Regulators attack leveraged commodity ETFs/ETNs!
Looks like the SEC and the CFTC are attacking leveraged commodity ETFs again. The SEC has frozen new ETF/ETN applications and the CFTC is looking to restrict existing funds.
The Street speculates that the gold fund DGP may be put out of business like the oil funds. (Hello, hello: the Government pushing the leveraged gold funds out of business just when printing-press inflation is a worry? Reminds me of Roosevelt confiscating gold in 1933.)
My spin: A political cheap shot. There's no political will to deal with the real speculators on Wall Street, so the funds, which appeal to small investors, will get roughed up. A headline is a headline.
With all their flaws (they don't track date-to-date only day-to-day, contango issues, etc.) the funds are a handy tool for individual investors when used properly. When the great Treasury Bubble blows. I'd like DGP around as my Linus Blanket.
Just my opinion.
Regulators Target Leveraged, Commodity ETFs
"(The CFTC)...is considering increased regulation of all commodities of "finite" supply. Stricter position limits in these commodities could affect the launch, creation process and trading of popular precious-metals funds such as the PowerShares DB Silver ... and the iPath Dow Jones-UBS Platinum Subindex Platinum .... "
From: President of the United States Franklin Delano Roosevelt
To: The United States Congress
Dated: 5 April, 1933
Presidential Executive Order 6102
"I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hoarding gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations..."
Disclosure: No current positions