Source: https://www.tfmetalsreport.com/blog/4228/weekend-assignment?page=6%2C1
Timestamp: 2019-08-22 02:28:50
Document Index: 201489043

Matched Legal Cases: ['art 1', 'art 2', '§ 6', '§ 19', '§ 6', '§ 6', '§ 19']

Sat, Sep 29, 2012 - 12:02pm
You may recall that, last month, I recorded a podcast with David McAlvany of McAlvany Financial. Here's a link in case you missed it: https://www.tfmetalsreport.com/podcast/4131/tfmr-podcast-26-david-mcalva.... I had met David earlier this summer at FreedomFest and had come away impressed. Here was a guy...an actual investment advisor...who seemed to "get it".
The Fuse is Lit | European Perils | Part 1
The Fuse Is Lit Part 2 Asian Ascendance
https://www.reuters.com/article/2012/09/28/us-cftc-positionlimits-idUSBRE88R1C120120928
Sep 30, 2012 - 12:35am
CFTC Lawsuit re Position Limits - My Take
Per the Court: No Position Limits Rule. CFTC ordered to re think its rulemaking in light of the Court's determination that CFTC violated its rulemaking authority. Case remanded (sent back) to the CFTC for proceedings "consistent" with the Court's opinion (meaning that the CFTC dumbasses will have to revisit the whole process again.
My take: don't count on ANY position limits, ever. Anyone not stacking by now? If not, don't come crying when the paper vanishes and all that is left is physical metal.
Below in quoted text, is the Introduction section from the Complaint filed in the DC Federal District Court. I have read the the Court's full opinion that came out on Sep. 28, 2012. My analysis is from this Opinion and a brief review of the Amicus Briefs and the Plaintiffs' Complaint.
As a precursor, I have no doubt that the ruling's outcome (Position Limits Rule struck down) was leaked early on, and would tend, in my mind, to explain the massive piling on of new shorts. I am expecting a nice bunch of new naked shorts to flood the market on Monday, so for you gamblers out there, good luck! For stackers, BTFD.
Anyhow, back to the legal stuff.
The plaintiffs, the ISDA and the SIFMA, filed suit asking the Court to "hold unlawful and set aside the Position Limits Rule in its entirety; enjoin the Commission from implementing and enforcing the Rule or giving it effect in any manner; and order such other relief as may be appropriate."
The Introduction section, if you want to read it yourself, is set out below. I did not include all 32 pages from the opinion, because it is dry legal stuff. If you want to look for yourself, go on PACER and look up case number 1:11-cv-2146 (RLW), the docket is there, and you can pull up each document you want to look at.
The bottom line is pretty straightforward. The CFTC implemented a "Position Limits Rule" in response to the Dodd-Frank Wall Street Reform and Consumer Protection Act "Pub. L. No. 111-203, 124 Stat. 1376 (2010)." The Wall Street insiders, did not like the Rule, and asked the Court to set the Rule aside, claiming that the CFTC was not mandated by Dodd-Frank to impose new position limits. CFTC said it was "required" to "establish position limits."
The Federal judge basically agreed with the Plaintiffs (there were five technical legal challenges to the law, summarized below), finding that the CFTC misinterpreted the Dodd-Frank law. The Judge ruled:
In sum, although each party believes the statute is clear and unambiguous, their respective “plain readings” compel different results. ​Ultimately, however, this Court need not choose between the competing interpretations. As explained below, Section 6a is ambiguous as to the precise question at issue: whether the CFTC is required to find that position limits are necessary and appropriate prior to imposing them. Because the Position Limits Rule is based on the CFTC’s erroneous conclusion that the CEA is unambiguous on this issue, the Court “may neither defer to the agency’s construction nor endorse plaintiffs’ construction.” See Humane Soc’y of U.S. v. Kempthorne, 579 F. Supp. 2d 7, 15 (D.D.C. 2008). Instead, the Court must remand this rule to the agency.
So, the Judge struck the rule down (vacatur) and kicked the problem back to the CFTC to deal with, consistent with the Judge believing that there are ambiguities to fix before the CFTC can issue any sort of position limits rule. I am not going to get into the technicalities of the ambiguities, since I am not an expert on this nor do I really care what that corrupt bunch of DC insiders do or say.
Speaking of the corruption, look at what those idiots said in the run up to implementing the Rule! Read this, and ask yourself whether there is any sort of "free market" with regard to paper trading. If you think this market is "free" or "fair," think again.
