Posts by Brennan

CalPERS fails to make money in commodities

August 1, 2012 by Leave a Comment

(Reuters) – Nearly five years after it began investing in commodities, the biggest public pension fund in the United States has yet to make any money in the asset class — highlighting the difficulty even the largest and most sophisticated institutions encounter in wringing returns from investments in agriculture, metals and energy derivatives.

The California Public Employees’ Retirement System (CalPERS) had assets valued at $236 billion at the end of March 2012, including $3.6 billion [Read More...]

Filed Under: Responsible Investing, Wall Street Tagged With: , , , ,

Levin to SEC: Proposed ETFs backed by physical copper should not be allowed

July 19, 2012 by Leave a Comment

Responding to NYSE Arca’s request to list new physically-backed copper ETF created by JPMorgan, Carl Levin (D-MI) urged the SEC to deny the request, arguing the new ETF “would allow speculators to create a squeeze on the market,” and “…undoubtedly affect and increase the price of copper.”

Similar products in precious metals have been successful in recent years, according to the Financial Times. Unlike gold, silver and palladium, though, copper is essential to manufacturing because [Read More...]

Filed Under: Congress, National, Wall Street Tagged With: , , , , ,

Could oil prices be rigged too?

July 16, 2012 by Leave a Comment

In the wake of the Barclays’ Libor scandal–with internal memos now hinting that the scandal will envelop other banks–some politicians and fuel campaigners are urging regulators to expand its investigations to determine whether oil prices have also been pushed up.

Concerns around the reliability of oil prices–reinvigorated by the huge spike in gas prices earlier this year–continue to grow after a recent G20 report “found the market is wide open to ‘manipulation and distortion.’” Oil [Read More...]

Filed Under: Congress, International, National, Wall Street Tagged With: , , , ,

Contention over CFTC’s Proposed Interpretive Guidance on Cross-Border Application

July 9, 2012 by Leave a Comment

On June 29, the CFTC released its proposed interpretive guidance on cross-border implementation-of financial reforms – essentially, how exactly, if at all, will new CFTC regulations flowing from Dodd-Frank be applied to foreign subsidiaries of U.S. banks and others trading on U.S. markets from another country. Organizations working for strong financial reforms were encouraged to see the CFTC, in the face of objections from Wall Street and abroad, adopt strong interpretive guidelines that would affect [Read More...]

Filed Under: CFTC, Congress, International, National, Wall Street Tagged With: , , , , ,

Who is writing comments for CFTC’s O’Malia?

July 6, 2012 by Leave a Comment

Is someone ghost-writing Scott O’Malia’s comments on CFTC rules and guidelines? According to John Kemp of Reuters, who recently wrote a very intriguing piece exploring the transformation of O’Malia’s comments into eight thousand word legal briefs, it’s likely.

During O’Malia’s first two years, his statements were–on average, around 1,240 words, with two footnotes–similar to his colleagues. But since October 2011 the average has jumped to 3,020, with 17 footnotes–including two statements of over 8,000 [Read More...]

Filed Under: CFTC, National, Wall Street Tagged With: , , ,

CFTC begins work on high-frequency trading definition

June 21, 2012 by Leave a Comment

The Commodity Futures Trading Commission (CFTC) will take a broad approach to defining high-frequency trading, according to a “working definition” released by a CFTC subcommittee on Wednesday.

High-frequency trading currently makes up roughly half of US equity volume and futures markets. Proponents argue that it adds critical liquidity to these markets, but the dangers of this practice are becoming increasingly clear, particularly after the May 2010 “flash crash” temporarily wiped-out $1 trillion in paper [Read More...]

Filed Under: CFTC, National, Wall Street Tagged With: , , ,

House Republicans and Wall Street team up to slash budgets of financial regulators

June 14, 2012 by Leave a Comment

Clearly Republican lawmakers have forgotten the fact that unregulated derivative markets would have brought down the entire U.S financial system, save for the massive amounts of (tax-payer backed) government bailouts and free money the Federal Reserved dumped into the laps of Wall Street.

What else could explain the recent spending bill released by house Republicans, which amounts to a budget-slashing party aimed at emasculating the regulatory agencies charged with implementing the Dodd-Frank financial reform [Read More...]

Filed Under: CFTC, Congress, National, Wall Street Tagged With: , , , , ,

Myths and facts about commodity speculation

June 1, 2012 by Leave a Comment

The Commodity Markets Oversight Coalition (CMOC), an alliance of commodity derivatives end-users and consumers, has compiled an excellent list of commonly held myths about speculation in commodity markets and facts that dispel them.

For example, here’s one of my favorites:

MYTH: Restraining financial speculation is against American principles and free market ideals.

FACT: Even America’s Founding Fathers worried about financial speculation and feared its excesses. In a letter to President George Washington on May 23, [Read More...]

Filed Under: Congress, National, Wall Street Tagged With: , , , ,

Oxfam Germany releases new report on German banks speculating on food commodities

May 25, 2012 by 2 Comments

“Taken together, German financial institutions are responsible for one sixth of the total global investment volume in agricultural commodities, which is estimated by the Barclays Bank to lie at 99 billion US$ (68.8
billion EUR)”

From the English summary:

Banks and financial advisors in Germany have
been promoting agricultural crops as an
attractive investment category for the past few
years: rising food prices promise high returns
that no one should [Read More...]

Filed Under: International, Wall Street Tagged With: , , , , , ,

BNP Paribas challenged over food speculation

May 25, 2012 by Leave a Comment

On Wednesday Friends of the Earth Europe and Friends of the Earth France challenged BNP Paribas (BNPP)–a major player in global agricultural and energy markets, offering many funds and commodity-related investment instruments–over its role in food speculation and global hunger.

FOE challenged BNNP at its annual shareholder meeting in Paris. They told BNNP that given the severity of food crises around the world and the growing body of evidence that links excessive financial speculation to [Read More...]

Filed Under: International, Wall Street Tagged With: , , , , ,
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