Once again there are a handful of open positions at the Commodities Futures Trading Commission (CFTC). First Jill Sommers, then Gary Gensler and now Bart Chilton are leaving. This agency’s mandate is to regulate commodity futures and options markets in the United States. Unfortunately, it is being run by people who have never traded commodities, run a clearinghouse for commodities or sat on an exchange board.
There is something inherently wrong with this thought process. It would be like me sitting on the medical practices board. Although I am sure that all the people on the CFTC have IRAs and other brokerage accounts, that doesn’t make them experts, just like having health issues doesn’t put me in a position to regulate doctors.
What does this mean when people with so little trading experience run an agency? Simply a replay of the past. Clearinghouses and financial services firms such as Refco, MGF and PFG have collapsed as a result of faulty oversight by the very agency pledged to oversee them. It will happen again.
On August 23, the Wall Street Journal wrote an article titled “Regulator Moves on Trading.” While it was very well written, it didn’t give any background information on why the CFTC is so behind on addressing electronic trading issues.
The CFTC has a long history of being late to the party on a majority of major issues, while being reactionary on issues that have cost hundreds of millions to the trading community. Unfortunately, in Washington many fingers are pointed and no one ever seems to be held accountable.
Former chairman and CEO of MF Global Jon Corzine testifies Dec. 15, 2011, during a Financial Services Committee hearing on Capitol Hill in Washington. The committee found that Corzine personally ordered the transfer of customer funds to cover company losses. (Alex Wong/Getty Images)
The trustee of bankrupt MF Global Inc. settled a dispute with J.P. Morgan March 19 that will see $546 million returned to customers. Some experts think the settlement helps to return client funds quickly while others think J.P. Morgan got off too easy.
James W. Giddens, Trustee for MF Global Inc. said, “This is a significant milestone in returning assets to former customers … ending what would have been a costly, protracted, and uncertain legal battle.” He also said that the settlement avoids yearlong delays in returning money to customers. Continue reading →
Why Are Gas Prices So High? Here Are A Few Reasons
As an oil trader, I would tell my friends when I get upset about how much it costs to fill up my car. You know prices are out of control. Over the years, I have heard and experienced every excuse in the book for high gas prices. During my career as a NYMEX crude oil Pit Trader, there have been many real issues for the spikes in gas prices – such as the Gulf War, strikes in volatile oil producing countries, natural disasters like hurricanes, refinery shut downs, and countless speculation issues. Continue reading →
The Difference Between the SEC Handling of Heinz and Washington’s Handing of the Leak of the SPR in Oil is….
the SEC took action. Below is an email sent to a contact in the White House on June 24, 2011 telling the President exactly how to find out which companies might have had inside information. A contact in the White House was working on the jobs council. I had also spoken with him about the run up in gas prices. I realized that, after speaking with him for over 30 minutes, he didn’t understand what I was talking about. Continue reading →
THERE IS NO HOPE IN TRADING. It is like I tell my executive coaching clients who trade – If your thoughts keep returning to “I hope it goes up” or “I hope it goes down”, GET OUT!!! Get flat and take another look at your view of the market. Hope is on a date with an old friend of mine and, trust me, it is not going well. Too many traders are concerned about being flat and missing part of the trades. Don’t be. You can always get back in. No one catches every part of a trade. Being flat is the best and only way to think clearly, even if its just for a moment. How many of you have been crushed in a down move by hoping the market would go back up or saying “ this market has to bounce“? The most important thing about understanding market movements is that the market doesn’t have to do anything. No one is bigger or smarter than the market, and if you think you are, in time you will be carried out like so many traders before you that you never heard about. Continue reading →
What does the Inauguration and my second wedding have in common?
Positively nothing and that is the issue!!!!!
In my early 20′s, while getting ready to walk down the aisle, there was hope and change for my future. After many years hope of the relationship went out the window and it was time for a change. Continue reading →