Oil Speculation Change
10-06-2012, 10:12 AM
#1
Gets Weekends Off
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Joined APC: Jan 2008
Position: 319/320/321...whatever it takes.
Posts: 492
Oil Speculation Change
This came from the latest ALPA fastread.
Recently, the U.S. District Court for the District of Columbia vacated the positions limit rule issued by the Commodity Futures Trading Commission (CFTC). CFTC was charged with developing the rule when the Wall Street Reform and Consumer Protection Act became law in 2010.
The positions limit rule would limit the number of derivatives contracts traders could hold in the commodities market, including oil, for the first time. ALPA and the aviation industry have long been supportive of ridding the commodities markets of rampant speculation in the oil market. This speculation continues to create inflated fuel prices for our companies and consumers at the pump as well as unwanted volatility in the oil market.
This “speculation premium” paid to Wall Street traders should be used to invest in our companies and employees. ALPA supported the Wall Street Reform and Consumer Protection Act and continues to support S. 1598—The Anti-Excessive Speculation Act introduced by Sen. Bill Nelson (D-Fla.).
Forgive my naiveté in these matters, but am I reading this wrong? I thought 'vacate' meant get rid of. Why is the government getting rid of the limits that traders can buy in the oil spec market? won't that exacerbate the problem? Help me understand.
Recently, the U.S. District Court for the District of Columbia vacated the positions limit rule issued by the Commodity Futures Trading Commission (CFTC). CFTC was charged with developing the rule when the Wall Street Reform and Consumer Protection Act became law in 2010.
The positions limit rule would limit the number of derivatives contracts traders could hold in the commodities market, including oil, for the first time. ALPA and the aviation industry have long been supportive of ridding the commodities markets of rampant speculation in the oil market. This speculation continues to create inflated fuel prices for our companies and consumers at the pump as well as unwanted volatility in the oil market.
This “speculation premium” paid to Wall Street traders should be used to invest in our companies and employees. ALPA supported the Wall Street Reform and Consumer Protection Act and continues to support S. 1598—The Anti-Excessive Speculation Act introduced by Sen. Bill Nelson (D-Fla.).
Forgive my naiveté in these matters, but am I reading this wrong? I thought 'vacate' meant get rid of. Why is the government getting rid of the limits that traders can buy in the oil spec market? won't that exacerbate the problem? Help me understand.
10-06-2012, 01:55 PM
#2
Gets Weekends Off
Joined APC: Feb 2006
Position: 767A (Ret)
Posts: 6,248
It was a decision about procedure. The Court ruled that the CFTC had not made a required "finding" before imposing the limit, and sent it back to them. Whether or not the limit is a good idea was not for the Court to determine.
"Court Vacates CFTC Position Limit Rules" |
Skadden, Arps, Slate, Meagher & Flom LLP - JDSupra
In its opinion, the court found that the CEA language that was left unamended by Dodd-Frank — referring to the CFTC promulgating limits “as the [CFTC] finds are necessary” — did require the CFTC to make a necessity finding before imposing position limits. However, the court said that Congress did not make clear whether the Dodd-Frank amendments adding other language in the CEA required the CFTC to impose position limits without making such a finding. Because the CFTC had based its position limit rulemaking on the erroneous conclusion that Dodd-Frank clearly and unambiguously mandated the imposition of position limits no matter what, the court determined that the CFTC’s position limit rules must be vacated and remanded to the agency. Finding this basis for vacatur and remand, the court did not address Plaintiffs’ other claims that the position limits rulemaking and specific features of the rules violated the CEA and the Administrative Procedure Act.
Skadden, Arps, Slate, Meagher & Flom LLP - JDSupra
10-19-2012, 05:38 AM
#4
With The Resistance
Joined APC: Jan 2006
Position: Burning the Agitprop of the Apparat
Posts: 6,191
Originally Posted by mmaviator
this artist could have made another painting pertaining to oil. Some satire for market speculation.
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