
Last week President Obama gave the nation a briefing from the White House on the perils of speculation and the potential for abuse in oil futures trading contributing to the distortion of oil prices and in turn the high price for gasoline we are paying at the pump. Though short on specifics the president did call for increasing penalties, both civil and criminal, for market manipulation and significantly increasing the budget of the oversight agencies such as the Commodity Futures Trading Commission (CFTC) so as to “crack down on illegal activity and hold accountable those who manipulate the market for private gain at the expense of millions of working families.”
Promptly of course, as if on cue, from their headquarters in Chicago’s Loop, the prodigious exchange operator, the CME Group, the largest in the country comprising the Chicago Mercantile Exchange (CME), the Chicago Board of Trade (CBOT) the New York Mercantile Exchange (NYMerc-where oil futures contracts are traded), and the Commodity Exchange, Inc. (Comex), called the president’s plan “misplaced.”
Wall Street, in the mantle of a Citigroup head of commodities research, would immediately opine, according to CNBC’s dutifully entitled “Obama’s Plan Could Increase Price Swings” (4.20.12), quotes, “The attack on speculation is an attack on better functioning markets. If there were not liquidity in the futures market