This page has been archived and commenting is disabled.

Dodd-Frank Precious Metal Trading Prohibition Could Make Hedge Fund FX Trading Illegal

Tyler Durden's picture




 

Below we present some additional analysis on the implementation of Dodd-Frank's precious metal and FX OTC spot trading prohibition from law firm Morgan Lewis, as well as another potentially far more disturbing implication for non-US Hedge Funds which trade FX (and since virtually all hedge funds are located offshore due to tax implications, and since most hedge funds have now shifted to FX trading in an attempt to pursue volatility, we imagine this means absolutely everyone in the space). Basically it appears that hedge funds that have "one single US investor [who] has less than $10 million in investable assets, that fund will be classified as a retail FX fund. If an FX fund has investors that fail to meet the $10 million threshold,
that fund would therefore not be considered an eligible contract
participant. Gary Alan DeWaal, senior managing director and group general counsel at prime brokerage firm Newedge, said most non-US FX hedge funds seemed unaware of these obscure, burdensome requirements. “Most hedge funds would not think that they are retail funds. However, all it takes is one US client, who fits into this bracket to make them a retail FX fund. I think a lot of hedge funds could be forced to either throw out these clients from their funds or change their counterparties,” added DeWaal." Forget the liquidity freeze courtesy of Greece. Our own congressional and senatorial idiots are about to do it on their own without any country having to go into default.

And from COO Connect:

Hedge funds trading FX could be caught out by Dodd Frank

Non-US hedge funds trading in FX could be forced to find new US
counterparties if they want to avoid being inadvertently fined for
non-compliance by US regulators under some of the more obscure
provisions in the Dodd Frank Act.

Under Dodd Frank, hedge funds
trading FX with a US investor base constituting more than 10% of the
overall investors, would fall under US jurisdiction. However, if one
single US investor has less than $10 million in investable assets, that
fund will be classified as a retail FX fund. This is because Dodd Frank
states all investors must be eligible contract participants – not just
the fund.

If an FX fund has investors that fail to meet the $10
million threshold, that fund would therefore not be considered an
eligible contract participant. This extra-territorial legislation could
force some non-US funds to change their counterparties and use certain
US Futures Commission Merchants (FCMs) or other US registrants.

Gary
Alan DeWaal, senior managing director and group general counsel at
prime brokerage firm Newedge, said most non-US FX hedge funds seemed
unaware of these obscure, burdensome requirements. “Most hedge funds
would not think that they are retail funds. However, all it takes is one
US client, who fits into this bracket to make them a retail FX fund. I
think a lot of hedge funds could be forced to either throw out these
clients from their funds or change their counterparties,” added DeWaal.

As
things stand, numerous Dodd-Frank provisions look set to be implemented
within 60 days unless Congress, the Securities and Exchange Commission
or the Commodity Futures Trading Commission raises any major objections
or queries

 


 

And going back to the topic at hand, some further advisory insight from Morgan Lewis on the upcoming OTC precious metal trading halt:

As things currently stand, on July 16, when the Dodd-Frank
Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act)[1]
becomes effective, Securities and Exchange Commission (SEC)-registered
broker-dealers (BDs) will no longer be able to enter into many types of
foreign currency transactions for their retail customers.

Although the law is not entirely clear, there is even a question as to
whether BDs may purchase foreign currency for retail customers in
connection with foreign securities trades if the settlement date for the
currency transaction extends beyond two days.[2]
The reason for these changes is that the Dodd-Frank Act included a
requirement that the applicable functional regulator pass rules
governing conduct of a regulated entity regarding retail forex in order
for an entity to be able conduct such business. The Commodity Futures
Trading Commission (CFTC) has passed rules[3] and the Federal Deposit Insurance Corporation (FDIC)[4] and the Office of the Comptroller of the Currency (OCC)[5] have proposed rules, but the SEC has done neither.

The bad news for BDs does not end there. A provision in the
Dodd-Frank Act disallows a BD from using its CFTC-registered futures
commission merchant (FCM) to conduct such foreign currency transactions
(even though a stand-alone FCM may legally carry out the trades), and
the CFTC has provided in its rules that a BD may not solve its problem
by registering as a retail foreign exchange dealer (Forex Dealer). Going
forward, unless the SEC acts, the only types of entities that may
solicit and effect foreign exchange transactions with customers that are
not "eligible contract participants" (ECPs) are banks and stand-alone
FCMs and Forex Dealers. Investment advisers that assist retail customers
will also have to separately register as commodity trading advisers
(CTAs) in order to advise on foreign exchange trades carried out at FCMs
and Forex Dealers.

The potential impact of these changes on existing transactions
between retail customers and BDs leaves room for doubt regarding their
ongoing validity. As a result, BDs and investment advisers that work
with retail customers should evaluate their current foreign exchange
business and evaluate how best to address the changes from a structural
perspective, including possibly moving existing transactions to a bank
affiliate or a stand-alone FCM or Forex Dealer.

