Commodity Flash Crash Part Two As Senators Demand Immediate Position Limits In Crude

Tyler Durden's picture

Today is shaping up to be an identical replica of the action from last Thursday as seen on the chart below. That's two flash crashes in less than a week. Whether this is driven by another margin hike known only to the CME and its closest, or due to news from Reuters that 17 senators have written to the CFTC to immediately crack down on excessive speculation in crude oil, is unclear, and largely irrelevant. The outright campaign to stomp out any non-stock trading is in full force. The message is clear: the only place where investors can henceforth put their money in is in stocks.

And from Reuters on the latest attempt to push all commodities to zero, via Reuters

A group of 17 U.S. senators called on the Commodity Futures Trading Commission on Wednesday to immediately crack down on excessive speculation in crude oil markets by hastening planned rules to limit concentration.

In a letter to the CFTC's chairman and commissioners, the lawmakers said they wanted the agency to unveil a plan by May 23 to impose position limits in all energy futures markets, beginning with crude oil. The agency has already proposed such limits as part of the financial reform, but has not finalised them.

The senators said the recent drop in crude oil prices, which fell nearly $10 a barrel in one day last week, defy supply and demand conditions. Oil prices bounced back almost $6 a barrel on Monday, but then fell more than $5 on Wednesday. Gasoline prices slumped by more than 8 percent.

"The wild fluctuation could only be the result of rampant oil speculation, plain and simple," said Senator Ron Wyden, one of the lawmakers who wrote to the CFTC demanding action, in some of the strongest language attacking speculators since oil prices surged to a record $147 a barrel in 2008.

"The CFTC needs a plan to impose position limits on oil speculation before oil speculators drive up prices even higher just as Americans go to the pumps to fill up for Memorial Day weekend," he said.

The CFTC is weighing new rules that would slap limits on the positions of big commodity traders, capping how many futures and swaps contracts any one company can control.

The Dodd-Frank law passed last July gives the agency the power to set position limits to curb excessive speculation in 28 commodities, including energy, metals and agricultural markets, "as appropriate."

But some of the agency's own commissioners are skeptical the limits would prevent a run-up in prices, and experts and traders have long said the rules risk making markets more volatile by reducting liquidity.

 

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Gubbmint Cheese's picture

to limit concentration in crude positions?

 

How's that move to limit concentration in (short) silver positions going?

 

*crickets*

 

 

JW n FL's picture

Synthetic Tops in Commodities Provided by the CFTC to the detriment of Americans and Betterment of “People’s Republic of China”!

 

Every time the CFTC releases its Margin Hike Press Release after hours here in the United States.. China gets to front run the Fucking Dip!

 

It is not bad enough that the idiots who back test blindly will cause artificial drag on the market with the Synthetic Peaks that have been provided to them, the algo’s can NOT even grasp the concept and for the most part the people who are programming are going to favor the numerically correct solution based on the larger law of averages..

 

But an American Commission, that is supposed to protect Americans.. is empowering China to once again have the upper hand?

 

What the FUCK?

 

Our Government has given China enough freebies for the week! And last week and pretty much going forward for-fucking-ever!

 

I hate stupid people! I hate the stupid Government that allows 50,000 jobs to go to China a MONTH! Now China gets to front run the downward pressure in Metals which benefits CHINA! Which is a foreign Power! More than the Americans it is supposed to help in the long run!!

 

TREASON! IS FUCKING TREASON!!

 

Senate Republicans blocked a Democratic Bill to End tax Breaks for Moving U.S. Jobs Offshore! 50,000 Manufacturing Jobs a Month since 2001 have LEFT! The United States for China! http://goo.gl/6qhnK

 

How much more are we going to have to give China? When is enough stupidity enough? This Country is FUCKED! And no one gives a shit! Everyone wants to pray for the rapture or live the lie of the Treasury! And where in the FUCK are the people charged with securing the national Security of the Country? Those mother fuckers are the First ones that should be hung for treason.. going back 30 – 40 years!

