Glencore Traders Urged Russia to Ban Grain Exports

Glencore made a speculative bet on rising wheat and corn prices in the early stages of last summer’s Russian drought, the world’s largest commodity trader has revealed ahead of its initial public offering that will value the company at $60 billion.

As it bet on rising prices, senior traders at the Swiss-based company publicly urged Russia to impose a grain export ban. Moscow acted a few days later, triggering a grain rally. Glencore is the largest trader in Russian wheat, followed by US-based rivals Cargill and Bunge [BG 73.72 http://media.cnbc.com/i/CNBC/CNBC_Images/componentbacks/watchlist_up.gif0.84 (+1.15%) http://media.cnbc.com/i/CNBC/CNBC_Images/backgrounds/realtime_icon.gif] .

The issue is sensitive because politicians such as Nicolas Sarkozy, French president have often blamed speculators for rising food prices. The G20 group of leading economies will hold a special meeting in June to discuss grain markets. Read more of this post

Public will pay for FTT, say EU groups

by Andrew Hickley

Two leading European financial industry associations have expressed concern over the possible introduction of a financial transaction tax.

In an open letter to the European Commission, the Luxembourg Bankers’ Association accuses the EU executive of wanting to indirectly tax ordinary citizens.

It says any tax on the financial sector would simply see insitutions increase their rates on consumers, adding: “raising direct taxes… would clearly be more transparent.”

The ABBL argues the tax is based on the “vague idea” of punishing the sector.

Continue reading here.

Derivative Regulation

The Grimm bill is one of many being considered right now. The bill that the Republicans on the Financial Services and Ag Committees in the House are getting behind at this time is the one that’s being sponsored by 4 congressmen, including Conaway (TX) and Garrett (NJ).

Rep. Grimm (R-NY) introduced H.R. 1610, the Business Risk Mitigation and Price Stabilization Act, an end-user exemption bill.  This bill exempts true derivatives end-users from having to post margin as required under Dodd-Frank. True end-users are firms and companies that use derivatives to manage their risks.  It will not apply to financial firms or firms that use derivatives for speculative purposes.  The Coalition is in strong support of this bill, and is working with companies and members of Congress to improve its chances of being passed.  For more information, please contact Jess Sharp (JSharp@uschamber.com or 202-463-5842) or Tom Quaadman (TQuaadman@uschamber.com or 202-463-5540).

Quarterly Economic Roundtable Series Invitation

Dear Members and Friends of CMC,

On behalf of CMC, we would like to invite you to attend a CMC co-sponsored event with the National Chamber Foundation (NCF).  The Quarterly Economic Roundtable Series with Martin Regalia, Ph.D., Chief Economist and Senior Vice President for the U.S. Chamber of Commerce, will be held on Tuesday, May 10th.  The second and third quarter briefings will be held on August 2, 2011 and November 8, 2011.

Dr. Regalia will deliver a keynote address based on GDP data released by the U.S. Department of Commerce from the previous quarter, before leading a panel of chief economists representing crucial sectors of the economy. The goal of these briefings will be to offer the business community better insight into the impact of policies on their industries as well as to offer solutions to potentially negative effects.

For the first event of the series, confirmed speakers include:

  • G. Mustafa Mohatarem, Ph.D., Chief Economist, General Motors Company
  • Stan Humphries, Ph.D., Chief Economist, Zillow.com

Event Details:

Registration is complimentary for CMC members.

Tuesday, May 10, 2011

Registration & Breakfast: 8:30 a.m. – 9:00 a.m.
Program: 9:00 a.m. – 11:00 a.m.

U.S. Chamber of Commerce
Washington, DC

Register here today.

EU reaches consensus on derivatives exemptions

By Riva Froymovich

(Updates with additional details on conflicts regarding legislation and which contracts will require clearance.)

BRUSSELS -(MarketWatch)- A consensus has emerged among the European Union’s 27 countries to exempt most companies and short-term foreign exchange instruments from clearing obligations for derivatives, according to a person familiar with the matter.

While the countries continue to debate other aspects of the closely watched legislation, which seeks to tighten oversight of derivatives trading, the latest draft proposals from the European Council lean toward allowing the exemptions. Previously there has been some uncertainty over the future of forex transactions in the over-the-counter market. Read more of this post

U.S. Team to Study Whether ‘Speculators’ Driving Up Pump Prices

The Obama administration is exploring whether rising oil and gasoline prices are being driven higher by illegal manipulation.

Representatives of the Justice Department, other federal agencies and state attorneys general will monitor for fraud, collusion or misrepresentation at the retail and wholesale level, the department said in a statement yesterday. The group also will examine the role of speculators and traders in oil futures markets.

“The attorney general’s putting together a team whose job it us to root out any cases of fraud or manipulation in the oil markets that might affect gas prices, and that includes the role of traders and speculators,” President Barack Obama said yesterday in Reno, Nevada. “We are going to make sure that no one is taking advantage of American consumers for their own short-term gain.” Read more of this post

Conventional wisdom inside the Washington, DC beltway is that Pres. Obama is likely to get re-elected in 2012

Conventional wisdom inside the Washington, DC beltway is that Pres. Obama is likely to get re-elected in 2012. These articles offer excellent food for thought on that subject.

Getting Real About Obama’s Chances, Part I

Getting Real About Obama’s Chances, Part II