Retail Forex Transactions

The Commodity Exchange Act (CEA) provides that only enumerated
regulated entities are permitted to "solicit" or transact in
off-exchange foreign currency transactions (forex transactions) for
non-ECPs.[6]
These regulated entities include U.S.-regulated banks, SEC-registered
BDs, FCMs, and Forex Dealers. Covered forex transactions include
forwards and options conducted in the over-the-counter market as well as
off-exchange futures and leveraged transactions that do not result in
actual delivery of currency. An ECP is defined in Section 1a(18) of the
CEA, as amended by the Dodd-Frank Act, and includes, for purposes of
transacting in foreign exchange, (i) a corporation, partnership,
organization, trust, or other entity (other than a commodity pool) that
has total assets exceeding $10 million; (ii) an individual that has in
excess of $10 million "invested on a discretionary basis";[7]
and (iii) a commodity pool that is formed and operated by a person
regulated under the CEA (but only if all of the participants in the pool
are ECPs).

Spot transactions are excluded from the scope of the regulation, as
are physically settled transactions that are not "offered, or entered
into, on a leveraged or margined basis, or financed by the offeror."
Spot transactions are narrowly defined to include only physically
settled transactions settling in two business days and transactions that
create an enforceable obligation to deliver among persons that have the
ability to do so in connection with a line of business.[8]
Neither the SEC nor the CFTC has provided interpretive guidance on what
it means for a transaction to be entered into on a leveraged or
margined basis or to be financed by the offeror. Although it would be
appear contrary to the common meaning of the term "financing," a
currency conversion carried out by a BD in connection with a securities
purchase for a retail customer could be interpreted to be a "financing"
due to the settlement risk. As a result, to the extent that the statute
was to be interpreted in this way, BDs would not be eligible to carry
out those conversions for retail customers after July 16, absent SEC
relief. While a BD could avoid this result by settling the foreign
currency conversion T+2 (ahead of the T+3 settlement for the security),
that approach would impose additional market risk on either the customer
or BD, depending upon how the one-day pricing risk was allocated.

Broker-Dealers Offering Retail Forex

Although the CEA provides that enumerated regulated entities may act
or offer to act as counterparty in retail forex transactions, the
Dodd-Frank Act added Section 2(c)(2)(E)[9]
to the CEA, which provides that an otherwise regulated entity, such as a
bank or BD, for which there is a federal regulator, may not offer or
enter into retail forex transactions unless offered pursuant to rules of
the applicable federal regulator.[10]
The applicable regulator for BDs is the SEC. However, to date, the SEC
has not published rules and the staff has informally suggested that the
SEC is not likely to do so. As a result, as of July 16, 2011, BDs will
no longer be able to effect transactions to purchase or sell currency
for their retail customers, unless the currency transaction will be
physically settled in two business days or otherwise falls outside the
coverage of the CEA (e.g., because the transaction is not leveraged,
margined, or financed). The CEA does not include exemptions for hedging
or de minimis transactions.

The prohibition on soliciting and transacting in retail forex applies
to every type of BD. As a result, clearing firms will not be able to
facilitate retail forex trades for customers of their U.S. and foreign
correspondents. A correspondent BD would not be allowed to handle
execution of retail foreign exchange itself (e.g., through its
institutional foreign exchange desk) unless the customers are ECPs. BDs
that direct retail forex to another entity that is appropriately
registered for the business (e.g., an FCM) would not be affected.

The CFTC's ability to fix this problem is limited. The CFTC is not
allowed to regulate or have its rules apply to a BD. The CEA expressly
provides that a BD may not qualify to carry out this activity by routing
the business through an FCM that is part of the BD. In its forex rules,
the CFTC has similarly provided that a BD may not address the problem
by dually registering as a Forex Dealer.[11] As a result, unless the SEC acts, retail forex may only be conducted by a regulated entity that is outside of a BD.

BDs who currently conduct retail forex transactions for their
customers should work with their customers to open separate accounts for
the business at an FCM, bank, or Forex Dealer. In terms of legacy
transactions, it is not clear whether or not they would continue to be
enforceable and legal if carried by the BD. As a result, absent SEC
relief, BDs may want to consider novating them to a properly regulated
FCM, bank, or Forex Dealer.

Investment Advisers

Investment advisers are also impacted by these rules. Under the CEA
and CFTC rules, a person who exercises discretionary authority over a
retail forex account carried at an FCM or Forex Dealer must itself
register as a CTA. The CEA excludes from this requirement other
regulated entities that are permitted to act as counterparty to retail
transactions, but does not exclude registered investment advisers. Since
BDs will no longer be a type of authorized entity for such activity,
financial advisers and other types of registered investment advisers
(RIAs) will no longer be able to advise retail customers on foreign
exchange transactions conducted through an FCM or Forex Dealer unless
they are licensed as a CTA with the CFTC. To the extent that the retail
foreign exchange transactions on which an adviser provides advice are
executed through a bank, a discretionary adviser will not be required to
register as a CTA.

