and number two, what exactly is the cftc asking of you? are they actually conducting an investigation? are you being interviewed? tell us what's going on. >> well, bob, the genesis is last year's run-up in energy prices, i think. obviously, you had price rise a great deal, and then they subsequently fell. but in that you have people looking for somebody to be the fall guy, somebody's got to be to blame, trugs traditionally wd blame opec or oil companies, for some reason, maybe because of some lieutenant lunatic fringe economic sphere, people decided to blame passive commodity index funds in general and to a degree the commodity etfs, that somehow we were the responsible party. unfortunately, of course, the data suggests the actual opposite is true. the big oil etfs were sellers as prices were rising, not buyers. be that as it may, the cftc is out looking for somebody to lay the blame on. they're talking to the etf providers and they're talking about put limits on the amount of contracts that can be held by financial investors. obviously th

just a moment to go, we heard from cftc chairman gary ginsler on regulation.mission first said it was considering limits. since then, shares of the cme group have declined more than 9%. this is somewhat of a concern as increased regulation could drive trades overspaepz we get the reaction from terry duffy, executive chairman of the cme group. >> i appreciate being here your. >> reaction to the commissioner's, the chairman's comments earlier. >> i was surprised when i saw the chairman here. i was going to say the only thing we have in common is red ties today. maybe we have a little difference of opinion. chairman againstler has done a really good job and we may have a lot more in common than one would think. we're looking forward to working with him and the rest of the commissioners to bring results to the market that the public deserves. >> what would you like to see different than what's on the table right now? >> i think it's important to know, maria, when we're talking about position limits especially as the energy complex, we have not seen excessive specu

and we applaud the cftc for pursuing this. >> scott, what do you think? >> well, i think it's really hard to just pinpoint etfs, especially the ung, the u.s. natural gas. this is actually probably a very poorly structured fund. it's not united states natural gas spot price etfs. it's the united states natural gas rolling one-month futures contract etf. you know, in fact, it's hard to say that this fund in particular's been pushing up prices when in fact year to date it's down 40% in its return. and the assets inside etfs are also very murky because shorting an etf actually creates asset size growth. so we have -- it's hard to say you've had a fund that's grown $4 billion in assets over the past four months, and yet the price hasn't gone anywhere. that actually means there's probably a lot of people and they're shorting, which is good, it keeptz prices down. and i do think it's very hard for people using -- looking to hedge physical exposure to these commodities to not want speculators. they go hand in hand. you have to have speculation to help with the he

but let's hope that the cftc does something rationally fairly soon. thanks for joining us.very much. and we are in the home stretch here, just about seven minutes before the closing bell sounds on wall street. that's ten minutes. and we've got the market higher off the best levels of the afternoon. still up almost 160 points or so. the market climbing in spite of mixed economic news. is it time for investors to be playing it safe or should you still get in at these levels at 9503 on the dow? we'll tell you why you should be thinking about cashing in, at least some markets when we come right back. stay with us. with the dow up 1 2/3%. you're watching "the closing bell." well, do they know this malibu offers an epa estimated 33 mpg highway? they never heard that. which is better than a comparable toyota camry or honda accord? they're stunned. they can't believe it. they need a minute. i had a feeling they would. there's never been more reasons to look at chevy. >>> welcome back. we count down to the close here, and as we do so let's take a look at how the market is performing

le cftc holding a hearing. last week that kind of coincided with lows and put pressure on the markets. >> what they want to do is limit the side of the speculative contract side. that's definitely a bearish signal for our market. that's why last week we saw a huge sell-off, then the talks stalled for a while and saw the buying come back in. >> along that commentary. thank you, mark, so much for joining us. we saw a build here in crude. >>> back to mark and erin. >> let's look at the market and its internals. the dow down 1%, 1% loss on the nasdaq, and 1% loss on the s&p, so we probably have quite a skew to the loser and the advance decline data. and on the nasdaq, a little more than 2.5 to 1 on the decline side. >> mike masters is testifying today on limiting in markets and the role of speculation in the dramatic spike in particular we saw last summer. our guest now says that banning speculators is a mistake and would result in higher energy prices. micha michael, i wanted to start off with a sound bite from mi

