Senate bill would force CFTC to act on position limits

Section:

By Christopher Doering
Reuters
Thursday, June 2, 2011

http://www.reuters.com/article/2011/06/02/financial-regulation-cftc-cong...

WASHINGTON -- An outspoken U.S. senator who criticized the country's futures regulator for failing to crackdown on energy speculation said on Thursday he will introduce legislation next week that will force the agency to act.

Senator Bernie Sanders said the legislation would force the head of the U.S. Commodity Futures Trading Commission to use emergency authority to impose limits on the positions investors can take in crude oil, gasoline and heating oil. The move could occur without support from the majority of the agency's commissioners.

The bill also would raise margin requirements in the markets and force big Wall Street houses to live within prescribed limits.

... Dispatch continues beow ...



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Lewis E. Lehrman on How to Solve the U.S. Debt Problem

Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, advises that to reduce the $1 1/2 trillion U.S. deficit, the Republican Party must initiate an investment program.

Working Americans are not saving, which enables the banks to lead the country into a cycle of debt, leverage, boom, panic, and bust.

Lehrman says: "Eliminating the budget deficit of a trillion and a half dollars cannot be done overnight. The proposal by U.S. Rep. Paul Ryan was very dramatic -- one Republican called it radical -- but it was not happily received. The solution, of course, is to design an American program for prosperity, because you can solve these entitlement problems with a growing economy.

"We need a tremendous program of investment, and investment comes from savings. When you pay savers, middle-income professionals and working people, 0 percent at the bank, you are not going to encourage them
to save. Then we are left with a bank cycle of debt, leverage, boom, panic, and bust."

To read more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit:

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"We cannot allow Wall Street speculators to continue to rip off the American people at the gas pump any longer," said Sanders, an Independent from Vermont.

U.S. lawmakers have turned up the heat on the CFTC to curb oil speculation by imposing position limits on the number of contracts big market players can hold in oil and other commodities.

Efforts to impose position limits have come as oil prices hover near $100 a barrel and consumers pay nearly $4 a gallon for gasoline to fill up their automobiles.

President Barack Obama has blamed speculators for driving gasoline prices higher, saying there was enough oil in world markets to meet demand. The administration created a working group of federal agencies to probe potential fraud in the energy markets.

Sanders said the CFTC violated the law when it failed to impose position limits on energy and other commodities by January, as required under the Dodd-Frank financial reform law.

The Sanders legislation, which was still being drafted, would increase margin requirements for speculative trading in crude oil and heating oil to 25 percent.

In addition, it would end all bona-fide hedging exemptions for bank holding companies including any of their affiliates and subsidiaries, such as Goldman Sachs, Morgan Stanley (MS.N), JP Morgan Chase, Citigroup, Bank of America, and Credit Suisse.

Gary Gensler, the CFTC chairman, has not said when the agency would finalize position limits rules.

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

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 reducing liquidity.

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Prophecy Resource (TSXV:PCY) and Pacific Coast Nickel (TSXV:NKL)
Begin 8,000-Meter Drilling Program Wellgreen Project

Company Press Release, June 2, 2011

VANCOUVER, British Columbia -- Prophecy Resource Corp. TSX-V:PCY, OTC-QX: PRPCF, Frankfurt: 1P2) and Pacific Coast Nickel Corp. (TSX-V: NKL, US-PINK: PNIKF, Frankfurt: P94) have begun an expansion drilling program on their Wellgreen platinum, nickel, and copper project in the Yukon Territory, Canada. The program has been commenced by Prophecy and will be completed by Pacific Coast Nickel upon completion of the arrangement transaction whereby Pacific Coast Nickel will acquire the Lynn Lake and Wellgreen properties from Prophecy.

The program includes 8,000 meters of solid-core diamond drilling from through September with up to three drills to test at least 17 infill and exploration targets. This drilling will augment the existing resource which is being updated to National Instrument 43-101 standards by Wardrop Engineering, a Tetra-tech company. The resource estimate (based on 701 drillings before 2011) is expected to be released in July. The 2011 drilling is aimed to further augment the
resource estimate.

The grades and type of disseminated mineralization at Wellgreen are highly analogous to those observed in Minnesota's Duluth Complex.

For the complete company statement, please visit:

http://www.prophecycoal.com/news_2011_jun02_Prophecy_Commence_8000_Wellg...