Conclusion

Section 4(a) of the CEA provides that contracts executed in violation
of the CEA are illegal. As a result-notwithstanding that many of the
retail forex transactions carried out today may in fact be outside of
the class of transactions regulated by the CEA, as may be much of the
advice on forex that is provided to retail customers by investment
advisers-given the lack of clarity and the fact that transactions
conducted in violation of the CEA pose risks regarding the
enforceability of trades, BDs and investment advisers should examine
their retail foreign exchange activities and consider moving their
affected business to an FCM, Forex Dealer, or a bank.

If you have any questions or would like more information on the
issues discussed in this LawFlash, please contact any of the following
Morgan Lewis attorneys: 

New York

P. Georgia Bullitt
Michael A Piracci
F. Mindy Lo

 


[1]. Pub. L. No. 111-203 (2010).

[2].
As an example, if a customer places an order to purchase ordinary
shares of British Petroleum, payment must be made in British pounds
sterling. If the customer only has U.S. dollars in his or her account,
the BD executing the transaction must purchase the pounds by settlement
date to deliver in payment for the ordinary shares. Settlement of the
stock purchase is typically T+3, or longer than the two business days
referenced in the Commodity Exchange Act for "spot" currency
transactions that are excluded from the requirement that a regulated
entity act as counterparty. Whether the conversion may be legally
carried out by a BD depends on whether the BD would be deemed to be
"financing" the conversion or not.

[3]. See http://www.cftc.gov/ucm/groups/public/@lrfederalregister/documents/file/2010-21729a.pdf.

[4]. See 76 Fed. Reg. 28358 (May 17, 2011).

[5]. See 76 Fed. Reg. 22633 (Apr. 22, 2011).

[6]. Section 2(c)(2)(B)(i)(II of the CEA

[7].
This provision is stricter than the current definition that counts as
an ECP a natural person having more than $10 million in assets.

[8]. Section 2(c)(2)(B)(i)(II) of the CEA.

[9]. Section 742(c) of the Dodd-Frank Act.

[10].
Section 2(c)(2)(E)(ii)(I) of the CEA prohibits an otherwise regulated
entity, such as a registered BD, from entering into a forex transaction
described in 2(c)(2)(B)(i)(I) of the CEA, unless done pursuant to rules
of a federal regulatory agency. The transaction described in section
2(c)(2)(B)(i)(I) of the CEA is a transaction in foreign currency that
"is a contract of sale of a commodity for future delivery (or an option
on such a contract) or an option" not executed or traded on an exchange.
The scope of what constitutes a transaction that would be covered by
the provision is not clear and has been the source of prior litigation. See CFTC v. Zelener, 373 F.3d 861 (7th Cir. 2004), reh'g denied, 378 F.3d 624 (7th Cir.).

[11]. 17 C.F.R. § 5.1(h)(1).

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sat, 06/18/2011 - 15:05 | 1380717 swissaustrian
swissaustrian's picture

Reducing liquidity - the answer to everything

come on: are politicians able to learn?

Sun, 06/19/2011 - 00:43 | 1381879 Oh regional Indian
Oh regional Indian's picture

Why Swiss, it's such a picture perfect playbook play, yes? History rhyming, only now they have a much more informed public and far more way to play the game. In fact, the liquidity withdrawl is not even a rhyme, it's a straight out copycat move. 

See on the Macro side, Basel III is all about "liquidity" management, on the downside, no liquidity Fo U!

Flood followed by drought. Liquidity, whether in the form of rain or money, is a beast, best managed in reasonable portions.

Doddering around, trying to find ways.....

ORI

http://aadivaahan.wordpress.com/2011/06/17/nuclear-american-cross-other-thoughts/

Sat, 06/18/2011 - 15:08 | 1380729 I think I need ...
I think I need to buy a gun's picture

gold revaluation

Sat, 06/18/2011 - 15:32 | 1380799 Bindar Dundat
Bindar Dundat's picture

What about Sprott Silver and Gold Physical?  Where does it stand?

Sat, 06/18/2011 - 15:48 | 1380840 Lionhead
Lionhead's picture

Go here for a practical explanation:

http://jessescrossroadscafe.blogspot.com/

 

Sat, 06/18/2011 - 17:26 | 1381005 sitenine
sitenine's picture

Thanks for the link.  Good writeup.

I was thinking - been thinking since last night when the SHTF - perhaps this is some sort of tit-for-tat against Geithner's position of not exempting some Forex Options?

http://www.reuters.com/article/2011/03/25/financial-regulation-derivativ...

Just speculating at this point.  I don't think we know the extent of the repercussions as of yet.

