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(The New York Times)   New regulations protecting consumers from Wall Street brokers abruptly put on hold after Commodities Futures Trading Commission head Gary Gensler is hospitalized after breaking several ribs in a "fall" at his home   (dealbook.nytimes.com) divider line 5
    More: Unlikely, Gary Gensler, Commodity Futures Trading Commission, Commodity Futures, Wall Street, electronic components  
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1989 clicks; posted to Business » on 12 Sep 2012 at 4:11 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-09-12 03:13:58 PM  
2 votes:
Unless they're going to forbid bidding on commodities futures from everyone except folks who can take delivery, I don't want to hear it.
2012-09-12 12:55:10 PM  
2 votes:
I just don't think people realize how strong that regulatory body needs to be.
2012-09-13 01:04:03 PM  
1 votes:

jjorsett: TheBeastOfYuccaFlats: Unless they're going to forbid bidding on commodities futures from everyone except folks who can take delivery, I don't want to hear it.

Uh huh. Here's a thought experiment: you're a chocolate maker and have bought a bunch of futures for delivery of cocoa later in the year. Suddenly a government report comes out saying that chocolate causes cancer. Chocolate sales plummet and you aren't going to need all that cocoa now. Absent 'speculators', who are you going to sell those futures to? All the other chocolate makers are in the same boat; they don't want the futures either. The value of your hedge goes to zero. When 'speculators' exist, there'll be a market and somebody on the other side to take the trade, and while you'll lose money, you won't lose it all. Plus you won't get the wild price gyrations that you get when something is thinly traded.


Investing (and business) is not a zero-risk situation. Nor should it be.

All your ideas are nice, in theory, but in practice the result is that speculators go from commodity to commodity, inflating futures prices far beyond the factors of supply and demand.

So I find your thought experiment entirely unconvincing.
2012-09-13 05:38:09 AM  
1 votes:

thomps: Headso: With its chairman laid up, the agency has canceled a public vote scheduled for Wednesday. Instead, the agency's five commissioners will vote in private, producing a final tally by next week.

What reason other than some shady activity would you have for doing that? seems crazy

yeah i was really hoping they would provide some sort of justification for this in TFA. really weird


"Private" was just a really bad word-choice from the reporter. It's not "private" as in "secret", it's "private" as in "not holding a public meeting". It should've been "via seriatim" (aka via group email vote). They'll still realease opinions/speeches and the record of who voted for and against.

They obviously can't hold a public meeting while the head commissioner is in hospital. Voting via seriatim means they can still get the vote done. Nothing controversial/shady about it at all. (If you google it, the CTFC actually passes a fair number of regulations via seriatim.)
2012-09-12 03:01:50 PM  
1 votes:
"he fell on some bullets"
 
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