C.F.T.C. votes for 'Position Limits'

[Whiskers]

Anyone else hearing about this?

What are the implications?

Agency Narrowly Votes to Curb Derivatives Trades; Precious Metals Affected

The United States pushed through its toughest measures yet to curtail speculation in commodity markets in a tight vote on Tuesday, likely shifting the focus of a fierce four-year debate from the regulators to the courts.

In a measure decried by Wall Street and trading companies as a misguided political attempt to cap soaring oil and grain prices, the Commodity Futures Trading Commission voted 3-2 to approve "position limits" that will cap the number of futures and swaps contracts that any single speculator can hold.

The rule offers some relief for the industry, relenting on several highly contentious provisions, as expected.

But that will do little to temper frustration over a plan that could force banks like Morgan Stanley and traders including grains giant Cargill to scale back business, and could stanch the flow of financial capital into commodities...

http://www.ibtimes.com/articles/233437/20111018/commodities-markets-futures-trading-commission.htm

 

[tothemax6]

They (US) already banned offering leveraged commodity trading to retail customers, under their Dodd-Frank act (Barney Frank being one of the most vile and disgusting human beings... never mind). Amazing that I was directly financially affected by this all the way out here in Aus.

These people don't even have the slightest idea how anything works, and yet they feel confident enough to throw their weight around and declare how the whole country will conduct business. They should be jailed.
All futures and swap contracts have two counter-parties. A buyer of a futures contract is met with a seller of a futures contract. One could thus just as soon claim position limits would prevent prices falling (and be just as incorrect).