With The CFTC Position Limit Response Period Over, Here Are Select Opinions By PIMCO, World Gold Council And Goldman Sachs

Tyler Durden's picture

The public comment period for the CFTC's proposed position limit rule has come and gone. It should come as no surprise to anyone (and particularly those transfixed by the massive surges in various commodities, among them most certainly gold and silver) that what is at stake here is not some actual position limit definition and subsequent regulation and enforcement (although that most certainly is), but yet another challenge to the klepocratic status quo which naturally prefers the status quo to remain as is, and public interests, which seeing 100% moves in the price of grain, cotton, corn, and other commodities, would obviously prefer to reign in speculative fervor. At the end of the day, Wall Street will find loopholes in whatever the end rule is as it always does, but the polemic on the way there is quite interesting. Which is why having combed through some of the last minute public comment submissions (of which there were 5,561 in total at last check), we present some of the most indicative ones: one the one hand that of Carl "Shitty Deal" Levin, Chair of the Permanent Subcommittee on Investigations, who obviously is for the most prompt implementation of position limits as envisioned in Dodd Frank, and on the other hand institutional money managers and traders such as PIMCO, Morgan Stanley, the World Gold Council, and, naturally, Goldman Sachs (oddly, we have yet to track down the response by one JP Morgan). We present these for our readers' perusal below.

But before that, here is a brief summary of where we stand in this process, via of Reuters:

A global push to temper wild swings in oil and other commodity prices reached a pivotal point on Monday as big traders mounted their last attack on a U.S. plan to limit the role of speculators.

Many of the world's biggest commodity market participants such as U.S. agribusiness giant Cargill Inc and Delta Air Lines are resisting new rules that would cap how many futures and related swaps contracts any one company can control.

The plan to impose "position limits", which has been under debate since prices first surged to records in 2007 and 2008, is now reaching its culmination, with companies rushing to submit their views to the U.S. Commodity Futures Trading Commission by Monday's deadline.

Most are reframing familiar complaints: Banks, traders and exchanges say the rules would make it harder to hedge risk, and that it would reduce liquidity and increase consumer costs.

If the proposed rules are adopted with no change, "there is a substantial risk that they would undermine the efficiency of the markets for hedgers, by reducing liquidity and disrupting markets which currently function well", Linda Cutler, a Cargill vice president, said in a letter to the agency.

Ah yes, the same "we provide liquidity" straw man excuse that the HFT scalp brigade uses every time someone threatens to take away their market frontrunning power.


But at a time when oil, grain and metal prices have again shot up, some reaching new heights, consumers too are looking for some regulatory relief. Politicians are stepping up pressure for action.

"The banks think this rule is too strong. Commercial end users, consumers, unions ... think it's far too weak," Michael Greenberger, a University of Maryland law professor and former senior CFTC staffer, told Reuters Insider.

"As the American public starts suffering from $4 a gallon gasoline ... the issue becomes more visible, the debate between the consumer and the big banks is more highlighted," he said.

Wall Street firms, including Morgan Stanley and Barclays Capital, want the CFTC to hold back on position limits until the agency can gather more data to assess the size of the swaps market.

"Only after it receives and reviews relevant market data should the Commission consider whether position limits are necessary and, if so, set appropriate and commercially practicable limits that preserver market liquidity and promote efficient price discovery," said Simon Greenshields, global co-head of Morgan Stanley's <MS.N> commodities business.

Roger Jones, a managing director at Barclays, warned the CFTC proposal was too vague and "oversimplifies the legitimate complexity of risk management."

And so forth. It is pretty clear where this is headed - another institution vs end-consumer debate. And with the CFTC head having worked long years at Goldman Sachs is there any doubt how it will be resolved.

For those interested here is a comparison of the the old and the new proposed plan are comparable and divergent:

That's all in theory.

In practice, here is how it is going to go down. All proposals such as the one immediately below from Carl Levin will be ignored, while those of the likes of PIMCO, Morgan Stanley, the WGC and of course Goldman Sachs, will be very much considered and probably implemented, resulting in a much watered down position limit rule, which will likely imitate the status quo almost verbatim.

Carl Levin response:

Levin CFTC

PIMCO response:


World Gold Council response:


Morgan Stanley response:

Morgan Stanley CFTC

Goldman Sachs response:

Goldman CFTC

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unwashedmass's picture


Like we -- the peasantry -- had a chance in this game. Hell, unless we ante up a few million for Gennselear, it ain't happening.....and even a few tax free million probably isn't enough.

The point is, and let's never forget this, to preserve the metals markets exactly as they are --- controlled entirely by JPM in order for the JPM elite to harvest multi-generational wealth from the peasantry in a bloodless way with no reprecussions or penalties whatsoever.

Now some people might call this theft. It is not. Not when the Gods do it......and let's not forget, the little people are obligated to turn their money over to the Gods....having a pretend market just makes the fame a little more fun for JPM.


zaknick's picture

That is right on the money (pun intended). Un-fucking-believable what these scumbags have hatched on humanity. It is no less than modern day feudalism (with its required oligarchy) and scientific dictatorship.

And all of them bow down to the lurking joooo with the $100 trillion fortune.

DavidPierre's picture


Civilization is breaking down.

A sampling of headlines over the weekend included "Anarchy in the UK as 500,000 protest, ...Libya op to last months not weeks, ...EU readies $60 Billion bailout for Irish banks, ...Unrest in Syria and Jordan, ...Conservatives routed in Germany, ...Radiation readings 100,000X normal in Japan just to name a few. After checking the various markets this morning, stocks are called higher, the Dollar is higher and Gold is lower, all par for the course in these "normal" times!

Of course Gold has an option expiration today which is why "paper bombs" are being lobbed at that market to steal a few $ Million from speculator's pockets but not to worry, this is only the 500th time we've seen this over the last 10 years yet Gold traded at all time highs late last week.

While watching CNBC this morning, Rick Santelli went into a rant with Steve (which way did he go George?) Liesman.

Liesman and the other guest were pointing out how stocks levitated last week and Treasuries and the Dollar "caught a bid" (NOT) last week so all must be well right? Santelli pointed out that Central bankers were considering raising rates (not the US) and Irish, Greek, Portuguese bonds etc. have all been shunned in favor of U.S. Treasuries because they are the "last island" sovereign still standing.

What he was getting at is that ALL sovereign debt is crap!

U.S. Treasury debt is the last one still standing untarnished and as he put it (in my words) "it is all dirty, smelly crap, it just happens that US debt is the best of the bad crap".

He hasn't gotten there yet but Rick Santelli will make the "leap" very soon and become a snorting Gold bull as he understands that when it comes to "paper", there is now no place to hide! ... "join the party Rick" and kudos for actually using your brain and displaying some honesty, hopefully you don't get canned for speaking the obvious!

 The unrest in Britain is interesting because Brits are usually "polite", violence has now broken out in several quarters.... "interesting" because in the past Britain has been 2-4 weeks ahead of the U.S. since the GFC began. We have had some protests in various U.S. States but nothing even close to 500,000.

NOTHING is normal and the "Powers that be" are losing control EVERYWHERE!

Unrest is spreading throughout the globe and has now even reached the "civilized"... it is just that the Brits are known for their "civilized" nature and this now seems to be breaking down.

Any further unrest in the U.S. will confirm in that "control" and the status quo is lost. No matter what happens (or what "they" do) to Gold, please do not panic or fret.

 Gold is your ONLY insurance policy and will be the PREMIER asset class to carry wealth from the currently collapsing monetary and societal system to the next!

Hold it close and tight because it is about to become very dear indeed!


zaknick's picture

They are NOT losing power everywhere. They are counter-attacking hard through NED and USAID color revolutions lots of places and Cass Sunstein's cognitive infiltration program -aka Wikileaks- is in full swing. The carriers are off Iran and Pakistans shores as well as Chinas.