 

http://www.zerohedge.com/article/guest-post-when-does-managed-perception-become-reality#comment-1229816

 

Rigged Market Capitalism & Propaganda within the U.S. by the U.S.  http://goo.gl/RtmEr PLUS! http://goo.gl/qH4dN PLUS!! http://goo.gl/Uzm3q

 

 

Secret Hold On Whistleblower Protection Narrowed Down To Two Senators http://goo.gl/INklc

 

UBS Whistle Blower in Jail for helping the IRS with over 2,000 Tax Dodgers! http://goo.gl/s8JYp  

'Austrian tax evasion whistleblower' dies in Swiss jail http://goo.gl/w3bqP

Swiss tax whistleblower to give WikiLeaks new data & in Jail for it http://goo.gl/KiQhV  

No Bankers in Jail, No Tax Dodgers in Jail and Wall Street is Leveraged MORE than before! Tell the Truth? Go To Jail!
TrafficNotHere's picture

Posted the exact same thing in at least a few other threads. The spam is annoying.

ColonelCooper's picture

It isn't spam when it is on topic, and is not self promotion.

JW n FL's picture
by TrafficNotHere
on Wed, 05/11/2011 - 15:18
#1264503

 

Posted the exact same thing in at least a few other threads. The spam is annoying.

************************************************************

Your contribution.. in Total.. is to Bitch? Thats it? thats all you got? thats all you are?

How about fuck you, how about you can go fucking post or read whatever the fuck you want.. but if all you have is bitching, then do us all a favor and save that shit for your fat ugly wife.

For every topic on Commodities I did post this.. but this one I added to so it is not exactly the same..

as this does not promote me or a web site or anything other than the facts you little dicked republicant, shut the fuck up.. it doesnt even smell like spam.

leave the "W" sticker on you car so you are easy to find whent he lights go out..

DoChenRollingBearing's picture

Don't insult us little-dicked Republicans!  Hey, we have esteem issues here!

Loved your rant, JW!

JW n FL's picture

Chen your not a Republicant.. you are a Repulican~!

 

How are you sir? I hope all is well with you and yours? My best as always!

DoChenRollingBearing's picture

We are all OK.  Though I keep getting these urges to out and buy shiny yellow metal to keep me from throwing up.

Shooting my AK helps too.

Best to you and yours as well!

JW n FL's picture

I know I went off a lil while ago.. but every day I wake up and look at the price and look at what it was the night before and it pisses me off.. and China is Buying the shit our of the dip.. every fucking time!

 

On a lighter note.. I picked up 2 1986 proof eagles! I have a hard on for the libertados.. mexican silver proofs.. 1 oz 2 oz and 5 oz.. I want a couple 5 oz for paper weights.. people come in the office and would dig it! I think! topless liberty is hawt as well!

 

Stay away from the wolf ammo and get yourself a pistol AK for the fun of it!

cossack55's picture

Kick some ass, JW. I got your 6, but I don't htink you need the help. Hahahaha

+1000

SilverRhino's picture

This is a good rant!!  Much better than electro shock boy SP_666's deranged bullshit.

 

JW n FL's picture

You wont say that in October when the tail of the comet gets us all!

 

my thing is? if the comet is coming here in september.. why does it talk a month for th tail to get here?

 

the tail of a comet is  the viewable gas cloud.. that surrounds the entire rock.. so the tail is not a tail it is trick on peoples eye sight..

 

but the fact that this guy doesnt know that, or the person who wrote the story to begin with.. beggs the question.. how smart were they really?

 

Jus sayin! LMFAO

cossack55's picture

Screw the tail. I'm worried about its mass stealing our moon.

MrBoompi's picture

Hey, I give a fuck, and so do most of us here. But we aren't on Wall Street's or Big Oil's payroll. We aren't the owners at the top of the pyramid. You know, the reason why the P in Powers is capitalized.

A majority of us want a third party now. These two parties are worthless pieces of shit. But not to worry, they've made it almost impossible for a third party to gain any meaningful political power. After all, the government is not supposed to represent the people, only the Powers.