Sat, 06/18/2011 - 22:00 | 1381624 Lionhead
Lionhead's picture

Thanks for your link to Reuters; this fits into my thoughts about a collapse & the use of the ESF to counter it. The ESF is one story all the media seems to be ignoring, but in a nutshell it gives the Sec. of the Treasury unlimited powers with no oversight in using it. Geithner then is only accountable to the president. He would need it in the same way Paulson drafted his three page unlimited powers TARP plan.

"The Dodd-Frank Act appears vague as far as the Secretary of the Treasury's ability to exempt options on foreign exchange forwards and foreign exchange swaps," Peter Malyshev, an attorney with Winston & Strawn, said in an interview this week."

Yes, no doubt as Congress has willingly abdicated their power to the Secretary on use of the ESF. All these little rumblings may be the prelude to a collapse in that TPTB are lining up & tying up the loose ends in case the worst happens.


Sat, 06/18/2011 - 23:34 | 1381782 SilverIsKing
SilverIsKing's picture

What's most humorous about this entire bill is that if you asked either Dodd or Frank what this all means, they'd have absolutely no clue.

Sat, 06/18/2011 - 15:22 | 1380767 TheFourthStooge-ing
TheFourthStooge-ing's picture

I thought hedge funds were exempt from all laws.

 

Sat, 06/18/2011 - 15:33 | 1380794 swissaustrian
swissaustrian's picture

They´ll just move out of the usa...

Sat, 06/18/2011 - 18:16 | 1381181 wisfool
wisfool's picture

Does it matter? 

A way around this (maybe??):  even if there is a 'single' US resident that falls below the threshold... this gives other non-US residents an advantage to create intermediaries that take US residents funds and trade on their behalf?  US residents no longer participate 'directly' but through another middle man

Sat, 06/18/2011 - 15:19 | 1380768 in4mayshun
in4mayshun's picture

Mmmmm. I love you physical silver, you look so pretty sitting in my safe.

Sat, 06/18/2011 - 17:02 | 1381002 Cognitive Dissonance
Cognitive Dissonance's picture

You have a safe? Really?

What's wrong with the tree house out back?

Sat, 06/18/2011 - 21:20 | 1381510 Hulk
Hulk's picture

Doesn't hold 4 tons of Ag CD. Gotta think BIG dude!

Sat, 06/18/2011 - 22:38 | 1381690 Cognitive Dissonance
Cognitive Dissonance's picture

LOL

4 tons you say? Well then his safe ain't gonna work either unless it is the walk-in variety.

But I like your thinking. For once bigger IS better. :>)

Sat, 06/18/2011 - 17:24 | 1380772 sitenine
sitenine's picture

Any analysis on what this might do to short term valuations?

Will Forex PM positions try to swap their paper for physical?  Doesn't this somehow create a disconnect between ETFs and physical?  What does this mean for contango - or do we care anymore?  FFS, I need help understanding all this.  As stated above, I'm more interested in the short term (prior to July 15), but long term views also welcome.

Sat, 06/18/2011 - 17:44 | 1381107 scratch_and_sniff
scratch_and_sniff's picture

At the most, it will mean a lot of retail positions being squared, longs and shorts, cant see it having a huge impact on the actual market. If you still want to trade PM's online, open a UK account.

Sat, 06/18/2011 - 23:35 | 1381784 SilverIsKing
SilverIsKing's picture

No UK account if you live in the US.

Sun, 06/19/2011 - 01:05 | 1381898 scratch_and_sniff
scratch_and_sniff's picture

You can open one legally, there is no comeback as long as you declare it. FXCM customers were opening new UK accounts to get over FIFO and new margin requirement rules some time ago. Some traders thought it was unfair that they could no longer use 400:1 leverage...So, yes you can have an account anywhere in the world, Aisa Pacific, Canada, Middle east, UK, Europe etc there is nothing stopping you.

Sat, 06/18/2011 - 15:22 | 1380776 scratch_and_sniff
scratch_and_sniff's picture

Its a bit of a push getting through that, but it seems to me that retail FX will come out with its head still on. Since most of the BD's these days use "NO Dealing Desk" execution, or DMA, the regulated banks are holding the risk. I think spread betting FX and other kinds of binary derivatives would be wiped out though, but the US didn’t have those to begin with.

Sat, 06/18/2011 - 15:39 | 1380798 Oracle of Kypseli
Oracle of Kypseli's picture

Those who need to do these trades, can do very easily with a foreign address. Piece of cake. All they ask is a faxed copy of a utility bill, passport (US is okay) and an address. Since no mail is ever sent, or it can be diverted, go for it.

Maybe Banzai7 can work out fake utility bills in the Marshall Islands. Frank and Dodd will rot in Hell. The collective hate and contempt for these half-of-men is being transmitted by wi-fi nowadays.  

