Over the weekend on his Streetwise Professor blog, Dr. Craig Pirrong had an insightful post about the speculation debate. Pirrong sums it up nicely in his conclusion: “Policy should be predicated on understanding, and therefore research on speculation in commodity markets should be focused on understanding the sources of predictability, and in particular, seeing if [...]
Tag Archives: Speculation
Swapping Restrictions for Liquidity
August 16, 2010
I read with great interest a recent New York Times Op Ed by Betsy Jensen, a grains farmer in Minnesota. Ms. Jensen makes a very good point that has largely been overshadowed in the attention given to the Dodd-Frank Wall Street Reform and Consumer Protection Act and its impact on large banks and businesses. Small [...]
Wheat Convergence Progresses
August 9, 2010
At the CFTC Ag Advisory meeting in Washington DC on Thursday, August 5 I spoke on the convergence in our wheat contract. Since we announced a variable storage rate (VSR) procedure in November, 2009, (to be implemented with the July 2010 contract) we had convergence for the March, May and July 2010 wheat contracts, meaning [...]
Too Much of a Good Thing?
April 29, 2010
A British journal, Applied Economic Perspectives and Policy, recently reprinted a very interesting research paper on the role of speculators in agricultural commodity markets. The piece, “The Adequacy of Speculation in Agricultural Futures Markets: Too Much of a Good Thing?” was written by Professors Dwight R. Sanders, Scott H. Irwin, and Robert P. Merrin from [...]
Our Views on Energy Position Limits
April 27, 2010
I, along with many others, have been talking for some time about the CFTC’s position limits proposal and the issues that it raises for the energy market. On Monday, CME Group submitted our 45-page comment letter to the CFTC. Some key points to think about: There is no credible evidence that shows speculators are responsible for [...]
A Position on Position Limits
April 21, 2010
Last week I participated in a panel at an FIA forum on clearing in New York. Our topic was the CFTC’s position limit proposal for energy commodities – timely as the deadline for public comments is April 26. Joining me on the panel were three of our customers who are active in energy markets, a [...]
Will proposed position limits for energy products limit U.S. markets?
March 29, 2010
Recently CME Group released a summary on our views of the CFTC position limit proposal for exchange-listed energy markets.We are now drafting our formal response, which we’ll submit prior to the end of the April 26 public comment period.The Futures Industry Association submitted their comments on March 18, and you can read what Dr. Craig [...]