When a poker player has a weak hand, he needs to play a blinder to win. And that’s what CME Group has tried to do with its position paper on Excess Speculation and Position Limits in Energy Derivatives Markets.
The exchange has wheeled out all the arguments it can and cranked up the eloquence to fight its case: that in energy markets, the more speculation there is, the better for all concerned.
But CME knows it is late in the game. An awful lot of words have been expended trying to persuade Gary Gensler, CFTC chairman, of that view, and he doesn’t look convinced. Key people in the Congressional committees have also not been won over.
So it is time for Plan B. Position limits are coming for energy derivatives, so let’s make them as painless as possible. And while we’re at it, let’s make sure those shady...