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’Gensler on CDS regulation: many a mixed metaphor
CFTC Chairman Gary Gensler is no fan of derivatives in general, and credit default swaps in particular.
As he told attendees of a Markit conference on derivatives (via Risk magazine):
“I really do think CDSs directly contributed to the financial crisis of the past year-and-a-half,” commented Gensler,
No, it’s true – everyone is shorting the euro
We cautioned a few weeks ago that a little perspective was probably needed when discussing the “everyone is shorting the euro” story.
The CFTC data on which the stories were based, we argued, only reflected of a small sliver of the OTC forex market.
The “Eddie Murphy” rule
Paul Volcker step aside.
The CFTC’s latest trading ruling will be named “Eddie Murphy” in homage to the actor’s famous role in the film “Trading Places”.
Which is apt, because the rule is not about proprietary trading at all,
Craig Pirrong v Gary Gensler: who’s right on OTC derivatives?
We do love a good battle of the intellects here on FT Alphaville, so it was impossible to pass up this opportunity.
On Thursday, the FT featured an op-ed by CFTC chairman Gary Gensler on the topic of derivatives.
A little perspective on the euro?
The “everyone is shorting the euro” story continued to hold court in the financial media space on Monday.
Bloomberg noted that:
“Euro Worst to Come as Greece Hammerlocks ECB on Rates ”
While Reuters observed:
The USO says it is innocent
United States Commodity Funds, the group behind the USO and UNG exchange traded funds, is keenly protesting its innocence regarding the group’s possible connection with volatile energy market moves in 2008,
More from the ‘save our leverage’ coalition
As reported earlier on FT Alphaville, the CFTC is cracking down on the US retail forex market in a big way.
As well as publishing proposals to license all off-exchange retail operators — which the industry broadly accepted as ‘fair enough’ — the regulator unexpectedly announced it wanted to curtail leverage extended to clients to 10:1.
Digging deeper into the CFTC’s position limits
Energy analyst Olivier Jakob from Petromatrix has crunched through the CFTC’s proposals on position limits released last week.
His findings are worth flagging up because they differ to the consensus view that the proposals,
Save our FX leverage!
Pop quiz, FX hotshot.
There’s a bomb in your market. Once your position hits 200:1 leverage, your trade is armed. If your trade drops below your stop-loss, it blows up. What do you?
In an action film,
Is the CFTC trying to restrict physical traders after all?
Thursday’s CFTC proposals on position limits in the energy markets were largely seen as a ‘light touch’ by industry voices. This is because, quantifiably speaking, they set loose limits that hardly went beyond those already enforced by exchanges in the form of accountability limits.
A ‘London loophole’ for FX
The CFTC has had a busy week. On Thursday the regulator unveiled details of how it plans to curb excessive speculation in the energy market.
Earlier on Wednesday, meanwhile, it revealed proposals for the spot FX market — an area that has until now escaped the scrutiny of regulators due to its over-the-counter status.
CFTC targets funds in position-limit clampdown
The oil markets have been waiting for it since the summer of 2009; some players have even acted in anticipation already.
But it wasn’t until Thursday that the commodity world got details of what the CFTC really had in mind in terms of increased regulation of energy markets,
The regulatory muddle in energy markets
John Kemp at Reuters reminded us that the Commodity Futures Trading Commission is due to unveil a raft at new rules, with lots of new tricky details on position limits and exemption guidelines for a whole range of market participants.
Regulator opposes traders’ limits
The US must not unilaterally impose limits on the trading positions that traders may take in oil and commodity futures and should enlist the support of the G20 to crack down on speculation, a top regulator warned on Thursday.
Setback for US oil trade crackdown
US plans for an aggressive crackdown on energy speculation could unravel amid doubts voiced by leaders at the US commodity regulator over proposed reforms. Two commissioners at the Commodity Futures Trading Commission have warned that proposals to cap investors’ holdings in oil and commodities futures could drive trading from US exchanges,
Whatever happened to Deutsche’s ETN liquidation?
Petromatrix’s Olivier Jakob evaluates CFTC weekly trader data on a regular basis, and one thing he was quite looking forward to analysing was the liquidation of Deutsche Bank’s exchange-traded-note — the PowerShares DB Crude Oil Double Long (DXO).
Why the UNG is issuing new units
In case you missed the news, the United States Natural Gas Fund — the exchanged-traded-fund — posted a note to the SEC on Friday saying it planned to restart the issue of creation baskets once again.
Barcap say speculators are not to blame!
Last Friday the CFTC re-categorised the way it presents trader positions in its weekly report to reflect more specifically the type of contracts being held by “managed money” and “swap dealers” — ie,
How effective are speculative limits in commodities anyway?
As has been well-publicised, the Commodities Futures Trading Commission (CFTC) is considering increasing position limits in energy commodities trading, on the perception that large speculative inflows may have contributed to last summer’s epic oil price-moves.
Dresdner/Commerzbank blames oil speculators
Wow, the commods analysts at Dresdner/Commerzbank have taken a rather bold — if slightly self-congratulatory — stand on oil speculators.
In a note published on Thursday, analysts Eugen Weinberg, Barbara Lambrecht and Carsten Fritsch,
Will SEC and CFTC see eye to eye on CDS?
We all now know that the decision to leave the credit default swaps market largely unregulated didn’t really work out too well. The Commodity Futures Modernisation Act of 2000 has even been criticised by those who helped create it.
In defence of energy speculators
The FT reports on Wednesday that:
An unsigned paper opposing trading limits circulating in Houston’s natural gas hedge fund community warns that “domestic liquidity will suffer terribly” as CFTC rules grow more onerous.
Quick! We’re supposed to be regulating this energy stuff…
Our heart goes out to the FSA, who seem to have been caught rather off-guard by the outbreak of regulatory zeal in the US, where the CFTC is promising to run oil speculators out of town – or at least be seen to run the speculators out of town.
Presenting, the ‘physical loophole’
First there was the London loophole. Now, it appears, the development of another entirely new loophole is underway. Let’s call it the physical loophole.
From Intercontinental Exchange CEO Jeffrey Sprecher’s Tuesday testimony to the CFTC on the matter of position limits and the influence of speculators on the price of commodities:
Evil commodities speculators in the dock
The CFTC hearings into the evil commodity speculators have got under way in Washington. Those testifying on Tuesday include:
Panel One: Jeff Sprecher, Intercontinental Exchange and Terry Duffy,
UNG goes OTC
Bloomberg reports the United States Natural Gas exchange traded-fund, which has been buying Nymex and ICE natural gas swaps since at least the beginning of June, has now been pushed into the world of OTC bilateral swaps.