Streetwise Professor

February 18, 2013

Bart Chilton Tries to Resurrect Position Limits, With the Same Lack of Intellectual Rigor and Honesty We Have Come to Expect

Filed under: Commodities,Derivatives,Economics,Energy,Politics,Regulation — The Professor @ 8:22 pm

Gensler and Chilton are taking up the cudgels again for position limits-this in spite of the spanking from Judge Wilkens last year.

Chilton, as usual, is most outspoken on this issue:

Today, energy costs for most families have risen more than 20 percent since 2001. This hurts not only American households, but also American business—like many of your businesses—that rely on energy. According to the Energy Information Administration (EIA), nearly nine percent of our economy or $1.4 trillion is spent on energy annually. Imagine if that figure dropped by just ten percent—$140 billion freed up for investment and economic growth.

So that’s why I continue to lead the charge for position limits—to help keep the markets working for you. The efforts to stop position limits will ultimately fail. Congress told us in no uncertain terms to get it done, and I intend to see that we do that, before more families and businesses go into the “red” column on their balance sheets.

First of all, 20 percent in 13 years is less than 2 percent per year-that is, less than the rate of inflation: the CPI is up almost 30 percent over those 20 years, meaning that the real price of energy has fallen.   I say again: the real price of energy-per Chilton’s own numbers-have fallen.

I also note Chilton’s continued focus on the rise in oil prices, and his complete refusal to acknowledge the collapse of natural gas prices precisely during the period in which his Massive Passive bogeymen have allegedly driven commodity prices generally, and energy prices particularly, far above what they “should” be.   If “speculation” by “massive passives” (or whoever) can cause prices to become completely unhinged from fundamentals, why has natural gas moved in the exact opposite direction from oil?

Chilton’s egregious errors of omission and commission must be caused either by a lack of intellectual capacity, or a lack of intellectual honesty.  I really see no other alternative.

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  1. Bart Chilton isn’t a brainiac. He doesn’t understand the first thing about markets, or transparency. He is simply a bureaucrat.

    Comment by Jeff — February 19, 2013 @ 8:01 am

  2. […] not the speculators.  Speculators can’t influence a market.  Despite the protestations of people who totally misunderstand why markets exist, the market reacts to information and allocates […]

    Pingback by What Should We Do About Higher Gas Prices? - Points and Figures | Points and Figures — February 19, 2013 @ 8:25 am

  3. […] See full story on […]

    Pingback by Bart Chilton Tries to Resurrect Position Limits | Fifth Estate — February 19, 2013 @ 9:10 am

  4. No he is not a bueaucrat, he is a VERY effctive politician. It is not the truth that counts but what he can make people believe – it is all about impressions and ultimately an appeal to emotions – see The Rhetoric for many examples.

    In the current scheme of things this is a a ploy – what the magicians would call misdirection. As long as someone can be blamed (the “Other”), there is no attention paid to crappy monetary policy, environmental regs, fiscal policy orthe lack thereof, etc. It is a fiction to keep the Obamabots’ belief system intact.

    What we are seing here is the greatest 3 card Monte player of all time in action.

    Comment by Sotos — February 19, 2013 @ 9:55 am

  5. Where would oil/ gasoline prices be if we could build the keystone pipeline?

    Comment by Chris — February 19, 2013 @ 9:10 pm

  6. That “Red” link for Chilton made me a a bit ill upon reading, but further made me wonder, what’s this guy know that I don’t know?

    After high school, Chilton worked at a steel mill for a year. The experience convinced him that someone had to look out for “the little guy”. He began attending Purdue University in 1979, majoring in political science and communications but left one semester before graduating to work on Democratic Party 1984 political campaigns.

    His father, a mechanical engineer, patented a way to create a self-standing artificial Christmas tree.

    I am still wondering.

    Comment by Macondo — February 19, 2013 @ 10:02 pm

  7. @Macondo-even if you don’t know a lot, he probably knows less than you. What’s worse, he thinks he does know a lot.

    The ProfessorComment by The Professor — February 19, 2013 @ 10:19 pm

  8. Presumably he’d argue that the massive passives are long oil, but not gas?

    Do you think he gets that for every long, there is a short? I am not 100% sure he does get this.

    Comment by Green as Grass — February 21, 2013 @ 8:00 am

  9. Dear Green – he doen’t know or care. Facts, after all can not be allowed to get in the way of a self serving argument.

    This is the sophisticated European form of knowlege that the sophisticates love:

    Amercian ignorance: ” I don’t know”

    European Ignorance: ” I don’t know I don’t know, if i don’t know it it isn’t important, and I don’t care because it is impossible that I can’t know someithing.”

    I know it is wrong to damn the “intellectuals” of an entire continent in such a one sided way, but it is so close to my relatives’ and their friends’ attitudes I really feel that it fits more than it doesn’t.

    Comment by Sotos — February 21, 2013 @ 9:12 am

  10. @Green. I’m not sure either. Moreover, the massive passives he refers to are index investors, and they are long gas as well as oil.

    @Sotos. And it is no wonder they love Obama so much. That’s him to a “T”.

    The ProfessorComment by The Professor — February 21, 2013 @ 1:21 pm

  11. Question, Professor:

    Where can one find the best graph or chart of natural gas prices over the timeframe most affected by fracking?


    Comment by Vlad — February 21, 2013 @ 10:27 pm

  12. @Vlad. Many choices. Here are a couple. From CME Group. From the EIA. The EIA site includes a link to an Excel file with all the data, so you can generate your own graphs to your heart’s content.

    The ProfessorComment by The Professor — February 21, 2013 @ 11:04 pm

  13. […] Pirrong was highly critical of the CFTC’s original position limit proposal and Chilton’s advocacy of it. […]

    Pingback by Bart Chilton to Leave CFTC: Good Riddance | Dan Collins Report — November 20, 2013 @ 8:46 pm

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