Commissioners Dunn, Sommers and O'Malia were a key part of the problem, because before implementing the Rule, they said:
At an open meeting on January 13, 2011 prior to the issuance of the NPRM, Commissioner Michael V. Dunn stated that, “to date CFTC staff has been unable to find any reliable economic analysis to support either the contention that excessive speculation is affecting the market we regulate or that position limits will prevent excessive speculation.” Transcript of Open Meeting on the Ninth Series of Proposed Rulemakings Under the Dodd-Frank Act at 9 (Jan. 13, 2011). Dunn also shared his “fear” that “at best position limits are a cure for a disease that does not exist, or at worst it’s a placebo for one that does.” Id. Commissioners Jill Sommers and Scott D. O’Malia also expressed fundamental concerns with the position limits proposal before the agency.
Dunn also said this:
Dunn stated that “no one has presented this agency any reliable economic analysis to support either the contention that excessive speculation is affecting the market we regulate or that position limits will prevent the excessive speculation.” Transcript of Open Meeting on Two Final Rule Proposals Under the Dodd-Frank Act (hereinafter “10/18/11 Tr. at __”) at 13 (Oct. 18, 2011). Dunn expressed his opinion that “position limits may harm the very markets we’re intending to protect.” Id. at 14. Despite the fact that his opinion on position limits still “ha[d] not changed,” Dunn voted in favor of the Rule because he believed Congress had required the Commission to impose position limits: Position limits are, in my opinion, a sideshow that has unnecessarily diverted human and fiscal resources away from actions to prevent another financial crisis. To be clear, no one has proven that the looming specter of excessive speculation in the futures market re-regulated even exist, let alone played any role whatsoever in the financial crisis of 2008. Even so, Congress has tasked the CFTC with preventing excessive speculation by imposing position limits. This is the law. The law is clear, and I will follow the law. 10/18/11 Tr. at 11, 13 (emphasis added).
So, clearly, Dunn expressed great skepticism regarding position limits, but reluctantly voted to uphold them, because Dunn felt constrained by Dodd-Frank that position limits were mandatory. The other suspects felt the same way:
Commissioner Gensler supported Commissioner Dunn’s view, stating that by “the Dodd- Frank Act, Congress mandated that the CFTC set aggregate position limits for certain physical commodity derivatives.” 76 Fed. Reg. at 71,626, 71,699. The final rule reflected the Commission’s view that it was compelled to produce a certain result: “Congress did not give the Commission a choice. Congress directed the Commission to impose position limits and to do so expeditiously.” 76 Fed. Reg. at 71,628 (emphasis added). Commissioners Sommers and O’Malia voted against the final rule and published written dissents. Sommers claimed that, while she was not philosophically opposed to position limits, she did “not believe position limits will control prices or market volatility” in this market. 76 Fed. Reg. at 71,699. Sommers claimed that the rule would inflict the greatest harm on bona fide hedgers and “ironically” may “result in increased food and energy costs for consumers.” Id. Sommers claimed that, in her view, the Commission had “chosen to go way beyond what is in the statute and have created a very complicated regulation that has the potential to irreparably harm these vital markets.” 76 Fed. Reg. at 71,700. By enacting the Rule, she believed that “[the CFTC] is setting itself up for an enormous failure.” 76 Fed. Reg. at 71,699.
* There were FIVE technical legal challenges to the Rule:
Plaintiffs assert the following claims against the CFTC based on the Position Limits Rule: 1) Count One: Violation of the CEA and APA—Failure to Determine the Rule to be Necessary and Appropriate under 7 U.S.C. § 6a(a)(1), (a)(2)(A), (a)(5)(A)); 2) Count Two: Violation of the CEA—Insufficient Evaluation of Costs and Benefits under 7 U.S.C. § 19(a); 3) Count Three: Violation of the APA—Arbitrary and Capricious Agency Action in Promulgating the Position Limits Rule; 4) Count Four: Violation of the APA—Arbitrary and Capricious Agency Action in Establishing Specific Position Limits and Adopting Related Requirements and Restrictions; 5) Count Five: Violation of the APA—Failure to Provide Interested Persons A Sufficient Opportunity to Meaningfully Participate in the Rulemaking; and 6) Count Six: Claim for Injunctive Relief.
