Are margin hikes Obama's version of Nixon price controls?
- Thread starter benwm
- Start date
I traded on the floor for years. CME group raised the margins to protect their clearinghouses. Why the conspiracy theories? Doesn't it make sense that as contract grow in absolute dollar value and volatility increases, the exchange should make sure that their policies protect their most important members (FCM's)?
In fact, it is this solid policy making that makes Chicago traders proud of their marketplace. you always get paid when you win. If the banks had been this responsible with pricing, margining, and clearing of their derivatives, the bailouts whouldn't have been nearly as big, if they happened at all.
CME and Advantage and Penson et cetera never needed Fed money because they are responsible members of the financial community, Unlike some that could be named.
In fact, it is this solid policy making that makes Chicago traders proud of their marketplace. you always get paid when you win. If the banks had been this responsible with pricing, margining, and clearing of their derivatives, the bailouts whouldn't have been nearly as big, if they happened at all.
CME and Advantage and Penson et cetera never needed Fed money because they are responsible members of the financial community, Unlike some that could be named.
That's all fine and dandy and most of us get that.
More often than not, the timing of margin increases, in particular when they happen concurrently in a very short time span are more than suspect.
It's also a bit curious with the dollar close to testing the 2008 lows that silver margin changes were taken on.
As others have said, why weren't they adjusting them 3 weeks, 6 weeks, 2 months ago? Heck the metal moved from the mid twenties to fifty, it essentially doubled in a short period, it would have been far more believable had they been doing this once every other week or something similar.
I don't see how margin requirements are like price controls.
Price controls cap the price of something, granted. Margin requirements kick certain people out of the market who cannot pony up the cash, but it doesn't kick everyone out. Say a fund calculates silver is now underpriced by 25%, they can decide to invest in it instead of another asset. This would eventually bring the price of silver higher.
Price controls cap the price of something, granted. Margin requirements kick certain people out of the market who cannot pony up the cash, but it doesn't kick everyone out. Say a fund calculates silver is now underpriced by 25%, they can decide to invest in it instead of another asset. This would eventually bring the price of silver higher.
I don't think it ever moved the the equivalent of $30,000/contract in less than 15 minutes during the run up, though. :eek:
If by "liberal" you're referring to "socialist", "anti-business", "big government" and other such Hot Button Phrases for Dummies, you've got to be kidding.
The media are controlled by large publicly-traded corporations, which are far from "liberal":
CBS, DIS, GE, NWS, TWX, & VIA
Through their control of over 90% of what Americans watch and read, these corporations are able to manipulate your belief systems in ways that provide maximum benefit to themselves and their sponsors (most of which are also large publicly-traded companies).
They can easily brainwash you without you having the slightest clue that your beliefs have been, and continue to be, carefully molded to result in the greatest profitability for them and their sponsors.
The ways they do this are so clever, seamless, manifold and constant that even those who consider themselves well above the average barely stand a chance of seeing through all the bullsh*t we're fed 24/7.
I suggest you read Noam Chomsky. "Manufacturing Consent" is a classic, but not an easy read for most of us raised on the pablum of 30-second ads, sitcoms, tweets and a sound-bite electoral process designed to keep the power structure exactly as it is regardless of which party wins.
Interesting post, below is a link to "Manufacturing Consent" a 2.5hours documentary based from the book. I haven't watched it (yet) but there you go :
http://video.google.com/videoplay?docid=-5631882395226827730#
yeah this will be quite interesting, i wonder if they raise margins too high if that will cause a comex default on silver as well
Chomsky may have some good insights re: mililary industrial complex, corporatism, media, etc., but his fuzzy, Utopian economic ideas would fail as bad as the Soviet Union. If he had it his way, he'd use violence if necessary to push his views of "justice," just as current regimes do.
The media is certainly not pro free-market. Pro-corporatism and soft socialism? Sure. But look at the lamestream press' views on regulations, taxes, unions, etc. The last thing MSNBC wants is a truly competitive marketplace. (GE, whom you mentioned, is minority stock owner of MSNBC).