A revolution of some sort is the answer but believe it or not we are nowhere near the level of suffering for that to happen.

cossack55's picture

True, but I am not the only one designing new and improved guillotines.  More and more aberrant behavior being reported on what once was news stations.  The sheeple are losing it.

JW n FL's picture
by MrBoompi
on Wed, 05/11/2011 - 17:25
#1265221

 

Hey, I give a fuck, and so do most of us here. But we aren't on Wall Street's or Big Oil's payroll. We aren't the owners at the top of the pyramid. You know, the reason why the P in Powers is capitalized.

A majority of us want a third party now. These two parties are worthless pieces of shit. But not to worry, they've made it almost impossible for a third party to gain any meaningful political power. After all, the government is not supposed to represent the people, only the Powers.

A revolution of some sort is the answer but believe it or not we are nowhere near the level of suffering for that to happen.

*************************************************************

#1! hangin there Bro you are not alone! you realy are not alone.. a lot of people are fucking fed up.. but it is what it is.

You have more people around you, than you know.. that feel the same way you do. Almost everyone here feels the very same way!

#2.. buy some guns! buy some food.. Medicine.. like for a storm.. just in case, I am happy to encourage you to be safe and over prepared and you NEVER! need any of it! I feel no guilt in you and yours being safe..

#3 after you cover your ammo bases a couple times over.. grab some gold and silver.. and it can be 1 coin each.. when the price is LOW! not high! LOW! wait for it to be low, lots of vol. in this market courtesy of the FED / Treasury / Obama the Terrible!

#4 Try to get in a good head space so that you can lead in a bad situation instead of be bogged down in the negative. That cute baby is reason enough for you to get your head right, just in case..

#5 if you can, try to think about helping out your family and friends.. what can you do if things got bad to help them out? maybe its just a check list & maybe its more..

#6 what can you do for your community? how can you help your fellow man? this may help you get out of the house so that your wife does not kill you! lol if you are married you got that.

 

and the most important thing is hang in there, this Country is Great becuase of the People in it.. it is not great becuase of the scumbag bottom feeding Washington DC crowd. things will be ok, no matter how bad things get for a short while. Try to find some people close to you that are like minded and hang out and think ahead..

 

My best to you and yours and if you have any questions.. even if you think they are silly.. spitem out! I read 100 posts here before I post one every day.. at least, the guys and gals here are for the most part great.. use the gift of having a great group.

 

God Bless You and Yours!

Badabing's picture

Shout out to JW from NY I'm with ya buddy.

Ever bump fire a semiautomatic,? I have, very intimidating!

http://www.youtube.com/watch?v=bD213VW6WjY

 

Rahm's picture

Rookie.  bumpfire can get you 10years.

 

Pick up a Slide Fire stock for your AR15... it'll come with an approval letter from the BATFE saying it's legal.  Get them while you can!

http://www.youtube.com/watch?v=72USc0hXFcU

 

Badabing's picture

Very cool Rahm. Do they make a slide stock for my Calico M100 9mm?

 

“Rookie.  bumpfire can get you 10years.”

I’m a 56 year old war vet shot my first big buck with a 1913 Stevens 12 ga @ 16 and forming a militia can get you killed fuck the ten years I’m a patriot.

JW n FL's picture

http://www.youtube.com/watch?v=Cc_in7Rhw0A&feature=related

looks like a clean install..

reminds me of the shot gun shock / spring recoil thingamabob.. Pro term!

better than a class 3 with a storage *****"ROOM!"***** please change the language of your trust or corp / llc / llp!

Rynak's picture

About algos.... i never really grasped why the fuck these algos are even used. But then again, i also don't understand what the point of most (not all) TA is. Markets are not physics - they are driven by man-made events and marketmaker activities and regulators. The most "automation" that may make sense, is setting limits on when to buy and when to sell. As for the rest - isn't that what humans are for?

But then again, maybe i'm approaching this too logically.

strannick's picture

Or hows that move going to stop HFT in all commodities and REALLY curb volitility?

