Better Markets President and CEO Dennis Kelleher discusses the lawsuit against
the Department of Justice during a press conference at the National Press Club.
The CFTC’s proposed rule to prevent excessive speculation in the commodity markets is inadequate.
Wall Street traders speculating in the commodity derivatives markets cause massive swings in oil and food prices and force families, homeowners and businesses to pay more than they should for those and other essential goods. Congress passed a law requiring the commodity cops, the CFTC, to enact a new rule to limit such speculation (called a “position limits” rule). Unfortunately, as we detailed in a comment letter we filed, the CFTC’s proposed position limits rule simply will not work: it sets the limits too high
and too narrow to prevent excessive speculation in markets in any meaningful way. Position limits are one of the most important tools the CFTC has to protect the markets as well as consumers and businesses. It must make the rule much stronger and protect American households and businesses.
High-frequency trading (HFT) is “Wall Street at its most useless.” That is how a recent Atlantic story describes the practice
of high-frequency computer traders profiting from split-second advantages. Most of this is perfectly legal and perfectly rotten since HFT traders use computer algorithms to rig the game in their favor, buying sneak peeks at information, and pouncing before the average trader has any idea of what’s going on. The CFTC recently held a committee meeting to examine the issue
of market disruptions caused by high-frequency traders. It is long past time for the Commission to do something because HFT is yet another example of Wall Street run amok that is hurting every one that buys a gallon of milk, a box of cereal or fills up the gas tank.
The Fed meets on critical rule to prevent future U.S. taxpayer bailouts of global megabanks.
Next Tuesday, the Federal Reserve will vote on new rules
to require the biggest U.S. banks and the U.S. operations of foreign banks to maintain enough capital to prevent a repeat of the 2008 crash. This is absolutely critical, because not only did U.S. taxpayers bail out Wall Street, they also bailed out the global banking system and lots of foreign banks: 10 of AIG’s top 16 counterparties were foreign banks, as were 9 of the 20 largest users of the Fed’s emergency lending facilities. Without the Fed’s proposed rule being finalized next week as proposed or even stronger, taxpayers will once again end up bailing out the banking system, including foreign banks
Some recent Better Markets media coverage:
Some other things that might interest you: