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CME Hikes Crude Maintenance And Initial Margins Again

Tyler Durden's picture




 

Now that it is proven that even Goldman commodity downgrades have a half life of 2 days, here come the exchanges. In a move that would surprise exactly nobody, the CME announce at close of trading that it is hiking the initial and maintenance margins for Crude, WTI and Brent Tiers 1-6 anywhere from 6% to 15%. Curiously, the CME is concurrently lowering margins on a variety of natgas, gasoil and crack futures contracts. Still, the move begs the question: why did the CME not hike margins when WTI and Brent were trading about 4% higher is unclear. What is clear is that the ongoing attempt to kill the "speculators" who are solely responsible for the surge in crude prices (and not the Fed, never the Fed) will continue. As we have been saying, prepare for more deflationary downgrades of all asset classes by Goldman, especially if this latest margin hike has the same effect it has had over the past several months: none.

CME Margin Hike 4.14

 

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Thu, 04/14/2011 - 17:21 | 1170401 SilverIsKing
SilverIsKing's picture

Ho hum...

Thu, 04/14/2011 - 17:23 | 1170413 NOTW777
NOTW777's picture

hilarious. the tide is going out

Thu, 04/14/2011 - 17:53 | 1170511 iinthesky
iinthesky's picture

Crack futures.... Priceless

Thu, 04/14/2011 - 17:27 | 1170415 slewie the pi-rat
slewie the pi-rat's picture

rule change!  nahnee nahnee!  we can do it a & you can't!  (raspberry on blackberry while eating radioactive strawberry).

Thu, 04/14/2011 - 17:26 | 1170419 tek77blu
tek77blu's picture

the one asset group nobody that seems to be off everyone's radar is uranium stocks. most are down 50-80% since the japan crisis! good commentary on it here: http://www.youtube.com/watch?v=f-EkkhJi9VY

Thu, 04/14/2011 - 18:48 | 1170686 chubbar
chubbar's picture

Tek77, we fucking get it. After the 10th frickin OT post on the goddamn uranium stocks in as many unrelated columns, I think we all now realize you are ALL IN on uranium stocks and hoping for some pumping vis-a-vie ginning up ZH interest. Give it a rest for christsakes.

Thu, 04/14/2011 - 18:59 | 1170712 Cdad
Cdad's picture

He is spamming his stuff.  No need to take the Lord's name in vain while cussing up a storm.  Relax.  He does not matter.

 

Thu, 04/14/2011 - 17:26 | 1170430 NOTW777
NOTW777's picture

everything is fine - just sell your gold and silver and oil and food. the government will take care of you - get in line for obamabucks (disclosure - TSA will be manning the line)

Thu, 04/14/2011 - 20:45 | 1170952 cowdiddly
cowdiddly's picture

I can neither confirm nor deny that I have any PMs. Or  Your Honor, not that I can recall. Gee, Sir I could have sworn I buried it right here someplace.

Thu, 04/14/2011 - 17:32 | 1170440 ericsebille
ericsebille's picture

Where is Reggie GOOGLE Middleton

Thu, 04/14/2011 - 17:40 | 1170469 sabra1
sabra1's picture

i think he mentioned something about a conference in norway.

Thu, 04/14/2011 - 17:35 | 1170446 truont
truont's picture

Still, the move begs the question: why did the CME not hike margins when WTI and Brent were trading about 4% higher is unclear.

It is clear.  Kick the specs when they are down!  Force them to sell to lock in their losses!

CFTC's new slogan:  Speculators are a disease, and government is the cure.

Thu, 04/14/2011 - 17:36 | 1170449 TeMpTeK
TeMpTeK's picture

Joseph Battipaglia "The Gentle Giant".. R.I.P

Thu, 04/14/2011 - 17:46 | 1170487 RobotTrader
RobotTrader's picture

Like I said.

Remove all margin period.

That will stop the raids.

There is one group that needs to be permanently removed from the commodity futures pits:  Overleveraged hedge funds, overmargined Peak Oilers, Mad Maxxers, and GATA followers trying to "make a killing", and all of General Jim's followers who are still eyeballing $1,650, Alf's $5,000, Armstrong's $10,000, E.T.'s $50,000, and Buzz Lightyear's $100,000 gold targets.

Remove these wild-eyed gamblers, and price stability will be restored.

LOL....

Thu, 04/14/2011 - 17:49 | 1170504 tmosley
tmosley's picture

Yes, you would like everyone that is making a fool of you "removed", wouldn't you?

Loser.  

Thu, 04/14/2011 - 18:23 | 1170618 bob_dabolina
bob_dabolina's picture

Maybe they can remove money printers and solve all the problems.

Thu, 04/14/2011 - 17:49 | 1170494 CrashisOptimistic
CrashisOptimistic's picture

"Not the Fed, never the Fed"

Come on, surely you read your own oil threads.

It's not the Fed.  The Fed doesn't matter.  NOTHING is as powerful as oil depletion.  Nothing can kill 5 billion people like oil depletion will.

Price?  Not informative.  Maybe it should be 5X higher.  Doesn't matter.  How odd is that?  It Doesn't Matter.

You won't care about futures expiration dates if trucks don't bring food to your grocery stores, and it is THAT which looms in a world of oil depletion.

Oh, wait!  What's that?  Oh, I see.  The government won't ever let that happen, eh.

 

Thu, 04/14/2011 - 17:51 | 1170512 tmosley
tmosley's picture

Funny how you keep crooning about how everything is caused by peak oil, even as the monetary metals blow up above and beyond oil.

Oil keeps getting cheaper in terms of real money.

But hey, don't let me burst your bubble.  You keep on trying to excuse Bernanke for his behavior, as if there was never any other outcome.  Fucking apologist.

Thu, 04/14/2011 - 18:01 | 1170538 CrashisOptimistic
CrashisOptimistic's picture

Fella, the metals didn't have anything to do with KSA announcing it was withdrawing 500K bpd from the market just about exactly 3 weeks . . . 3 WEEKS . . . after saying they were adding it.

If you had a product whose price was $30/barrel more now than a month or two ago, wouldn't you be pumping more to capture that money?  If you could. Oh and btw, for this paragraph, we don't have to be talking about KSA, do we?

 

Thu, 04/14/2011 - 18:05 | 1170551 r101958
r101958's picture

Somebody get tmosley a nodoz tab or two. I guess he has been falling asleep during his finite resources coursework.

Thu, 04/14/2011 - 17:53 | 1170519 blazen
blazen's picture

Goldman should be thanking God it's taken some effect this time because next time we won't be speaking about half life - it will be called countereffect.

Anyways, when Saudi fails (a matter of time), Brent is in 200-300 range and Goldman knows it very well.

Thu, 04/14/2011 - 18:53 | 1170696 r101958
r101958's picture

Agreed. The House of Saud has peaked.

Thu, 04/14/2011 - 17:59 | 1170536 buzzsaw99
buzzsaw99's picture

The CME gets their marching orders from the squid.

Thu, 04/14/2011 - 18:01 | 1170546 r101958
r101958's picture

Smells like desperation to me.

Thu, 04/14/2011 - 18:05 | 1170555 max2205
max2205's picture

Did CME TELL GS OR DID GS TELL CME TO RAISE OR DID BEN TELL GS TO TELL CME OR DID BEN TELL CME TO TELL GS

IT SO TRANSPARENT AND THANK GOD FOR THAT......shout

Thu, 04/14/2011 - 18:13 | 1170584 AldoHux_IV
AldoHux_IV's picture

The margin hikes help the situation like an asshole on Romer's face.

Thu, 04/14/2011 - 18:40 | 1170665 Slin
Slin's picture

++

Thu, 04/14/2011 - 18:55 | 1170705 r101958
r101958's picture

The Fed et al trying to plug the ever increasing number of holes in the dam. They are now running out of extra fingers to use and the water is getting through some of the holes.

Thu, 04/14/2011 - 19:20 | 1170754 Rodent Freikorps
Rodent Freikorps's picture

Almost everywhere I go the comments section is filled with people calling bullshit on this economy.

The proles are catching on.

It is gonna go down. The only question is who gets the blame? Capitalists, or welfare statists?

Thu, 04/14/2011 - 19:19 | 1170757 pitz
pitz's picture

Margin hikes force producers to devote more capital to margin payments, and thus, impair the economics of certain projects.  Driving up the price of oil.  After all, forcing producers to buy US treasuries to place as margin obviously is a huge disincentive to producing, especially if those treasuries are rendered increasingly worthless.

 

 

Thu, 04/14/2011 - 21:38 | 1171030 Dr. Porkchop
Dr. Porkchop's picture

What do they call it? Rearranging deck chairs on the Titanic. I've watched the PM trolls come in and out like the tide with each down move. I started buying silver at about $26 and I haven't lost a cent. How much is physical selling for on eBay? That's the real market.

Thu, 04/14/2011 - 22:29 | 1171153 bruiserND
bruiserND's picture

I was a member of the CBOT for 14 years & worked with / for several Chairmen of both the Exchange and the Clearing Corporation. My area of expertise was Institutional fixed income hedging.

Nobody is out to curb trading or "speculators" or drive off a penny's worth of buisness.  This is about protecting the "house" , the exchange which in turn, protects the American public.

AIG and Citi Bank were "the house" and there was no "exchange" there was no regulator scrutiny and there were no margins on credit default swaps written there.  That's a primary reason why America is bankrupt. Had the Grahm, Leach - Biley "Commodity Modernization Act" not been blocked by Summers ,Rubin & Greenspan ......and CFTC Chair woman Brooksley Born prevailed in her attempt to regulate the OTC derivatives market , just like the CME Group is doing here .........y'all would continue to live in the same country that I knew. Watch the PBS special "The Warning" .

Understand to the core of your beings that an American public and an American financial press who failed to understand the listed futures and options, their strict regulations , transparency,disclosed commission structure , clearing, margin & DAILY mark to the market process was taken down the road to Hell by the ISDA and you'll all now have to pay for the lack of knowledge with your freedom and your personal financial futures. 

As for Tyler & his article above, "delivery" is the primary reason that commodities markets exist "making & "taking" and that's one of the reasons that the exchange & clearing corporations intervene so the physical delivery process is enhanced.

The primary reason that the ISDA /GSA / AIG / Citi etc. took us down is because opaque , unlisted OTC derivatives have a "cash settlement" and the commissions are immense ie. "yeild to commission".

Please reference your own Dr. Michael Burry speech posted earlier in the day.  Dr. Michael Burry one of, if not THE, greatest traders and financial minds of our lifetime. 

http://www.zerohedge.com/article/michael-burry-toxic-twins-fiat-currency-and-activist-fed-set-route-long-term-ruin

 

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