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monk
11 Comments
Wall Street Breakfast: Must-Know News
".......Important... a well-designed supervisory regime complements rather than supplants market discipline. Indeed, regulation can serve to strengthen market discipline, for example, by mandating a transparent disclosure regime for financial firms."
www.federalreserve.gov...
Could Bernanke's speech today be the catalyst for a "game changer", i.e. a big plus for CME?
Support for Freddie - Fast Money Recap (8/20/08)
FRE and FNM have been technically insolvent for years. Gross is now all the sudden piping up? and Greenspan (who now works for PIMCO) also pushing for Nationalization!?!
They are simply Seizing an opportunity to talk PIMCO's book. Gross push's the public opinion to panic, FRE and FNM get nationalized and PIMCO makes BILLIONS on a massive spread tightening.
Anyone out there do an honest days work?
Meanwhile the financials get pummeled and sentiment goes south.
Speculators Bigger Players in Futures, Options Markets Than Thought
The Congressional hearings held some weeks ago with the CFTC, Traders, University Professors, CME, ICE, etc. concluded that commodity exchanges are functioning properly.
ALL issues regarding margin requirements and investment limits by speculators, pensions, etc were VETTED. It is EXTREMELY unlikely there will be any HEAT put on the CFTC regarding additional regulations for exchanges. The Congressional Committees fully understand that margin requirements are to protect the exchange's risk and increasing requirements is a penalty/tax on commercial users, if set higher could have unintended consequences. Furthermore, changing speculator limits could also lead to problems.
Congress may bark at the CFTC but they are not going to BITE! Demanding exchange changes would be construed as "manipulation&quo... All of Congress may not understand this - but the Committees that ultimately control agriculture, banking and finance absolutely understand this.
The testimony by the CFTC, and industry led to OTC trading as being the the big Boogy Monster! In fact the CFTC does not have any CLUE what is going on in OTC and could not give Congress a full and balanced report. CFTC also looks even worse since the commodity driven OTC market dwarfs the exchanges.
Congress understands further regulation of the exchanges will simply drive commodity transactions off the exchanges!
REGARDING OTC markets: Investment banks are trying to stall Congress by presenting a report called: "Containing Systemic Risk: The road to reform" www.crmpolicygroup.org...... .
The report points out the gravity of the OTC problems and promises to have them fixed in 2 years.
If CME/NMX deal happens the combined company will be able to take all the future OTC business and clear it immediately, providing a solution for the CFTC via transparency that will enable CFTC to report to Congress any day of the week what is going on.
CONGRESS HAS PROMISED a much larger CFTC budget! If CME/NMX happens, the increased CFTC resources will be used to rapidly transition OTC markets to the exchanges before investment banks create another taxpayer nightmare.
Speculators Bigger Players in Futures, Options Markets Than Thought
It is true - "the market is the market". However, a commodity is finite and money/currency is elastic, therefore money can "chase" an asset like a BULL in a china shop.
Without market transparency, i.e. Exchange cleared commodity trading, we simply "don't know what we don't know".
Speculation and free markets are what makes the world go round, both fear and greed. Manipulation is, however, is extremely destructive.
WHO IS BEHIND THE CURTAIN?
Speculators Bigger Players in Futures, Options Markets Than Thought
Financial Markets Have Leapfrogged CFTC.
Speculators Bigger Players in Futures, Options Markets Than Thought
The non-transparent OTC commodity "market" dwarfs the exchanges, thus CFTC data in any way shape or form is misleading. Randomly querying the street for commodity information accomplishes nothing. Either commodity OTC markets become globally regulated under the CFTC and FSA, for example, and be required to "clear" through an exchange or the world risks another debacle rivaling subprime mortgages.
Financial Markets Have Leapfrogged CFTC.
Coming Soon: A Central Clearing House for Credit Derivatives
U.S. Commodity Futures Trading Commission to Hold International Market Surveillance Conference, August 5-7, 2008
CFTC to Host International Regulators at Conference
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) will host its first ever market surveillance conference for international regulators August 5-7, 2008 in Washington, DC.
Senior regulatory officials from nine jurisdictions, including leading emerging market jurisdictions such as India and China, will discuss key elements of futures trading oversight, including market and financial surveillance. In addition to highlighting the CFTC’s large trader reporting system, the CFTC will share new surveillance techniques and information about how to design futures contracts that are not susceptible to manipulation.
“This is a critical time for futures regulators around the world,” said CFTC Acting Chairman Walt Lukken. “During this time of volatile and global futures markets it is ever so important that regulators share surveillance approaches, enhance cooperation and coordinate market oversight.”
“This three-day program is designed to share best practices for market monitoring and strengthens partnerships with our overseas counterparts,” said CFTC’s Director of International Affairs Jacqueline Mesa. “Regulators around the world share the same goals to ensure market integrity and customer protections. Building on these shared goals, the CFTC will explain necessary tools and techniques to stop abuses and address them in real-time.”
This conference is for international futures regulators only and is not open to the public.
Coming Soon: A Central Clearing House for Credit Derivatives
Coming Soon: A Central Clearing House for Credit Derivatives
LETTING THE * INVESTMENT BANKS* SET UP AN OTC MARKET THAT IS UNPROVEN (FOR INVESTMENT BANKS) AND EXTREMELY IMPORTANT IS LIKE LETTING A FOX GUARD THE HEN HOUSE.
- The investment banks have proven incapable of policing themselves - Thus any major ownership of an exchange OTC etc would not create a true bona-fide transaction as exhibited by the recent Auction Rate Securities alleged Fraud and BSC's lack of "arms length transactions" between BSAM and BSC - a real sham IMHO (online.wsj.com/public/...) THE LIST GOES ON AND ON.
Coming Soon: A Central Clearing House for Credit Derivatives
The recent testimony of many industry participants on the "Hill" = coupled with the FED's mandate that all OTC transactions be totally transparent = Leaves only ONE viable solution. It's self evident that the CME is the only organization with the size and talent to transform an antiquated OTC market into a reliable and quantifiable marketplace:
To sum it up:
CME plays Transparency
Investment Banks play Hide and Seek
CME has clearing for OTC with pricing and daily position netting ready to "Plug and Play"
Investment Banks are unable to balance the books
CME has a strong capital position
Investment Banks are passing around the hat
CME has proven management that lives and breathes the business
Investment Banks have a revolving door, hired hand policy
CME, one of few financials that can and thus is being shorted - Wonder Who?
Investment Banks apply Voodoo Naked Monkey Motion to keep shares up
THE SELLING PRESSURE ON EXCHANGE STOCKS IS AN UNWARRANTED SINISTER ATTEMPT TO MAINTAIN A DESTRUCTIVE "STATUS QUO".
LETTING THE EXCHANGES SET UP AN OTC MARKET THAT IS UNPROVEN AND EXTREMELY IMPORTANT IS LIKE LETTING A FOX GUARD THE HEN HOUSE.
A Most Bearish View on Bear Stearns in a Bear Market
Barclays BW & Mass are on the right track:
Barclays:
online.wsj.com/public/......
MASS:
www.sec.state.ma.us/sc......
Business Week:
www.businessweek.com/m......
Where is the SEC?