[Cut and pasted from the original complaint, ocr from a pdf doc. And no, I am not going to take my time and edit it up all nice and pretty, you can do it yourself]: "COMPLAINT
--- Plaintiffs INTERN A TIONAL SWAPS AND DERIVATIVES ASSOCIATION and SECURITIES INDUSTRY AND FINANCIAL MARKETS ASSOCIATION for their complaint against Defendant, UNITED STATES COMMODITY FUTURES TRADING COMMISSION, allege, by and through their attorneys, on knowledge as to Plaintiffs, and on information and belief as to all other matters, as follows: I. INTRODUCTION 1. This is a lawsuit under the Administrative Procedure Act challenging a rule recently promulgated by the U.S. Commodity Futures Trading Commission ("CFTC" or "Commission"). In a closely divided 3-2 vote, in which dissenting commissioners and numerous members of the public expressed significant concerns, the Commission promulgated a rule setting hard position limits on derivatives contracts tied to twenty-eight different commoditiesa rule ostensibly designed to curb "excessive speculation." See 76 Fed. Reg. 71,626 (Nov. 18, 2011) ("Position Limits Rule" or "Rule"). Such limits will constrain activity in markets that have long been recognized as providing important benefits to market participants and the broader economy. 2. One of the three commissioners who voted infavor of the Position Limits Rule concluded that "no one has presented this agency any reliable economic analysis to support either the contention that excessive speculation is affecting the market we regulate or that position limits will prevent the excessive speculation." Tr. of Open Meeting on Two Final Rule Proposals Under the Dodd-Frank Act (Oct. 18,2011) ("Oct. 18 Tr."), at 13. He believed that "position limits, at best a cure for a disease that does not exist, are a placebo for one that does," and that "[a]t worst, position limits may harm the very markets we're intending to protect." ld. at 14. "Position limits," he predicted, "may actually lead to higher prices for commodities that we consume on a daily basis." ld. at 13. He voted for the Position Limits Rule only because he believed-mistakenly-that a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (July 21, 2010) ("Dodd-Frank Act"), required the establishment of position limits irrespective of their necessity or wisdom. 3. That Commissioner's troubling account of the utter lack of support for the Position Limits Rule is confirmed by the Commission's analysis. Its rule release expressly 2 Case 1:11-cv-02146-RLW Document 1 Filed 12/02/11 Page 3 of 33 declined to analyze whether excessive speculation in commodity derivatives is a real problem or whether position limits would help address it-or even whether position limits would harm U.S. businesses and consumers by causing more volatility in commodity markets and driving up the price of goods. See 76 Fed. Reg. at 71,627. The Commission instead mistakenly maintained that it was required to establish position limits without regard to their necessity, effectiveness, or even potential harm to U.S. markets, investors, and consumers-that "Congress did not give the Commission a choice." ld. at 71 ,628. 4. Because of that interpretation, the Commission expressly stated that it was ignoring "a number of studies and reports addressing the issue of whether position limits are effective or necessary to address excessive speculation." 76 Fed. Reg. at 71,629 n.32. In the Commission's view, because it lacked discretion to decline to impose position limits, "these studies and reports [did] not present facts or analyses that [were] material." ld. 5. The Commission grossly misinterpreted its statutory authority. Congress did not require the Commission to establish position limits without regard to whether they would harm the U.S. economy by increasing the cost of food, energy, and other necessities. Rather, Congress authorized the Commission to establish position limits only if it first finds that they "are necessary to diminish, eliminate, or prevent" "an undue and unnecessary burden on interstate commerce" caused by "[e]xcessive speculation" (7 U.S.C. § 6a(a)(1)), and are otherwise "appropriate" (id. § 6a(a)(2)(A), (a)(5)(A)). The Commission did not make those findings here. Such an abdication of the Commission's responsibility to apply its expertise to record evidence before establishing new regulations is the essence of unreasoned decisionrnaking. 6. Moreover, even ifthe Commission were required to impose position limits at some level, it acted arbitrarily, capriciously, and contrary to law by failing to support the specific 3 Case 1:11-cv-02146-RLW Document 1 Filed 12/02/11 Page 4 of 33 limits set and related provisions with sufficient evidence, ignoring contrary evidence in the record, and insufficiently apprising members of the public of the basis for the proposed rule. 7. The Commission also failed to give serious consideration to the significant costs that the Position Limits Rule will impose on commodity markets and the broader economy, which the Commission is required to do by statute. See 7 U.S.C. § 19(a). As mentioned by numerous commenters to the Commission's initial proposal, the Position Limits Rule will, among other things, make it more difficult for market participants to manage risk and impair the efficiency of markets in establishing commodity prices (referred to as "price discovery"). In particular, the unnecessarily narrow definition of bona fide hedging transactions and positions potentially will limit the ability of market participants to enter into transactions with counterparties needing to hedge risks or establish investment positions. Moreover, the Rule, including but not limited to its aggregation requirements, will require market participants to incur substantial costs in redesigning their trading strategies and building new infrastructure to comply, including unprecedented information-sharing mechanisms that may violate fiduciary duties and may be prohibited by contract, state law, or the law of a foreign jurisdiction. Rather than making a genuine effort to estimate those costs, the Commission cited its own failure to obtain empirical data that would enable it to assess the impact of the Position Limits Rule and acknowledged in its findings that the Rule was justified only "to the extent" that it would achieve its intended objectives. 8. As one of the dissenting commissioners observed, the Commission's arbitrary, unsupported reasoning has had the effect of "passing our responsibilities on to the judicial system to pick apart this rule in a multitude of legal challenges." 76 Fed. Reg. at 71,706. That unfortunate fact necessitates this Court's intervention. Plaintiffs accordingly request that this 4 Case 1:11-cv-02146-RLW Document 1 Filed 12/02/11 Page 5 of 33 Court hold unlawful and set aside the Position Limits Rule in its entirety; enjoin the Commission from implementing and enforcing the Rule or giving it effect in any manner; and order such other relief as may be appropriate.
