By Kevin G. Hall
McClatchy Newspapers
Published: Wednesday, Oct. 19, 2011 – 12:00 am | Page 6B
WASHINGTON – The ability of big financial speculators to manipulate the price of oil and 27 other commodities will be limited under new rules adopted Tuesday by the Commodity Futures Trading Commission.
Yet even as the CFTC approved the new rules to rein in excessive speculation – on a 3-2 party-line vote, with Democratic commissioners in the majority – some financial-market analysts and members of Congress complained that the new rules fall short of what’s needed to effectively curb speculation.
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Whose country is it? Wall Street occupies the regulatory agencies
By Steve Suppan, Guest Blogger, Triplecrisis, 17 October 2011
The Dodd-Frank legislation allows an exemption on position limits for commercial hedgers, i.e., commodity users, such as grain or energy companies, and only for the commodities whose price risks they hedge. A leaked version of the draft CFTC rule reportedly would expand the exemption to allow major financial players to qualify for this exemption upon making a “good faith” claim that they were trading on the other side of a commercial hedge. Expansion of the very limited Dodd-Frank exemption would undermine both the legislation and commercial hedgers.