As the investigations grind on and on and on, the facts are begriming to float to the surface like so many dead fish. It now appears (with every possible spin) that 49% of the traders/trades in crude oil over the last few months indeed were speculators or in the terminology of the report "non-commercial market participants."
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As a result, the number of futures and options contracts held by traders counted as speculators -- those who don't have a commercial need to mitigate the risks of energy prices in their business -- rose to 49% of all crude-oil bets outstanding on the New York Mercantile Exchange, up from 38%.
Meanwhile, a debate is erupting within the agency, which is charged with overseeing the $4.78 trillion commodity futures and options markets, about what the agency does and does not know about participants in this market. The CFTC has been accused by some in Congress this year of lax oversight.
[For a point of reference, the US GDP is currently estimated at around 14.2 trillion in CY dollars. see"He frantically called his contacts in the markets. "I couldn't find anything, no news at all, to change the fundamentals of the cotton business," he says. Yet by day's end, prices on the usually staid market had leapt 15%, and the next day 16% more, before falling back. Investors faced two bleak choices: Come up with far more cash to keep the losing bets on, hoping for a turnaround, or unwind them for steep losses."
"Fallout has been significant for farmers, traders and textile mills. Many cotton shippers are no longer bidding for crops months before harvest and thus are rendering futures markets less effective as risk-management tools, Undersecretary of Agriculture Mark Keenum told the CFTC in April. That situation continues.
And the prices of cotton? After touching $1.09 a pound in the tumult of early March, it closed Tuesday at about 67 cents." ============
Unka' George [George McDuffee]
------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).