm trading is not entirely compatible with the underlying focus on individual month contracts for specific oils, which are the true “markets” affecting the interests of producers and users.
Assuming it is still true, as the Interagency Task Force on Commodity Markets wrote in its report of July 2008, that
To date, there is no statistically significant evidence that the position changes of any category or subcategory
of traders systematically affect prices. This is to be expected in well-functioning markets. On the
contrary, there is evidence that non-commercial entities alter their position following price changes. This
is also expected because new prices convey information affecting the prospects and the risks of those entities.
I urge the Commission to not pursue the misguided and flawed path proposed by Senator Nelson.
Sincerely,
Kenneth S. Hoyt
4610 Westford Circle
Tampa FL 33618
_____
Dear Kenneth, September 26,2011
“A loaf of whole wheat. A gallon of gasoline. A pair of Levi’s. Americans are paying more for many basic items this year, making tough economic times even tougher.”
Part of the reason, according to The New York Times, is that speculators are still playing games in the marketplace. Our regulators allow them to wildly bid up the price for everyday items we need, like wheat, gasoline and heating oil. Click here to read The Times article.
Despite a clear directive from Congress to rein in excessive speculation, our watchdogs in Washington seem to be listening more to Wall Street, and not acting quickly enough to protect American consumers. Consider: On any given day about half of the oil futures contracts are bought and sold by traders, not companies that use oil, like airlines and power companies. And the sky’s the limit when it comes to how much of the market traders can control.
To help stop the manipulation of commodities prices, send an e-mail now to the Commodity Futures Trading Commission - and tell the members to stop speculators from interfering with the price of food and energy. Tell the commissioners to stop listening to Wall Street lobbyists. Tell them to impose meaningful position limits.
And while you’re at it, forward this note to your friends, family and others who care about this issue. If the commission hears from enough folks, it’ll adopt stronger rules next month when a vote is scheduled.
Sincerely,
Signed by Bill Nelson