The 666 banksters will not go down without a fight, probably as in WWIII instead of deflation and loss of political control in the US.

JLee2027's picture

Banksters fight with paper, they have no army. It has been this way throughout history. They are cowards at heart. 

It is unclear what exactly will happen. But they, the banksters, will be dead once the real financial tsunami hits.

Hook Line and Sphincter's picture

The same banksters also own many of the largest corps and multinationals. Our MIC US does their bidding. IF you think that the cream of the crust oligarchy doesn't understand the cyclical reality of fiat, then you can go ahead and believe that they aren't buying phys gold as fast as they can (and likely already have plenty). 

doggings's picture

The unrest in Britain is interesting because Brits are usually "polite", violence has now broken out in several quarters....

lol, you've obviously never seen or heard of Millwall, amongst others.

and read up on the poll tax riots, the miners and press disputes that kicked off a year into the last austerity plan under Thatcher.

Polite my arse, the poll tax riots were great, never had we gotten away with such hitting of the Police force quite so much before or since, the only mistake was to not have another one the next week, because Thatcher later admitted in her memoirs that had we done so, in all liklihood they would have dropped the law. 


Cap Matifou's picture

Humanity has a long history to sack self appointed gods. This rebellious nature is the "inherited sin" the organised religions refer to. Banksters and priests will hang once it becomes known, to whom they sold their fellow humans as slaves.


"Custodians continue to spread the same
apocalyptic messages today that they have
been implanting for thousands of years."

Weisbrot's picture

so even if the bears have it right and the comex is empty, what difference does it make? perhaps all the silver sheep are being hearded in for a shearing.

bob_dabolina's picture

I'm ready to provide some liquidity directly into the mouths of my governing officials.


CU1981's picture

I told em, they didn't have a chance... and got junked mightly for it .. he he


They are on the same team, assholes.


Your monthly fyi

JW n FL's picture

Fantastic! Goldmans God's Work of shorting will continue! Praise Jesus!

cosmictrainwreck's picture

I have a funny feeling L-l-l-loyd doesn't believe in Jesus...... (and he might even think he himself is God...hence he wasn't totally lying)

JonTurk's picture

welcome to the matrix

LostWages's picture

Maybe the banksters should go back to banking and not try to be hedge funds trading depositors as their own money.

Jump you fuckers!

Bay of Pigs's picture

You would expect that from Pimpco and the Banksters.

Obviously, the WGC has zero credibility on anything concerning gold these days.

And Congress? What a bunch of gutless pussies and asshats.

As the Turd says, WAFJ (what a fucking joke).


silvertrain's picture

This physical bullion snowball is picking up some downhill momentum..


And then comes not enough silver to make Ipads..


Al Gorerhythm's picture

Mathman can deliver it @ $5 an oz. That's the cost of picking it up and stacking it neatly in convenient 1000oz, .9999 LGD bars on his front lawn. It's raining rounds in his back yard, delivered through his sprinkler system. SLV has so much of it, they're giving it away. Both my big toes are missing toe nails just from kicking those bastards. Litter bugs!

Now there's a point, when do paper bugs get so cynical with their holdings that they become litter bugs?

Long-John-Silver's picture

Cheap Silver until we own it all bitchez! Load it up while you can.

Judge Judy Scheinlok's picture

How do you solve the problem of too much money speculating on too few commodities?

Print more money, of course.

honestann's picture

Yeah, right.  Because all the money goes directly to JPM, who can then expand their manipulation even more egregiously.

My proposal.  Henceforth all commodity futures must be settled in the real, physical underlying commodity.  PERIOD.

Stoploss's picture

Im sure the world gold council's letter was burned in effegy.

SilverBoy's picture

No sleep will be lost over the watered down version. I'm just going to BTFD


MrPook's picture

I wonder if the position limits matter any more.

