I cannot believe I am going to say this - but I agreed with many aspects of the Senate’s investigation into the Amaranth fiasco. I am often critical of government’s meddling in most things, and especially excessive regulation of capital markets. I don’t buy into the investigation claims that consumers suffered higher gas prices almost singlehandedly due to Amaranth. Markets are a bit more complex than that, but other than that assumption, I was extremely impressed with this postmortem analysis of what went wrong and what to do better.

After reading the Senate summary report and Senator Levin’s excellent opening statement, I was a little shocked by the unlevel playing field and regulatory exceptions for ICE versus NYMEX via the “Enron Loophole”. But what really got me was the ridiculously low budget of the Commodity Futures Trading Commission who has oversight of currency, futures, options and commodities markets. Right now, the entire CFTC annual budget is $98 million versus $880 million for the SEC. With the unbelievable growth in commodities, futures, options and currency trading and their impact on all other asset classes, this underfunding is just ridiculous. Amaranth investors lost billions and as much as throwing money at another government agency does not guarantee that regulation will save blowups, I just cannot help believing that it would not have hurt. The CFTC needs more funding and a better delineation of its regulatory responsibilities. I hope they get it and will put it to good use.