Sat, 06/18/2011 - 15:40 | 1380826 The Fonz
The Fonz's picture

And so the market lives! Though now a black market. I for one will look into doing this. Its time to take my trading account out of US control I think.

Sat, 06/18/2011 - 15:47 | 1380839 Oracle of Kypseli
Oracle of Kypseli's picture

These trades have been helpful if you hold gold or silver calls and the gold or silver price pops high before opening of options trading, you can short on forex trading and sell at the opening. thus, if the price goes down again before opening, you missed the opportunity to sell the calls for profit but you made some on the FX.

If the price stays relatively close, you are even on the FX and you secure the profits on the calls

Nine out of ten times that has been the patern.   

Sat, 06/18/2011 - 23:43 | 1381795 SilverIsKing
SilverIsKing's picture

I thought about what you are suggesting but in the US, you are required to file this form:

http://www.irs.gov/pub/irs-pdf/f90221.pdf

Now you can choose not to file the form and keep the account hidden but you'd be taking a giant risk if the govt somehow finds out about the account.

Sat, 06/18/2011 - 15:27 | 1380778 Id fight Gandhi
Id fight Gandhi's picture

Why are they doing this -- straight up?

Sat, 06/18/2011 - 15:35 | 1380796 Azannoth
Azannoth's picture

Capital contols, the Ponzi can't stand on it's own anylonger, it needs to be fully backed by law

Sat, 06/18/2011 - 15:33 | 1380802 Lord Koos
Lord Koos's picture

I kinda like it... get physical, or get out.

Sat, 06/18/2011 - 16:07 | 1380882 nope-1004
nope-1004's picture

I agree.  No where in nature are there conditional laws.  No where can we change natures conditions as we see fit:  No where is the sun rising "conditional" upon something else we want to introduce tomorrow.  Nor are thunderstorms, rain, night, wind, snow.....  Natural laws always prevail.  Paper schemes are doomed.

This talk about manipulating paper even more than it is now affects me ZERO.  I hold natural physical.  I will keep buying natures' physical.  The ponzi is falling apart, and if the 2 year rate is capped as rumors suggest, then this action is another reason to force big players to play by the big bankers rules in an effort to maintain price fixing going forward.  They bought themselves another few months.

This will be a wonderful thing to watch.  They are losing control, so do what comes natural to a desperate party:  act desperate.

I never thought I'd see fascism in the US, but even a broken clock is correct twice a day.

 

Sat, 06/18/2011 - 17:37 | 1381071 Raymond Reason
Raymond Reason's picture

This whole thing is going to end in US revolution. 

Sun, 06/19/2011 - 11:46 | 1382470 Papasmurf
Papasmurf's picture

If you don't hold it, you don't own it.

Sat, 06/18/2011 - 15:42 | 1380835 The Aviator
The Aviator's picture

Great timing for the Silver Viral Project!
http://silverdoctors.blogspot.com/2011/06/silver-viral-project-guidebook...

Register your agent here...lets take silver viral! http://silverdoctors.blogspot.com/p/silver-viral-project.html

Sat, 06/18/2011 - 15:45 | 1380845 rsi1
rsi1's picture

I think nothing will happen. This will be changed if it is as the text says, because it is stupid and does not make sense.. Written by lawyers.. mmm. trying to suck more fees as usual for doing nothing useful?

Sat, 06/18/2011 - 15:49 | 1380854 matthylland
matthylland's picture

Section 413(a) of the Act alters the financial qualifications of who can be considered an accredited investor, and thus a qualified as eligible participant (“QEP”). Specifically, the revised accredited investor standard includes only the following types of individuals:

1) A natural person whose individual net worth, or joint net worth with spouse, is at least $1,000,000, excluding the value of such investor's primary residence;

2) A natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with spouse in excess of $300,000 in each of those years and a reasonable expectation of reaching the same income level in the current year; or

3) A director, executive officer, or general partner of the issuer of the securities being offered or sold, or a director, executive officer, or general partner of a general partner of that issuer.

Sat, 06/18/2011 - 23:42 | 1381799 SilverIsKing
SilverIsKing's picture

Does this read as:

1 plus either 2 or 3?

or

1,2, or 3?

Sat, 06/18/2011 - 15:58 | 1380865 Quixotic_Not
Quixotic_Not's picture

Could?

Sat, 06/18/2011 - 15:59 | 1380866 ONEPurpose
ONEPurpose's picture

@The Aviator

 

HA! That's too funny, I just signed up for it b4 coming here. Sweet. Looks like it's catching on proper quick.

 

I've been following them a lot lately. The Silver Docs are just in time for the rally, huh? Wonder if they did that on purpose, releasing it the day this news went public.....strange.  

Sat, 06/18/2011 - 16:01 | 1380869 The Aviator
The Aviator's picture

yeah, what better time to convince people to dump their paper than the day its announced paper gold and silver OTC trading will be outlawed!

Sat, 06/18/2011 - 16:04 | 1380879 ONEPurpose
ONEPurpose's picture

Crazy insight.... The Guidebook is nuts, too. This thing might get huge. Glad to see you're on board friend. See ya' at SilverDoctors! 

 

Make Silver Viral! 

Sat, 06/18/2011 - 16:15 | 1380898 Gringo Viejo
Gringo Viejo's picture

Extend & Pretend will be taken to the "Nth" to maintain the status quo. No matter. That which Westerners don't buy & bury will end up in Asia. So when all is said done, "The Empire Strikes Back II" doesn't change jack shit. In truth, I'm kind of enjoying the show.

 

Sat, 06/18/2011 - 16:16 | 1380909 Freddie
Freddie's picture

Mugabe and the Democrats.

Sat, 06/18/2011 - 16:33 | 1380941 Dapper Dan
Dapper Dan's picture

Lets send Ron Paul after them, we can help.

Tar and feather,  the new campaign slogan. 

updated 3:58 p.m. Eastern Time

NEW ORLEANS - Ron Paul won the presidential straw poll at the Republican Leadership Conference in New Orleans Saturday, easily beating out his rivals for the GOP nomination. Second place went to Jon Huntsman, the little-known former Utah governor who missed the conference with a cold.

With the Libertarian-leaning Paul seen as unlikely to win the party's nomination, the second-place finish will be seen as a victory for Huntsman, the former ambassador to China who is announcing his presidential campaign next week. Huntsman's wife and daughter traveled to the conference in his place, though they did not speak.

Paul finished with 612 votes, followed by Huntsman with 382. Michele Bachmann took third with 191 votes, followed by Herman Cain with 104 votes. No other candidate got more than 100.

Mitt Romney took 74 votes, Newt Gingrich 69, Sarah Palin 41, Rick Santorum 30 and Tim Palwenty 18.

Read more: http://www.cbsnews.com/8301-503544_162-20072266-503544.html#ixzz1Pf5ACVuT

Sat, 06/18/2011 - 17:41 | 1381086 JW n FL
JW n FL's picture

what are you a paid fucking repugnant plant? who cares about the wigger and who cares about you and your repugnants.. no one.. a Lobby Whore is a Lobby Whore is a Lobby Whore.

 

Whether your dumbass likes the name plate given the Lobby Whore or not is fucking beyond irrelevant!

 

Go get some more koolaide, go listen to them tell you what they know you will LOVE to Listen too! hurry get your tested and committee fucking approved branded koolaide you Moe-Ron!

 

 

Sat, 06/18/2011 - 19:13 | 1381272 Dapper Dan
Dapper Dan's picture

To your first question, NO! I just like Ron Paul. allthough I liked him more as a Libertarian.

Second point, I am not a dumb ass but I do sometimes type like one.(I use spell check more than I would like to admit) you..not so much. 

Third point,  I have not drunk kool-aid since the summer of 2002.

Final point, we are going to have to vote for someone,  do you have anyone in mind? 

O.T.  Do you surf JW?

 

Sun, 06/19/2011 - 00:40 | 1381880 JW n FL
JW n FL's picture

yes.. pro surfing! anti voting.. two party system is a control.

 

and if Ronnie boy got in.. and rocked the boat.. he would be dead in seconds.. not months like Kennedy.

 

Kennedy was the last President to end the FED and put America back on real money.

Sun, 06/19/2011 - 06:01 | 1382101 Jack Napier
Jack Napier's picture

I used to like RP until I found out half his family are in the masonic order. He talks a good game, but I have my doubts. HR1207 was gutted at the last second.. a 180 day buffer before releasing selective data is not what I call transparency. Though I like what he's doing on the House Financial Services Subcommittee, it seems too little too late to me. Funny how when he asked the Fed about their gold certificiates they said that the US Treasury has all the gold. Mike Maloney says the other way around. I think we have bigger problems than where the gold is. It's probably full of tungsten anyway. Chuck Baldwin FTW.

Sat, 06/18/2011 - 16:52 | 1380980 bigmikeO
bigmikeO's picture

Can someone answer these questions for a newbie?

In your opinion, will the new Frank-Dodd July 15 OTC ban on gold/silver cause the price to go up, or go down?

Does this mean that I won't be able to purchase gold/silver from my local coin store or Gainesville Coins? Or does this effect some other form of PM purchases? (Ex: paper)

Sorry to ask such fundamental questions. I lurk here all the time, enjoying the conversation, but it looks like I still have a lot to learn.

Sat, 06/18/2011 - 17:07 | 1381012 Rynak
Rynak's picture

I am not certain about this, but from how i understand this so far, this has nothing to with taking physical delivery - just paper stuff.