Regardless of the raids the price keeps going up.

If people keep buying the price will keep going up and if the price

keeps going up people will keep buying.

The question is: at what point does a rigged market fail?


False Capital's picture

I suspect it wont matter too much. Why not just have 100 shell companies do your bidding. Anyway, JPM will probably just split itself into a "bad bank" and a "good bank" if the massive short position rumours are true.



hambone's picture

All I can say is I'll laugh, do a jig, and cheer when I hear of these folks (JPM, GS, BB, Geithner, etc.) getting what they have truly "earned".  And I'm a "liberal"...voted for big O (junk away, hell I do it to myself daily).  Hate to see what the "conservatives" average Americans' getting robbed daily would say or do.  But I think we're going to find out...and I can't wait.

Wall Street theft, government corruption, and American unfunded liabilities all need to be addressed at once...Mish simply attacking unions as the fix to our problems won't get it done.  Attacking those who steal billions while letting those who steal trillions keep the loot is soooo inadequate.  It's all gotta be fixed at once and only when not a fucking American is happy will we know we've got it right!!!

Time for watering and refreshing of democracy.

honestann's picture

You don't deserve to be junked for being a liberal per-se.

You deserve to be junked for supporting any form of "predators DBA government".

Oh, and wake up!  Democracy is a form of slavery.  Period.

hambone's picture

Yo Stann,

agreed, there will be no "Democratic" change to this situation at the polls.  That is a joke.  What I'm talking about is regaining the republic form of governance we once knew "of the people, by the people, for the people"...likley in much more local or state based governance instead of this ludicrous national bullshit.

Now how and when we get from here to there (and avoid another prick like Obama)? now that's the 64 million dollar question.

Cdad's picture


What a dumb ass, semi-literate thing to say.  I've said it before and I'll say it again...please spare us your stupid commentary.

Abitdodgie's picture

Yes but we live in a Republic, or did i not get the update

Al Gorerhythm's picture

Completely missed it. Read the post again, 20 times, until you are shaking with rage.

evolutionx's picture

A deluge of an unprecedented magnitude is both inevitable and imminent. The consequences of the economic and political mismanagement will have a devastating impact on the world for a very long time. And the consequences will touch most corners of the world in so many different areas; economic, financial, social, political and geopolitical.


Yes, it is amazing the castles in the air that can be built with paper money and deceitful manipulation of all economic data.  And Madame Bernanke de Pompadour will do anything to keep King Louis XV Obama happy, including flooding markets with unlimited amounts of printed money. They both know that, in their holy alliance, they are committing a cardinal sin. But clinging to power is more important than the good of the country.  An economic and social disaster is imminent for the US and a major part of the world and Bernanke de Pompadour and Louis XV Obama are praying that it won’t happen during their reign: “Après nous le déluge”.




honestann's picture

I'm not saying this will ever happen (I don't think it will).

But if we ever see the mainstream media start to treat RonPaul seriously and fairly in the run-up to the next election... you can be 100% certain the predators-that-be know the ship will sink within months.

The predators-that-be would love to pin the biggest economic disaster in history on Austrian economics, individualism and liberty.

Al Gorerhythm's picture

In the absence of a numeraire that; values assets, which thereby, tempers over-exuberance or malinvestments, that settles debt, that preserves the value of money earned, then the crack-up-boom that Mises predicted is unavoidable. As long as bond holders hold out for par value returns, QE to the power of 20 will eventuate. 

Long bunkers.

outamyeffinway's picture

Nothing changes the "natural" laws of economics. Any chicanery will be temporary.

BigJim's picture

Unfortunately, the chicanery can continue longer than I can remain solvent, to paraphrase a 'great' man.

honestann's picture

Here is my proposal.

Henceforth all commodity futures must be settled in the real, physical underlying commodity.  PERIOD.

