Court Strikes Down CFTC Regulation to Limit Excessive Speculation

[sinkingfeeling]

http://truth-out.org/news/item/12202-court-strikes-down-cftc-regulation-to-limit-excessive-speculation

On September 29, in the District Court of the District of Columbia, Judge Robert Wilkins threw out U.S. Commodity Futures Trading Commission's new position-limits rule, sent the regulation back to the agency for future consideration. Wilkins ruled by law, the CFTC, which was required to prove that the position limits in commodity markets are necessary to diminish or prevent excessive speculation—. So why does that matter? It may sound a little technical if you haven't been following this story, but this decision might affect the cost of your food, the cost of your fuel, and many other basic necessities of life.

GREENBERGER: Position limits are the tool in place to limit Wall Street speculators from gumming up commodity markets. If they are not limited in their speculative bets that they place, they have a tendency to unmoor commodity prices from supply-demand fundamentals.

So, for example, if you look at crude oil, the price of crude oil is way above what it should be if supply-demand just played a role. In fact, you know, most of the big oil companies say crude should be at about $70, $75. It's now—it was up to $100 this week, went down to $91. The simple point is, look at gasoline, which is the main derivative of oil. You're paying a premium that has nothing to do with production and has everything to do with lining the pockets of Wall Street.

GREENBERGER: Well, the short answer is we'll never know the answer, because the big banks are so inflating the market with buying paper contracts that they never have to act on, that send out a false demand signal. So we'll never get a clear picture of what the supply-demand market really is.

But let's look at the price of oil, which you don't have droughts and everything else. Everybody who knows anything about the oil markets tells you that we're flooded with oil right now. Cushing, Oklahoma's where oil is stored, they can't find enough places to store the oil.

[enlightenment]

1. Well, isn't that just precious?

Did the judge miss the bit in class that talked about the role of the judiciary? Because making new law (requiring a majority vote) isn't part of his job.