Sat, 06/18/2011 - 17:48 | 1381108 JW n FL
JW n FL's picture
by bigmikeO
on Sat, 06/18/2011 - 16:52
#1380980

 

Can someone answer these questions for a newbie?

 

In your opinion, will the new Frank-Dodd July 15 OTC ban on gold/silver cause the price to go up, or go down?

 

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

 

1. Dont ever buy anything from Gainesville Coin... dont believe me? ask the others that have been fucked over by Gainesville Coin.

 

2. If you are worried.. since you are new.. I am willing to buy all of your Gold and Silver at the same discount you are worried that it will fall too!

 

Below is a Gainesville Coin demand letter! They fucked over my mother! My MOM?!?!?!?!?!?!?!?

 

Dear Mr. Castellano,

 

As you know from the below email, our office has the honor and responsibility of representing XXX. XXXXXXXXXXX.  We would appreciate confirmation as soon as refunded our client in full.  I am at a loss to understand why you required wire instructions when a credit will suffice.

 

In any regard, please refund the amount in full promptly and be sure to reply to me that same has been completed.

 

Thank you for your assistance.

 

Rusty Huseman

 

William R. Huseman, P.A.

3733 University Blvd. West, Suite 305A

Jacksonville, Florida 32217

(904) 448-5552

Fax (904) 448-5653

 

Sat, 06/18/2011 - 23:58 | 1381816 SilverIsKing
SilverIsKing's picture

I normally buy from Tulving and was considering Gainesville for a change but I'll now scratch them off my list.  Thanks.

Sun, 06/19/2011 - 11:48 | 1382487 Papasmurf
Papasmurf's picture

Avoid SCPM too.  I had delivery issues with them years ago.

Sat, 06/18/2011 - 16:58 | 1380986 slewie the pi-rat
slewie the pi-rat's picture

To US Senators Feinstein & Boxer:

Dear DiFi & Babs,

1) repeal Dodd-Frank

2) repeal Graham-Leach-Bliley (which repealed glass-steagall).

3) listen to slewie for a change!  LOL!   and i think you're both great without the shoulder-pad look; avoid the maid look, though.  stay trendy, BiCheZ!

Sat, 06/18/2011 - 23:55 | 1381817 SilverIsKing
SilverIsKing's picture

"Repeal Dodd-Frank."  That has a nice ring to it.

Sat, 06/18/2011 - 17:02 | 1380988 bigmikeO
bigmikeO's picture
Duplicate post
Sat, 06/18/2011 - 17:11 | 1381021 slewie the pi-rat
slewie the pi-rat's picture

congrats on the early double post!  in the long run we have zero anxiety.

who the fuk knows?  there is this law and these lobbyists and these agencies and these thousands of otherwise-unemployed american goobermint employees trying to figure out what to doodoo.  how could anyone forsee any problems? 

as for price:  if you think that the value of fiat to buy PMs is gonna change, you might be right.

stay tooned... 

Sat, 06/18/2011 - 17:42 | 1381089 francis_sawyer
francis_sawyer's picture

@SPR

I concur... "who the fuk knows?"...

My best conclusion would be, at minimum, we're about to see just how REALLY STUPID Americans are (and the dividing line between both classes will become even more evident that it already was)...

 

 

Sat, 06/18/2011 - 17:42 | 1381101 francis_sawyer
francis_sawyer's picture

Actually... My 'first' instinct when hearing the news was to drift towards the next class of hoardable commodities...

Cu comes to mind...

So my best thought (at the moment)... If TPTB want to play a FIAT game this way, is to start hoarding Nickles (or pre 1982 pennies)... That puts bot the fiat & the physical into your greasy little hands...

I think I'll start getting nervous when they announce that they'll stop minting 2012 (and on) US Nickles...

The Chinese must be laughing their asses off right about now...

 

Sat, 06/18/2011 - 17:28 | 1381042 JW n FL
JW n FL's picture

at the very least re-structuring almost ALL! Client Bases.. into the haves and have nots.. so that accessibility to the bulk of trading can continue.

 

In ALL houses..

 

Lets say it is not a hedge fund but a mutli-family..

Some participants or some trusts will not meet the threshold, so A! LOT!! of restructuring will be happening.. and then you have the compliance issues.

 

Trust 1, 2, 5 & 6.. will be in compliance but 3, 4, 7 & 8 will be out of compliance in a single family structure just based on real income requirements. (assupmtion of a two child household)

 

You have families that have segmented cash flow from other assets. The umbrella approach is dead and gone before my time.

 

This will be a Tax Code Fucking Debacle for On-Shore or Off-Shore Trusts, the way it reads to me, express separation of all assets and classes that could be considered outside of compliance on the income side.

 

For everyday purposes of a family office that commingles revenue streams to benefit from oppurtunistic sets of circumstance (as they present themselves) this smells of a crime of opportunity.

 

dedicated, extremely specific, rigid liquidity requirements from a Hedge Fund or even more so for a Family Office..