Otherwise they are not COMMODITY futures.

acrabbe's picture

It's shit like this that makes me want to sell all my options, clean out my brokerage account and go 100% silver bullion, as opposed to the ~25% I'm at now. These fuckers make me sick. These CFTC sponsored pow-wow have always been and will always be a sideshow. Just like the manipulation investigations they had, and their symposiums and open comment speaking engagements. Just allowing the steam that was drifting off the investing publics' head and accumulating under the lid to blow off somewhat and relieve pressure. Problem with this farcical display is that the cat is out of the bag. With JP Morgan receiving express approval on their sham vault and now these position "non-limits" about to be rammed up our asses I see no alternative other than to begin completely extricating myself from the system. Completely. No more recreational or fanciful purchases of goods and services. Just bullion and shit off that "100 things to disappear first" list.


These fucking scallywags are the crooks who used to whisper lies into the captain's ear on the boat and spread false rumors, all the while hiding behind the protection of the king's seal. I want off this dirty ship.

honestann's picture

I reached 100% gold and silver bullion almost a year ago.  And I've kept myself between 98% and 100% ever since (I do wait to buy on dips).

I have ZERO regrets, to put it mildly.

essence's picture

So why delve in paper?

Undoubtably the answer is to gain leverage to magnify gains.
Otherwise known as greed.

By playing in the 'system', thereby hoping to gain from it... you are doing harm to those working to overturn this injustice.

oh please .. save my pension, my bennies, my job, my social security, my medicare, my military pension, my tax exemptions, my government contracts, my government subsidies  ... etc, etc etc.Do whatever it takes, screw whoever you will mr government... just save my precious little bit of swag.


You are part & parcel of the system ... untill you step away and shun it.





Al Gorerhythm's picture

Imagine that they had the process available to replicate exactly the Mona Lisa. Can you imagine the inversely proportional value of each "original" as the supply grew. Go on, estimate the value of the Mona Lisa and then add another. What is the value of each now? Add another. Did your maths come up with one third the original value for each of them.

Now add a trillion. Your accumulation of paper currencies has to be accounted against supply. The more we create through loans, derivative contracts , printing, government debt, fractional reserve banking etc, all add to the amount of dollars in circulation and those in the form of credit advances (yet to be printed). Extrapolate that out to your accounts and where does it end?

Damned rabbit holes.


malusDiaz's picture

The Consumer is Dead! Long Live the Citizen! 

Dr. Porkchop's picture

Buy physical and take it off the market.

RockyRacoon's picture

That's not stopping them.  They just build their own "vault" and "buy" the "physical" for their own accounts and have the "physical" delivered to their own "vault".  No problem.  Same sort of phantom metal that they are trading.  You wouldn't audit someone doing God's work, would you?

Cdad's picture

Wall Street firms, including Morgan Stanley and Barclays Capital, want the CFTC to hold back on position limits until the agency can gather more data to assess the size of the swaps market.

Translation:  Wall Street firms need more time to front run any changes so that they can position in a way to suck the life out of any new rules regarding commodity trading that may emerge from attempted financial reform.

chump666's picture

That's how it works...always has.

What you wait for is when one of those firms does the risk trade from hell (and it goes south) or some rogue trader screws their margins.  Till then...

Cdad's picture

No...it hasn't ALWAYS worked that way.  At times, like now, it works that way.  But not always.

As for waiting for when...are you f'n kidding me?  Do you think you are going to receive a secretive board room tape recording and know when to strike?  

Normally, you measure things per valuation, and then bet against them.  In this environment, you chart it...and when it is parabolic, you bet against it.  You don't sit around waiting for some secret transmission...good grief.

So I see part of your role is the establishment of entirely unattainable circumstances.  Nice work if you can get it for more than one sticky rice ball per day...you fuck.


chump666's picture

Nikkei on risk aversion...nuclear thing is up again.  High plutonium levels found in soil re: meltdown

Zero hedge on Kyodo wires