and as for the cftc and the failure to regulate credit default swaps in particular which really helpedin some way to allow for the creation of an enormous marketplace and call our eyes that obligation that i notice is all getting propagated and it gets even more competent in the sense that ceos which were made in credit default swaps on mortgage-backed security to. in 2000, it could have been regulated. it was not. phil gramm, a writer on the omnibus budget bill for that year, the election was over. it was after bush had one already, but what sort of duck congress. nobody knew what was in the bill. he completely deregulated everybody. in terms of credit default swaps pic he claims no, i didn't. i dissent that they should be considered an inrance product. there's debate about it. but the fact is that dcf tc, especially under, iorget her name, want to regulate credit default swaps. it never happened. and look, the figures go way back. in 1996 we repealed last eagle. under the clinton administration. part of the urging of sand sandy weill so he could get his deal done and combined with tr

the cftc might come out with. i think as the moment as the regulators try to grapple with how to define some of these forces in the financial markets there is more uncertainty and maybe in the short term maybe more people trying to take profits. >> with less speculators in the market, if there are, will there be less liquidity? will prices be more volatile or also volatile? >> there's definitely a risk of reduced liquidity. i think it's not clear -- i think in the short term there might be more volatility. we're in the summer now. that tends to be a time of more -- of more volatility because of lower volume. but as john said, i think the jury is still out on how this will affect. but i think in the longer term it might mean less volatile swings. >> let's go back to fundamentals, john. you also think the fundamentals have gotten ahead of the prices here. why is that? what's bringing prices ahead of fundamentals? >> you look at copper, for instance. you just mentioned copper's up about 95% year to date. look at a co

the trading commission, cftc today is holding the last he three hearings on energy speculation, they are considering putting caps on futures contract investor kz buy in the energy area. the idea is to limit they may have, they are also buyers of energy future soz we have a problem here with the energy etfs. it sounds like the demand for etf is increasing the commodity prices. most other people say there isn't any correlation between prices and etf demand. there's a real issue for the people that own commodity etfs. there could be caps on them that would impede the growth and accessibility to commodities, look how successful they have been. there's a tracking error issue as well. that's our etf 101 for the week. >> we'll continue to follow not only that etf story but the story about commodities in general. is warren buffett making money on the back of taxpayers? >> it's a question circulating on the internet. and answers in the power lunch blogger buzz. >>> check out stocks moving higher today. the common thread here the earnings report. ralph lauren, garminnesota, devon energy all tr

remember the cftc is looking to adopt certain positions for the futures market. the natural gas fund. a lot of talk about the etf community. this is the natural gas fund. they go out and buy futures here. they are designed to track natural gas prices. the problem is there is a large tracking error development. look at the last two weeks. the bottom line is the unc. the cause of this is that the underlying fund is not issuing new shares even though there is a great demand for it. they are worried about the cftc and posing the limit. that's a big issue right now. these investigations are starting to affect the world of etf and exchange trade. deutsch bank halted issuance of the double long crude oil and exchange traded notes. not clear why, but the suspicion is the similar concerns over regulatory issues. i will let you know when we get more information. >> look guard to that. hurricane bill weakened to a category three storm, but the watch is on to see if it regains power and which path it will take. nick walker joins us with the latest. i had again, nick. >> you

segregated funds measured by the cftc are up. we are gaining market share. people are embracing the model that is focused on risk management. >> there is a lot of noise and it's difficult to tell what you earn and what the run rate is. could you clarify what that is? >> sure. i have been with the company for a year and we have been rebuilding and addressing legacy issues to try to identify the run rates. the way we report is with some of these exceptions that have existed since the ipo. a real run rate to focus on is the nickel. the market is expecting four cents and relative to the industry where zero interest rates and a key driver for us and a low volume over the last year and a half. we feel good we are at a nickel. >> the first quarter revenue was down 28%. a sharp decline in trading volume which i don't understand. i hear about high frequency trading and the volume going on all over the place. why aren't you in there? >> you are talking year on year. what happened in the futures industry which is the biggest driver is open interest is down 50% year on

