Stupid Oil Speculator's are at it again!

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Originally Posted By: genynnc
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If fleas could talk they would tell you how they benefit dogs.


They sure would but we have facts that prove otherwise. Not like here, we have knowledge that proves speculation creates more efficient markets.


The old East India markets were an efficient way for speculators and investors to ensure that goods efficiently reached consumers...didn't know they were still using the same data
 
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The old East India markets were an efficient way for speculators and investors to ensure that goods efficiently reached consumers...didn't know they were still using the same data


Sorry, but this analogy lies half on mars and half at the bottom of the ocean. First- E.I.C. was a rent-seeker (i.e.-gov't chartered company) Second- the rule of law was pretty much non-existent in newly British colonized India. Third- they cornered the market(s) by controlling both supply and demand via intimidating and threatening third parties. I can can go on and on but I don't think it's needed.
 
Originally Posted By: genynnc
Think of it this way. All comodities are speculative. So, would farmers plant millions of acres of corn without these so called 'gamblers'? If the farmer had no idea what the value of his product would be from planting to harvesting, then what would transpire? I would say, he would diversify his products and plant a lot less of one thing.


You say that like it's a bad thing.

Diversity and crop rotation were an integral part of agriculture, and stewardship of the soil, plus a hedge against bad growing seasons for one or another of the crops/cattle.

Monoculture is a ridiculous risk.
 
There is more than enough supply and low demand. The refineries are running way under capacity. How does this supply and demand non issue have to due with prices going up? It doesn't.

It is investors playing games. The dollar is weak....buy some oil. Demand might go up.....buy some oil. I hear Tiger Woods is getting a divorce....buy oil.

Where is the true issues that should be forcing oil up? There aren't any.
 
Originally Posted By: ZZman
Where is the true issues that should be forcing oil up? There aren't any.


China and India consumption.
 
They may be using more but there is no shortage. Everyone can buy as much oil as they want.

Just because they are using more doesn't mean prices need to go up.
 
Then you would end up with gas stations that have fuel and those that don't. They would still manage to up the price just to assure supply over other competitors.

There is infinite demand based on price. Now if you want to just assassinate the speculators and let pure supply and demand run the show, fine. You can buy $2.50/gallon gas one day ..then one blip in the Persian Gulf and you'll pay $4.50 the next. The speculation will just move to a different level and look more like chaos.

Oil is a commodity that's in a continuum. Let's say you're a gas station owner. You get a load of fuel and add your mark up. The terminal calls and says that your next load goes up $0.05/gallon (7000 gals X $0.05= $350). So, you don't raise your price and let the new load come in and pay $350 out of revenue. You do this each time an increase occurs. You'll eventually have to go out of business to recover your added costs for just "passing it through".

That's why when the price goes up at the market level, everyone raises their prices since current inventory has the same value as future inventory since that's what it's going to cost them ..and everyone else.


Now if you could manage to store a global supply of 30 days????...then you could have some leverage against price fluctuations. You would use it as a capacitor/pressure regulator. If price went too high ..you would release the reserve to bring it back down. If it went below a certain amount, you would soak it up to support the floor in pricing. Add capacity as needed to shut out fluctuations.

Now who's going to own/maintain/manage this "global reserve"?? Except for the tanks (that there could never be enough of) it's called OPEC and a couple of others.
 
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First- E.I.C. was a rent-seeker (i.e.-gov't chartered company) Second- the rule of law was pretty much non-existent in newly British colonized India. Third- they cornered the market(s) by controlling both supply and demand via intimidating and threatening third parties. I can can go on and on but I don't think it's needed.


Shannow, I wasn't saying speculation wasn't present, of course it was. What I was pointing out was that speculation is far from E.I.C's root problem in Asian markets. Let me draw a picture...
E.I.C- state sponsered entity. Oil Speculators- Not sponsered by govt.
Financial regulation in the 18th century?-little to no authority Today? all countries excercise various forms of regulation
E.I.C- controlled the means of production/procurement Today's Oil speculators defenitely fail to acheive this.

Your analogy would be better received if we were comparing diamond speculation, a la the De Beer's diamond company


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Diversity and crop rotation were an integral part of agriculture, and stewardship of the soil, plus a hedge against bad growing seasons for one or another of the crops/cattle.

Monoculture is a ridiculous risk



Again, nothing is wrong with diversifying crops, it is a hedge against risk. What my analogy does say, is that when future prices are uncertain you get either get less supply of "X" or higher prices for "X" a buschel or both. So if you eliminated futures/speculators you would get less prodcut.

I believe Gary Allen made this point also.



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Now if you want to just assassinate the speculators and let pure supply and demand run the show, fine. You can buy $2.50/gallon gas one day ..then one blip in the Persian Gulf and you'll pay $4.50 the next. The speculation will just move to a different level and look more like chaos.


Yes, Gary is correct. Be careful what you wish for... sure prices could be dirt cheap for one day but the next it could be rediculous. Because without speculators/futures, information is not correlated but distributed with no true way of forming a consensus.

[
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There is more than enough supply and low demand. The refineries are running way under capacity. How does this supply and demand non issue have to due with prices going up? It doesn't.


Today DOESN'T MATTER. Wall St. and 'the market' is a discounting mechanism. It discounts future anticipated earnings/data/metrics/prices/blah blah blahto present value today. Everyone knows today's supply is good and anyone that has a functioning head on his/her shoulders knows that tight supply is anticipated in the future. That's the signal that 'the free-market' is sending- more supply is needed and soon!
 
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Okiedokey, diamonds it is then
grin2.gif


Actually agree with most of your post.
 
The problem with the last event was that there was way too much vapor revenue to leverage the commodity. I didn't enjoy the evolution, but without the adjustment to price, supply would have been strained.
 
Originally Posted By: XS650
If fleas could talk they would tell you how they benefit dogs.

I take it that none of your investments involve risk and speculating that you will buy something at a low price and sell it for a higher price? Such as the stock, bond or commodities markets?
 
Originally Posted By: ZZman
We need to keep the players out and the users in.

Maybe if the economy were allowed to improve, the speculators would find something else to invest in? With everything else being so far down, with no real uptick in sight, investors are looking for something.

What investments do you have? You might be a "player" and not even know it.
 
What about derivatives tempest, which provide nothing tangible or useful, but amount for many times the size of the US GDP ?

Shorting ?

where's the productive benefit and efficient market in that ?
 
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where's the productive benefit and efficient market in that ?

That people are allowed to make money and that helps the economy. If people are being DEFRAUDED, then that is criminal matter. Derivatives provide a hedge for investments, which is very useful.

Are you saying that derivatives and shorting should be banned?
 
Are you saying that having derivatives out there many times the actual GDP of your country is good ?

How can that be insurance, when the entire GDP doesn't cover them ?

Why do the fleas still insist that naked shorting is still a good thing ?...or at least not bad.
 
Originally Posted By: Tempest
That people are allowed to make money and that helps the economy. If people are being DEFRAUDED, then that is criminal matter.


In a zero sum (or 3% growth, say), where does the extra come from, if not from the accounts of the ones not getting rich ?

Wouldn't the money be better served to the economy by consumers at the lower levels than hedge fund managers ?
 
Originally Posted By: Tempest


Are you saying that derivatives and shorting should be banned?


That is a good start. Also stop the leveraging. If you don't have the money to pay, don't play.
 
Originally Posted By: ZZman

That is a good start. Also stop the leveraging. If you don't have the money to pay, don't play.

I'll ask you again, what type of investments do you have?
 
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