Craig Pirrong submits:
CFTC Commissioner Bart Chilton has been touting research that he claims supports his view that speculation has distorted prices, thereby necessitating position limits. I’ve read each one. My conclusion: if this is the best he can come up with, the case for position limits is weaker than I thought. And that’s saying something.
The citations fall into a couple of categories: Superficial quasi-academic studies and quotations from various figures. These include some well-known economists who have done absolutely no serious research on the subject.
Here are my quick takes on each one.
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“The Oil Price Really is a Speculative Bubble.” (“The Oil Price Really Is a Speculative Bubble,” R. S. Eckaus, MIT Center for Energy and Environmental Policy Research, June 13, 2008). This paper is extremely thin gruel. It briefly discusses data on consumption and production of oil, but carries out no statistical analysis. Indeed, Eckaus says: “We cannot pick