said they should not be considered an insurance product there is debate about it but the fact is the cftc especially under, i forget her name wanted to but it never happened and the failures go way back in 1996 we repeal glass-steagall under the clinton a ministration at the urging of sandy weill so he could get his deal done and combine citigroup with travelers. we will see of the obama administration and gets it right with regulatory reform i do not know the answer it will be interesting to see what happens or what is allowed to happen or whether or not it works. the sec really was very shoddy. other questions? the lady in the front has another and then back to gentlemen and then she is the last question. >> there is intense dispute between democrats and the blue dog democrats concerning the economic consequences of the health reform legislation. apart from the human aspect of bad had to come down on the economic consequences of what is happening? >> i am afraid it is one of those questions i cannot give you a great dancer i spend a lot of time, talking to hedge fund managers trying to

and so until congress and the cftc take more aggressive action to limit some of these harmful levels of speculation, we're going to see higher oil price until whatever economic recovery we have.e. but consumers are doing their part, driving a heck of a lot less, folks are turning in tens of thousands of gas guzzlers in had for more efficient cars. the market -- consumers are responding, the market hasn't been. >> if you americans to drive less and use less oil, you should love those very speculators that you're la minting, because to the extent they increase the prices that end up increasing at the pump, that's the best instant way to get americans to drive less. so how can you want the speculators to rein in, you should be applauding them. >> not when it comes to such signature financial harm to americans. to families that lack access to alternatives to high prices s isn't going to get us a clean energy economy. it's going to get us an in the tank. so what do we need to do is to make sure that we pave the way for the al alternatives. >> zachary, he means well, but he is just entirel

you know, cftc is one thing, but unless the otc markets are much, much bigger.ou know -- >> i heard that directly, richard, one of the things banks is doing is lending to the speculators to speculate in the oil markets because it's -- >> oh, absolutely. >> it's an asset-based loan they get. it's secured. >> absolutely. i mean, just the swaps. when i was in merrill we did some work -- for the bank of international settlements gets you information on commodity-related swaps. there was a point in '08 or early '09, i don't remember exactly when, when the total value of swaps on bank balance sheets was 2 1/2 times the sales of all the material energy companies in the world. so how could one argue there's no speculation if you're hedging 2 1/2 times your sales? by definition you're speculating. >> and betting on the future raises the current price, you say? >> well, of course. >> i'm betting on the future -- glo it's futures. >> i'm not betting on the current price. i'm not buying -- >> no, no. these were swaps, making a bet about the future. >> all right. richard wil

but i think, you know, the cftc and others who are looking at this are more than well aware that they tread carefully there in terms of what they're doing. and they also need to look at, you know, differentials between regulation between different markets. because if you just tighten regulation in one set of markets, then you'll just have a migration of activity elsewhere. so a degree of international standardization is desirable, as well. but that's going to take time to feed through. all we would say is if you choke off liquidity to too great an extent in any market, you'll increase volatility rather than staunch it. >> david, thank you very much for your views, david fyfe from the iea. many thanks for that. bhp billiton, the world's biggest miner has reported its first annual profit fall in seven years. for more on the earning else as well as how the resources seconder is looking, michael lang from qualm securities company joins us from hong kong. michael, good to have you with us. when you look at bhp billiton's earnings, somehow do you think, you know, how resilient is this miner

the cftc provision goes along ways toward dealing with it -- cfta.ou don't get to sell a product at a non-regulated entity under different terms of conditions from a different regulatory structure that you would and depository institutions or otherwise related entity. i think that is one of the critical components of the administration's proposal, to fix that gap. >> thank you. to recommend mr. chairman. >> senator corker. >> thank you for your testimony. i also, like most people did, read the story this morning in "the wall street journal" regarding the meeting on friday, and generally speaking, did it captured the essence of the attitude? >> you take that one. [laughter] >> very briefly, i just -- want to move on. >> it was a candid conversation about the institutions, our agencies different views on the subjects. >> generally fair article? >> a lot of it was true. >> ok -- [laughter] i guess what i would like to get at is it is my understanding that the original draft had the national banking supervisor not being actually a part of treasury. i thi

