CFTC Commsssioner:One trader holds 40% of silver market,another one 20% of oil

[ASusilovic]

Many of us learned, however, that while there may not be such a thing as too much speculative money, that same money might be too concentrated. We saw very large concentrations of trader positions in 2008. That has continued. Since then, we saw one trader hold more than 20 percent of the crude oil market. Even earlier this year, one trader held over 40 percent of the silver market.

http://www.cftc.gov/PressRoom/SpeechesTestimony/opachilton-35.html

So, Copper on LME 50%-80% in the hand of "one trader", silver 40 %, oil 20 %. And you thought, you are executing in a "free market environement" ? Hum : NO.

 

[ASusilovic]

Implementation

When Congress passed the new reform bill this past July, it determined mandatory speculative position limits were required. Of the more than 40 rules that the CFTC is required to promulgate, most are required to be completed by next July. Only a few have shorter deadlines. Mandatory position limits are in that small group and are required to be implemented by mid-January for energy and metals contracts.

You may have read news stories recently where some say we can’t make that deadline, shouldn’t make that deadline, need to hold off until we get more data or better data so that the levels can be calculated with exact specificity. In an idyllic world, that might be fine. Congress, however, gave the agency the earlier implementation date for a reason—so that we put limits in place now, not some later time of our choosing. Additionally, the law provides no such authority for regulators to delay the imposition of these limits. There is no regulatory escape valve.

That hasn’t, however, slowed some folks down. There are creative suggestions for ways around the implementation requirement. Some proffered that the agency formally approve a final rule and consider that step as “implementation” under the law. At the same time, the rule would not make the limits effective until sometime in the future. They essentially propose the agency implement a rule on time without implementing it on time—without making it effective. If that sounds convoluted, it is. That sort of dancing on the head of a legal pin is exactly the variety of Washington-speak that makes folks in our country furious. I’d also bet that those in Congress who wrote the provision would have an opinion on the matter.

When President Obama signed the new law, he said the reforms “represent the strongest consumer financial protections in history.” The mandatory position limits provision is one of those consumer protections. The CFTC has an obligation to do what Congress and the President instructed us to do . . . and on time.

.....

 

[Ghost of Cutten]

Quote from ASusilovic:

Many of us learned, however, that while there may not be such a thing as too much speculative money, that same money might be too concentrated. We saw very large concentrations of trader positions in 2008. That has continued. Since then, we saw one trader hold more than 20 percent of the crude oil market. Even earlier this year, one trader held over 40 percent of the silver market.

http://www.cftc.gov/PressRoom/SpeechesTestimony/opachilton-35.html

So, Copper on LME 50%-80% in the hand of "one trader", silver 40 %, oil 20 %. And you thought, you are executing in a "free market environement" ? Hum : NO.

Is it a free market if someone can tell someone else how much they are allowed to hold? If someone wants to own 40% of the world's silver supply, why shouldn't they be able to? Position limits apply to futures, not to the cash commodity.

 

[FightTheFuture]

40% in silver? What happens when the other 60% panic sell?

They are expecting a risk free bailout which has become the norm.

History repeats:

http://en.wikipedia.org/wiki/Silver_Thursday

 

[brokenmarkets]

market collusion and market manipulation is illegal.

the buyers gets ripped off. naked shorting and selling worthless bonds etc..it's all about maintaining a fair market for all market participants. fair market price.

monopolies are illegal too..free market capitalism means free from market collusion. no illegal monopolies, no market manipulation etc.. i think most of this legal stuff is known to professionals.

by your same logic why is insider information even illegal...insider information isn't immoral and in my opinion there is no insider trading as information always gest leaked..by the time it's 'news' and you can't trust the news.

and with market manipulation you get these crazy crashes it's just screws up the market. and market corrections. the oil and commodity markets are 'illegal' meaning only handful or real sellers and buyers who actually deliver and ship the oil. the saudis and a few oil suppliers can shut down oil supplies if it wanted to. but that would piss off importers of oil. and oil consumers.