 

a newborns Trust does not meet the requirements but is traded along with the Mother, Father and Grand Parents Trusts. So now Trusts out of the box will have to meet all income requirements / cash on hand?

 

As well FOF's will have to up their seeding to an extreme for any new hedgie to be competitive. No small entrance with testing before fully funding, OUCH! BITCHEZ!!

Sun, 06/19/2011 - 08:29 | 1382215 Urban Redneck
Urban Redneck's picture

The D-F full employment act for Trust lawyers.  I have always had a preference for corporations over trusts, and seem to have avoided a major headache as a result.  It never even figured into my calculations that the government might screw with qualifying asset levels for fund participation by a trust. 

Sat, 06/18/2011 - 17:33 | 1381069 mfoste1
mfoste1's picture

spot fx has already been exempted from the sanctions of this bill....

Sat, 06/18/2011 - 17:51 | 1381116 JW n FL
JW n FL's picture

can we get a link and language please?

I thought that Family Office's over / under where as well safe.. but? who knows, its not like I am going to read that war and peace binder!

Sat, 06/18/2011 - 17:54 | 1381133 ViewfromUnderth...
ViewfromUndertheBridge's picture

I love it.

Relevant sections of the Act are posted repeatedly, links are provided to explanations and still the majority of ZH posters get it wrong.

Really people, wtff!

Sat, 06/18/2011 - 18:29 | 1381196 slewie the pi-rat
slewie the pi-rat's picture

i claim allergy to boilerplate!  resulting in medically complete incomprehension!  you must have acquired some immunity.  or perhaps are an alien. 

Sat, 06/18/2011 - 20:40 | 1381422 jmc8888
jmc8888's picture

Another rule that won't apply to the individual big fish.  Not a surprise.

The bullshit/bearshit ratio of sophistry poll surely won't change based on this. Nor will it's effectiveness change. 

So I guess Benocide needs to just wait until at least july 16th to make his QE3 move.  Not that he won't wait until after it.  But gold/silver potentially much lower (excluding other factors like other central bank printing due to sovereign insolvency) and restrained ability to impact it going forward means to me that if Crackhawk Helicopter Ben was concerned about gold/silver price and it's potential run-up, he'd wait until at least after this date.  Assuming it is implemented on time.  Of course, this is vacuum speculation.

Sat, 06/18/2011 - 20:59 | 1381467 Everybodys All ...
Everybodys All American's picture

Is this rule only for Gold/Silver and if so why? I'm wondering why not any of the other commodities since they are so hell bent on controlling the price on everything.

Anyone no why in the hell they just didn't reinstitute Glass-Steagall.

Sat, 06/18/2011 - 23:09 | 1381741 gall batter
gall batter's picture

didn't you hear?  the bad players have been held accountable.  the bad players are gone.  no need for Glass-Steagall when the remaining bankers are honest. 

Sun, 06/19/2011 - 00:30 | 1381859 slewie the pi-rat
slewie the pi-rat's picture

what if they're under the bed?

Sun, 06/19/2011 - 07:27 | 1382168 gall batter
gall batter's picture

actually, they are in bed.  with the politicians.  

Sun, 06/19/2011 - 02:16 | 1381971 hungarianboy
hungarianboy's picture

This is crazy. 

Sun, 06/19/2011 - 06:26 | 1382118 Jack Napier
Jack Napier's picture

Class warfare. Make sure the more lucrative paper tiger is unavailable to the average US investor so they can go broke quicker. No matter, physical will outperform by leaps and bounds once the naked shorts get busted.

Sun, 06/19/2011 - 07:31 | 1382172 oldmanagain
oldmanagain's picture

From Jesse Cafe

"
As part of the reform of derivatives, Dodd-Frank is seeking to prohibit Over the Counter (meaning non-exchange) trading of commodities at leverage of greater than 10:1. 

The off exchange traders, particularly those trading in currencies, had expanded their markets into various commodities, offering non-product backed paper trading at very high rates of leverage.


The Congress and CFTC started taking a dim view of this sort of activity, and has tentative prohibited it as of July 15.

This does not curtail any on-exchange trading, such as the CME, or any ETFs, or any other product with a leverage of less than 10:1 or actually involving substantial physical backing or intended delivery of product within 28 days.

I have not quite gotten the time to assess the impact if any this might have on retail trading in forex itself. I have included a few forex related documents below. 

Sun, 06/19/2011 - 17:55 | 1383097 Xibalba
Xibalba's picture

What did you expect from a stooge and a faggot?

Sun, 06/19/2011 - 22:10 | 1383587 tradewithdave
tradewithdave's picture

QE, QE2, QE3?   No, it's time for QEP

http://tradewithdave.com/?p=7036

Dave Harrison

www.tradewithdave.com

Do NOT follow this link or you will be banned from the site!