Ready for Regulatory Rigor?

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Talk of changing the regulatory framework has been abuzz in Washington for much of the past year, but it accelerated as the financial liquidity crisis deepened this winter. In fact, much of the Congressional testimony of Paulson, Cox and Fed chairman Ben Bernanke has featured an undertone of the need for regulatory reform, though all three have stopped short of calling for new or broader regulation."

In other news that may be of interest to speculative minds, Bloomberg reports that:

"Overall commodity prices may decline by half as the value of products such as corn, wheat and copper tend to ``overshoot'' on speculative buying, Barron's reported, citing independent analyst Steven Briese.

Briese's analysis of positions by commercial hedgers such as farmers, food processors, energy producers and others who trade commodities daily suggested these investments were fully valued in early September, the weekly newspaper said.

Briese estimates index funds, which account for 40 percent of all investments expecting the price of commodities to gain, hold about $211 billion worth of long positions in U.S. markets, the newspaper said in its March 31 issue.

Short positions held by commercial commodities investors in the 17 commodities tracked by the Continuous Commodity Index were 30 percent higher than the previous net-short record in March 2004, Barron's said."

More active and likely more volatile conditions will develop as we get into April and the reviews of Q1 start filtering into markets. Defensive posturing might not be unwise.

Happy Trading.