Spotlight on Goldman as commodities hearings begin

Market Watch ^ | 7/28/09

[FromLori]

Goldman Sachs Group Inc., under fire for reaping record trading profits in the teeth of the financial crisis, is now fighting to defend one of its major sources of revenue -- commodities trading -- as regulators consider setting limits on Wall Street speculators.

Goldman and other big investment firms are scheduled to appear at a series of hearings held by the Commodity Futures Trade Committee starting Tuesday, as the Obama administration launches its biggest move yet to clamp down on commodities speculation, which has roiled prices from oil to corn and wheat in recent years.

At issue for the investment bank is a major exemption it enjoys from limits on trading of certain types of agricultural commodities. Such an exemption is usually reserved for traders classified as "hedgers," such as farmers or food producers that depend on stable prices for their businesses.

Goldman opened the door for investment banks to apply for similar status when it won the first exemption 18 years ago to help its big institutional clients in commodity index trading, or investment in a range of commodities by tracking a major index.

The result, according to some members of Congress, has been a surge in all commodities speculation in the last few years, pushing oil prices near $150 a barrel and gold prices over $1,000 an ounce.

[freekitty]

Does anyone really believe the Obama administration is going to slap silly Goldman Sachs?

[jveritas]

No.

[FromLori]

I sure hope not they own the smelly one

[Vaduz]

At issue for the investment bank is a major exemption it enjoys from limits on trading of certain types of agricultural commodities. No word from Obama why not??.

[FromLori]

No but I think I have a clue.

http://www.noquarterusa.net/blog/2008/09/21/baracks-wall-street-problem-is-now-americas/