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To: Abner Hosmer who wrote (5602)	1/12/1998 1:47:00 PM
From: Dwight Taylor	Read Replies (1) \| Respond to of 116759

Thomas-- This is a paragraph form that AG speech on derivatives. I am impressed by his comment that market manipulation is impossible to prove and more likely a Walter Middy-type fanatasy. So, I guess one might surmise that if there is any manipulation, or one may contemplate manipulation in the future it will go largely ignored. It is not entirely clear that the view that futures trading was exacerbating volatility in agricultural prices was well-founded. To be sure, evidence abounds that market participants talked incessantly about corners and bear raids. Moreover, the design of the contracts may, indeed, have made such contracts susceptible to manipulation. However, empirical studies of more recent experience cast doubt on whether the use of derivatives adds to price volatility. And, while charges of market manipulation are heard to this day, they typically are difficult, if not impossible, to prove. Professional speculators were easy to blame for fluctuations in market prices that actually reflected fundamental shifts in supply or demand, as they are today. The market clearing process is a very abstract concept. It is sometimes far easier to envisage price changes as the consequence of individual manipulators. Indeed, for a lot of nineteenth-century ring traders, it was some measure of manhood (women were few) that they could squeeze or corner a market. The evidence suggests that this was largely Walter Middy-type fantasy.