Senators Carl Levin and Dianne Feinstein intend to close the "London loophole" by empowering the CFTC to impose speculative limits on US traders who use London exchanges. The move is aimed at helping to prevent price manipulation and excessive speculation in the oil market.
The senators’ aim goes one step further than the CFTC’s current investigation into the US crude oil market, which was announced on Thursday, by giving the American futures regulator the power to intervene in trading activities that occur outside its own legal jurisdiction.
Both politicians are keen to reduce the amount of speculative energy trading, which they believe pushes up the price of crude oil, and so petrol prices, unfairly hurting their constituents.
They are of course perfectly at liberty to impose restraints on trades by those in the US. It won’t have much effect for if it is seen as a burden by said traders then they’ll simply open a desk in London or Zurich.
But the real fuckwittery comes from the attempt to curb speculation. Speculators smooth out prices over time….they move shortages and gluts and the associated price rises and falls intertemporally, something that we all rather desire should happen.
But then they are indeed politicians so perhaps we shouldn’t expect them to understand anything about the real world.