February 21, 2014 | The following is an excerpt from Jed Morey's new book, The Great American Disconnect: Seven Fundamental Threats To Our Democracy (Long Island Press, 2013).
The easiest way to think about commodities is that they are things — physical things — that can be measured in size, quantity or volume. Fruit. Oil. Grains. Metals. Currency. All these have unique characteristics and trade against one another on commodities exchanges throughout the world.
It is a complicated system that’s not for the faint of heart. Only a select few traders on Wall Street have the acumen and desire to deal in this sector, an exchange that had been efficiently regulated by the CEA since 1936. To help understand the markets, in 2008 I interviewed Michael Greenberger, an outspoken critic and former employee of the CFTC, who described these as “backwater markets,” but ones that recently have become “as important to understand and regulate as the securities and debt markets are.”