the cftc provision goes along ways toward dealing with it -- cfta. you don't get to sell a product at a non-regulated entity under different terms of conditions from a different regulatory structure that you would and depository institutions or otherwise related entity. i think that is one of the critical components of the administration's proposal, to fix that gap. >> thank you. to recommend mr. chairman. >> senator corker. >> thank you for your testimony. i also, like most people did, read the story this morning in "the wall street journal" regarding the meeting on friday, and generally speaking, did it captured the essence of the attitude? >> you take that one. [laughter] >> very briefly, i just -- want to move on. >> it was a candid conversation about the institutions, our agencies different views on the subjects. >> generally fair article? >> a lot of it was true. >> ok -- [laughter] i guess what i would like to get at is it is my understanding that the original draft had the national banking supervisor not being actually a part of treasury. i t

. >> speaking of which, the cftc is trying to get a hold on some of these speculators.e's testimony today that argue, in fact, pension funds, other investors should be bard from trading these things just because of the volatility they bring to the futures market. that is a reasonable argument. >> well, it's always easy to blame unknown hidden nameless speculators for problems. we look at it as basically supply and demand. it is a volatile commodity but it's volatile because demand is volatile. recession has caused a huge amount of volatility. but if the government would allow these markets to work, natural gas production is coming down. regardless of whether you think the recession is going to end or when you think it's going to end, natural gas prices will be in balance sometime this winter. not because of an increase in demand but a decrease in supply. as we stop drilling, supply will come down and keep coming down until it finds that equilibrium in prices. that's where devon wants to be well positioned, as our oil properties continue to do well, gas properties are po

the cftc provision goes along ways toward dealing with it -- cfta. you don't get to sell a product at a non-regulated entity under different terms of conditions from a different regulatory structure that you would and depository institutions or otherwise related entity. i think that is one of the critical components of the administration's proposal, to fix that gap. >> thank you. to recommend mr. chairman. >> senator corker. >> thank you for your testimony. i also, like most people did, read the story this morning in "the wall street journal" regarding the meeting on friday, and generally speaking, did it captured the essence of the attitude? >> you take that one. [laughter] >> very briefly, i just -- want to move on. >> it was a candid conversation about the institutions, our agencies different views on the subjects. >> generally fair article? >> a lot of it was true. >> ok -- [laughter] i guess what i would like to get at is it is my understanding that the original draft had the national banking supervisor not being actually a part of treasury. i t

the cftc provision goes along ways toward dealing with it -- cfta.ou don't get to sell a product at a non-regulated entity under different terms of conditions from a different regulatory structure that you would and depository institutions or otherwise related entity. i think that is one of the critical components of the administration's proposal, to fix that gap. >> thank you. to recommend mr. chairman. >> senator corker. >> thank you for your testimony. i also, like most people did, read the story this morning in "the wall street journal" regarding the meeting on friday, and generally speaking, did it captured the essence of the attitude? >> you take that one. [laughter] >> very briefly, i just -- want to move on. >> it was a candid conversation about the institutions, our agencies different views on the subjects. >> generally fair article? >> a lot of it was true. >> ok -- [laughter] i guess what i would like to get at is it is my understanding that the original draft had the national banking supervisor not being actually a part of treasury. i thi

would put both of us on equal footing with other consumer protection agencies like the sec and the cftcot make us as we do currently have to wait for the justice department to clear going for. that we expect that as with any bold and complex new initiative clarifications will be worked out as a legislator process moves forward. but from my perspective, the president's goal of streamlining the overline for protecting consumers were financial abuse is more than commendable. and eliminating the consumer protection oversight over non-banks and banks as mr. barr has alluded to is laudable and very, very critical. we do have some concerns, however, about the draft legislation, or the legislation in its initially drafted. although i am optimistic that we can work these out as the legislative process moves forward. so the proposal states that the fcc would have backstop authority, but the draft legislation imposes review period that could require us to wait 120 days before filing certain cases. we also believe it would be helpful to make definitions in proposal terms such as credit and financia