Stop Wall Street from weakening financial reforms
Last year, calls and letters to Congress led to the passage of the Dodd-Frank Act which includes fairly strong financial reforms. But these improvements have not been implemented yet, and they are in danger of being undermined. Unless new rules are put in place, we face the danger of more food and energy price bubbles like we experienced in 2008.
The Commodities Futures Trading Commission (CFTC, the five-person panel, and its staff, in charge of regulating commodity markets) currently is deciding the details of how to activate Congress’ reforms. Lobbyists for Wall Street have held dozens of meetings with regulators, pressuring them to weaken the laws as much as possible.
It is essential that the CFTC hear from regular people about how important this issue is to them. Please take the time to send a comment to the CFTC today, asking them to apply strong rules to limit excessive speculation.
Unfortunately, the CFTC’s new system for comments requires a little more time, which may discourage some from writing. That is why it is so important that you submit a statement today. (Note: The site says the deadline is March 28, but the CFTC has announced numerous times that it will accept comments after that date, so if you are not able to respond by March 28, please submit your remarks anyway.)
To leave a comment with the CFTC, do the following:
1) Go to http://comments.cftc.gov, scroll to the rule with the deadline of 3/28/2011, labeled “Proposed Rule 76 FR 4752 // 17 CFR Parts 1, 150 and 151 Position Limits for Derivatives.”
2) Click on “submit comment” and fill in your name and information
3) Either paste in the sample text below, or even better, create your own text using these two key points:
a. In order to avoid food and energy price bubbles, the proposed speculation limits must be implemented. (Wall Street is telling the CFTC not to establish these limits.)
b. Only give exemptions to businesses that deal in physical commodities (like farmers, gas stations, etc.). Do not give any exemptions to banks, hedge funds or other financial players.
Sample text that can be copied and pasted into comments area:
I applaud the Commission’s efforts to implement the Dodd-Frank Act as thoroughly as possible especially reforms aimed at limiting excessive speculation in food and energy commodities.
While many factors contribute to today’s highly volatile commodity prices, it is clear that excessive speculation is partially responsible, as shown in dozens of studies by members of respected institutions such as Princeton, MIT, Citigroup, Petersen Institute, University of London, Yale, UNCTAD, FAO, and the U.S. Senate.
I urge the Commission to implement the proposed rules regarding aggregate speculative position limits to prevent excessive speculation. At this time of fragile economic recovery, we cannot allow speculators to unduly affect our food and energy prices.
Congress called for exemptions from these limits for bona fide hedgers. I ask that the Commission define that term in the strictest sense possible, limiting exemptions to businesses that deal in physical commodities and use markets to hedge commercial risk in those commodities. Banks, hedge funds, private equity and all passive investors in commodities should not be deemed as bona fide hedgers. Institutions hedging price directional bets such as commodity index swaps, Exchange Traded Funds and Exchange Traded Notes also should not be considered as bona fide hedgers.
Thank you for your consideration.
[Sign your name, city, state]