Sep 30, 2012 - 12:45am
Dawg!! ROTFLOL
Sep 30, 2012 - 12:46am
Santa's EO list
I saw that list a few days ago. The info is bogus.
The EO list from UCSB:
FDR tops the list. No wonder Congress passed Presidential term limits right after he died.
https://urbanlegends.about.com/gi/o.htm?zi=1/XJ&zTi=1&sdn=urbanlegends&c...
Sep 30, 2012 - 12:50am
re: Katie / bartering
39 hat tips and counting... seriously? If we get to the point where people are bartering those desperate addicts are going to kill you in anger because you DON'T have any alcohol on the premises. Folks, at the bartering stage, start thinking darker thoughts. I'm already getting knocks on my door from people down on their luck and asking for handouts. This is in Bellevue, WA where the economy is fairly good (Microsoft, Amazon, Starbucks, Expedia, Nordstrom, PACCAR, etc). There are alot of Turdites with good hearts, but you're going to need to harden them if we get to bartering USA. Personally, I am well stocked with rum and vodka, and I plan on bartering at neutral sites, not out of my well defended home.
Sep 30, 2012 - 12:52am
Try walking through downtown Seattle or exiting at anywhere on I-5, panhandlers and down and outs. It's really sad, I have a bag of groceries in my car just in case I see them.
Clubfoolish Maryann
Sep 30, 2012 - 12:55am
Santa seems off by orders of magnitude...
Santa states executive order quantities for those Presidents whole terms, but he states low numbers by orders of magnitude for every Prez, except for Obama, where his number is way high. He should stick to PM facts and not dip into the realm of politics, apparently.
Wonder why he is so wrong in such a consistent way (except for Obama)? Wonder why you simply believed it, since that list is ridiculous even taken at face value?
Click below, the official Federal Record, and click on the name of each Prez going back to FDR...see the total # of EO issued near the bottom of each list of years served. Read any or all of the EOs.
In fact, the number Santa states for Reagan, 5, is correct, but only if one looks at ONLY Reagan's final month, the 3 weeks served in Jan 1989 (when he was already obviously senile). He signed 5 EOs in just those 3 weeks, but signed a total of 381 during his 2 terms. Santa is off by a mere 376 out of 381 for Reagan. What is his % error?
FDR signed 3,728 in his 12 yrs.
Don't believe everything you read on the internet...even this post...go check for yourself before forming opinions. When you're done reading real information, you can start breathing again (and maybe begin acquiring an informed opinion).
Btw, thusfar, Obama has signed only 135 EOs...at that rate, he will be low man on the EO signing totem pole by the time his 2nd term ends. I just skimmed all of the ones he has signed for 2012 thusfar...interesting, but certainly none that might be disturbing to me; and I'll bet the same holds for you, MaryAnn.
Dawg Clubfoolish
Sep 30, 2012 - 1:07am
"Btw, thusfar, Obama has signed only 135 EOs...at that rate, he will be low man on the EO signing totem pole".
More importantly, who's E.O.'s have been the most costly? Bet you will find it is "The Bamster"!
Sep 30, 2012 - 1:13am
And there are the beggars that refuse the food and tell you they want money. Pfftttt.
Sep 30, 2012 - 1:15am
both videos were absolutely spot on! My thanks to David McAlvany and also to Turd for making them available here.
Sep 30, 2012 - 1:18am
US not China becoming Japan
In the video about Asia, it is suggested that China is going to become like Japan. I beg to differ on this and suggest instead that it is the US which is in more danger of becoming Japan. I say this because it is extremely unlikely that spending will be controlled any time soon, no matter who gets elected, so debt as a ratio to GDP will continue to increase. The US is also following the Japanese model of socialisation of private sector losses and zombie banks with officially sanctioned inadequate accounting standards. Also Japan invented ZIRP and QE to infinity.
In contrast, China is sitting on $3 Trillion of reserves, which it can and will deploy to soften the transition from an export driven economy to one based more on domestic consumption. There are 1.6 Billion Chinese so as the middle class begins to grow, that represents enormous latent potential for growth..
Oh, and China doesn't have to worry about the Muppets in Congress and the Corporatocracy to get sensible things which benefit the Country and people not the former done quickly.