Quote from Ghost of Cutten:

Is it a free market if someone can tell someone else how much they are allowed to hold? If someone wants to own 40% of the world's silver supply, why shouldn't they be able to? Position limits apply to futures, not to the cash commodity.

 

[dumb_mother]

Quote from Ghost of Cutten:

Is it a free market if someone can tell someone else how much they are allowed to hold? If someone wants to own 40% of the world's silver supply, why shouldn't they be able to? Position limits apply to futures, not to the cash commodity.

+1

if you had the wealth of bill gates there should be no issue whatsoever with you putting every dollar you have in silver if that is what you want to invest your wealth in (hell you should even be allowed to do it at 10:1 leverage if you wish). it's a shame so many people want to rid themselves of the personal responsibility that comes with making a decision, but rather look to the government for permission at every turn (or expect others to). the government should be completely hands-off on the economy and there should never be a bail out for anyone. the government shouldn't even back bank accounts as it does because when you give people rope to hang themselves on, they hang themselves eventually.

it will be interesting though if these absurd rules do get enacted, it could easily be a catalyst for a huge crash in commodities (however breif it may last) as these concentrated positions are liquidated. although since it sounds like they are on the positions are held on the LME it is also quite likely that the US government has no jurisdiction there so it won't matter anyways.

Quote from ASusilovic:

A mystery buyer is apparently holding more than half of the copper stocks at the London Metal Exchange's warehouses, the latest revelation of how a single trader can roil an entire commodities market.

That trader, whom the exchange hasn't identified, owns between 50% and 80% of the 355,750 metric tons held in LME-listed warehouses. This amounts to more than 177,875 metric tons of copper, valued at about $1.5 billion. The exchange first disclosed the large position on Nov. 23 in its daily inventory holder report.

http://online.wsj.com/article/SB100...44174898.html?mod=WSJEUROPE_hpp_MIDDLETopNews

also look at the copper position- it is a mere 1.5 billion$ position, so there are 64 people who could personally hold this position while placing less than 15% of their wealth in 1 position (which most people would not view as overly concentrated position). there are also 616 people who could have that position without any leverage. so in a nutshell, who cares, let them do what they wish, just don't bail them out if they are wrong. the government should pass laws making it completely illegal to bail out any parties on any transaction in the future.

http://www.forbes.com/lists/2010/10/billionaires-2010_The-Worlds-Billionaires_Rank.html

 

[trendy]

Quote from dumb_mother:

+1

if you had the wealth of bill gates there should be no issue whatsoever with you putting every dollar you have in silver if that is what you want to invest your wealth in (hell you should even be allowed to do it at 10:1 leverage if you wish). it's a shame so many people want to rid themselves of the personal responsibility that comes with making a decision, but rather look to the government for permission at every turn (or expect others to). the government should be completely hands-off on the economy and there should never be a bail out for anyone. the government shouldn't even back bank accounts as it does because when you give people rope to hang themselves on, they hang themselves eventually.

it will be interesting though if these absurd rules do get enacted, it could easily be a catalyst for a huge crash in commodities (however breif it may last) as these concentrated positions are liquidated. although since it sounds like they are on the positions are held on the LME it is also quite likely that the US government has no jurisdiction there so it won't matter anyways.



also look at the copper position- it is a mere 1.5 billion$ position, so there are 64 people who could personally hold this position while placing less than 15% of their wealth in 1 position (which most people would not view as overly concentrated position). there are also 616 people who could have that position without any leverage. so in a nutshell, who cares, let them do what they wish, just don't bail them out if they are wrong. the government should pass laws making it completely illegal to bail out any parties on any transaction in the future.

http://www.forbes.com/lists/2010/10/billionaires-2010_The-Worlds-Billionaires_Rank.html

Thanks for saving me the time of calling you a Dumb Mother.

 

[dumb_mother]

Quote from trendy:

Thanks for saving me the time of calling you a Dumb Mother.

always better if your opponent thinks you are bad at what you do- just ask OMGclayaiken

i also notice that you can't tell me what part of my position you disagree with. is it the part where i think you should be able to invest your own money how you see fit? or the part where i say that if it doesn't work out you should eat your loss and never look to others to bail you out?