*more crickets*

When JPM and co. want to keep HFT its in order to 'provide liquidity'.

However, when they raise position limits, that precious, necessary 'liquidity' they so treasure, becomes volitile speculation that must be purged.

 

SheepDog-One's picture

How the all time record high margin-bought stock market doing? Any calls for limiting the wild speculation there? No I dont think so.

AbandonShip's picture

Good point.  I wonder if these saintly senators will also call for position limits on OIL ETFs (OIH) or Leveraged Long/Short Commodity and PM ETFs?

cossack55's picture

Right. The scumbags can't even spell CDO or CDS.

Missiondweller's picture

My exact thoughts. Kudos to you.

Dburn's picture

Gary Gensler is in charge of the CFTC...a 17 year veteran of Goldman Sachs. GS  has been a real cheerleader for the buy and hoard futures strategy on commodities.

www.cftc.gov

Long-John-Silver's picture

This is going to result in shortages of all commodities. No one will will take the risk to buy and sell them. I envision a return to long lines at few service stations that will continue to sell gasoline and diesel fuel.

As for Silver and Gold: This will not deter the bugs from buying physical or convince them to sell it. These people do not have strong hands, they have buried vaults awaiting the day the Dollar dies.

cossack55's picture

Roger that. Don't forget to spoof.

Math Man's picture

Be careful here Turd.  You might be leading your lemmings off the cliff.

The short covering rally that ended last night means there aren't many more buyers left.

Silver could go much, much, much, much, much, much lower. 

Commoditites in general look pretty fucked.  Crude, wheat, corn, etc... nothing looks good here.

There will be a ****LOT**** of money coming out of commodities in the coming weeks and months.  If you're invested in one of these so called "hedge" funds that happened to drop 20% on a 5% down move in the commoditity complex, you're not asking questions, you're just sending a redemption request.   The levered speculators are going to be pulled out of the market by both increased margin requirements and the good old fashioned way --- through redemptions.  And when the redemptions start hitting, look the fuck out.

Mr Pinnion's picture

much x 6. %wise, how much is in a much?

Regards

Ozzy

akak's picture

.... only $5 to dig from the ground .....

..... the shit is fucking everywhere! .....

.... only $5 to dig from the ground .....

..... the shit is fucking everywhere! .....

.... only $5 to dig from the ground .....

..... the shit is fucking everywhere! .....

.... only $5 to dig from the ground .....

..... the shit is fucking everywhere! .....

.... only $5 to dig from the ground .....

..... the shit is fucking everywhere! .....

.... only $5 to dig from the ground .....

..... the shit is fucking everywhere! .....

...... brawk brawk brawk! ........

 

Rynak's picture

Commodities too...... why the hell is their price so high? It just makes no sense..... must be a bubble......

...or maybe, it's the two biggest bubbles on the planet: Population size, and fiat

cossack55's picture

Please, please take silver to a dollar. I still have some holes that need filling.  My goal is a tonne.

JW n FL's picture

2,204.. I swore it was 2.2lbs.. my S. FL up bringing.. Oops!

 

So 500 oz in a monster box..  31.25lbs

 

71 Monster Boxes! (70.6)

 

Now that would be a GREAT looking little hill.

 

Coins make me feel like a Pirate! ARRRGGGGG!

 

 

kentfinance's picture

probably a safe bet nothing will happen

they cannot even agree on permanent funding

 

Creed's picture

It seems odd that only oil & silver have been blatantly manipulated downwards.

Oil I understand, but silver?

Seems to lend credence to the idea that TBTF banks were in trouble over their short positions in silver.

Either that or it needed to be crushed as an alternative to equities; or both.

MatrixLinx's picture

I almost forgot that JPM gets a pass on silver position limits.

agent default's picture

May work for a while, or until the HKME opens.  But in the long run forget it.

The commodities surge is on, courtesy of the FED. No getting around this one.

traderjoe's picture

Hmmm...which would you rather own - THE key global commodity or Bennie Bucks?