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View Full Version : Economics Oil prices and speculation. You know I'm a free market guy.


googlegoogle
03-11-2011, 02:41 PM
http://www.cbsnews.com/stories/2009/01/08/60minutes/main4707770.shtml

Skim through that. Seems our market is only creating bubbles.

There needs to be an adjustment folks. Oil speculators should have to buy and physically own the oil. This would lower prices.

Your thoughts?

mlyonsd
03-11-2011, 02:45 PM
http://www.cbsnews.com/stories/2009/01/08/60minutes/main4707770.shtml

Skim through that. Seems our market is only creating bubbles.

There needs to be an adjustment folks. Oil speculators should have to buy and physically own the oil. This would lower prices.

Your thoughts?

For lack of totally understanding the pro's/con's of the issue I agree.

Bewbies
03-11-2011, 02:50 PM
http://www.cbsnews.com/stories/2009/01/08/60minutes/main4707770.shtml

Skim through that. Seems our market is only creating bubbles.

There needs to be an adjustment folks. Oil speculators should have to buy and physically own the oil. This would lower prices.

Your thoughts?

You should probably have to buy a physical Wal-Mart store, or you should have to buy and store 10,000 iPad's for Apple too.

patteeu
03-11-2011, 03:20 PM
Why?

If you think speculators are buying up the price of oil improperly, you should jump on the opposite side of the transaction.

The collective wisdom of speculators helps signal producers to make the right decisions about whether to increase or decrease production. Without the help of these signals, market disruption due to shortages and oversupply would be more common and more severe.

googlegoogle
03-11-2011, 03:56 PM
I understand that but it's creating a bubble. The current system seems inflexible. We are only seeing speculators buying but prices slowly coming down.

Another analogy would be having 'water' on a stock exchange and during a crisis. Speculative hoarding would be unacceptable.

It's like the same thing during the gas crisis in the 70's with hoarding but instead hoarding gas through stock.

Another analogy is the California energy crisis and the way the speculators were hoping for a crisis. http://en.wikipedia.org/wiki/California_electricity_crisis

Seems like we aren't gettin 'real markets'. Instead we are getting bottlenecks. The government is preventing oil drilling and also betting on just oil instead of biodiesel.


Did any of this make any sense?

patteeu
03-11-2011, 04:12 PM
I understand that but it's creating a bubble. The current system seems inflexible. We are only seeing speculators buying but prices slowly coming down.

Another analogy would be having 'water' on a stock exchange and during a crisis. Speculative hoarding would be unacceptable.

It's like the same thing during the gas crisis in the 70's with hoarding but instead hoarding gas through stock.

Another analogy is the California energy crisis and the way the speculators were hoping for a crisis. http://en.wikipedia.org/wiki/California_electricity_crisis

Seems like we aren't gettin 'real markets'. Instead we are getting bottlenecks. The government is preventing oil drilling and also betting on just oil instead of biodiesel.


Did any of this make any sense?

The best discouragement for this kind of bubble are the losses that the speculators experience when the bubble bursts. If you try to prevent them artificially, you're going to create more problems than you resolve, IMO.

JimBaker488
03-11-2011, 08:34 PM
Why?

If you think speculators are buying up the price of oil improperly, you should jump on the opposite side of the transaction.

The collective wisdom of speculators helps signal producers to make the right decisions about whether to increase or decrease production. Without the help of these signals, market disruption due to shortages and oversupply would be more common and more severe.
Exactly !
And the speculators are the other side of the trade for the hedgers
who consist of everything from farmers and airlines to municiple government entities. And like patteeu says, if you think the specs are full of crap, put your money where your mouth is and take their bait.

Saul Good
03-11-2011, 08:50 PM
http://www.cbsnews.com/stories/2009/01/08/60minutes/main4707770.shtml

Skim through that. Seems our market is only creating bubbles.

There needs to be an adjustment folks. Oil speculators should have to buy and physically own the oil. This would lower prices.

Your thoughts?

You sound like a politician...a stupid one.

Mr. Kotter
03-11-2011, 09:17 PM
Why?

If you think speculators are buying up the price of oil improperly, you should jump on the opposite side of the transaction.

The collective wisdom of speculators helps signal producers to make the right decisions about whether to increase or decrease production. Without the help of these signals, market disruption due to shortages and oversupply would be more common and more severe.

Gosh. In other words, screw consumers. Ensuring the right of a privileged elite to engage in "legal" gambling, risk-taking, and windfall profits is much more important than insulating little guys from money-making hobbies of the rich and famous.

Psyko Tek
03-11-2011, 09:20 PM
Why?

If you think speculators are buying up the price of oil improperly, you should jump on the opposite side of the transaction.

The collective wisdom of speculators helps signal producers to make the right decisions about whether to increase or decrease production. Without the help of these signals, market disruption due to shortages and oversupply would be more common and more severe.
dude, we are talking about OPEC
they will keep the price as high as they can untill demand drops
you new here?

by here I mean life in general
supply and demand drive less than futures do

when speculation goes down so do prices
as long as people buy highh on futures we are fooked

Psyko Tek
03-11-2011, 09:22 PM
I understand that but it's creating a bubble. The current system seems inflexible. We are only seeing speculators buying but prices slowly coming down.

Another analogy would be having 'water' on a stock exchange and during a crisis. Speculative hoarding would be unacceptable.

It's like the same thing during the gas crisis in the 70's with hoarding but instead hoarding gas through stock.

Another analogy is the California energy crisis and the way the speculators were hoping for a crisis. http://en.wikipedia.org/wiki/California_electricity_crisis

Seems like we aren't gettin 'real markets'. Instead we are getting bottlenecks. The government is preventing oil drilling and also betting on just oil instead of biodiesel.


Did any of this make any sense?

enron smartest guys in the room

Mr. Kotter
03-11-2011, 09:22 PM
...

when speculation goes down so do prices
as long as people buy highh on futures we are fooked

Dude, as long as the rich get richer in this game, that's all that matters. Screw average consumers.

patteeu
03-11-2011, 09:27 PM
Good Lord, Saul. You left the thread door open and the economic Marx brothers followed you in.

Bewbies
03-11-2011, 09:53 PM
Low gas prices are a basic human right. LMAO

Mr. Kotter
03-11-2011, 09:59 PM
Price-gouging and windfall profits are a basic human rights. LMAO

FYP :toast:

Bewbies
03-11-2011, 10:04 PM
FYP :toast:

Your pussy must be sore as hell. All. The. Time.

Mr. Kotter
03-11-2011, 10:26 PM
Your pussy must be sore as hell. All. The. Time.

Nope. My wife is awesome. Thanks for asking, though. ;)

'Hamas' Jenkins
03-11-2011, 10:30 PM
Speculation was created for physical commodities to help out farmers, not for Goldman Sachs to get an exemption so oil could be traded 27 times before it was consumed, a la 2008.

Explain to me the rationale behind gas prices that climb to their highest mark ever in spite of the fact that supply was up and demand down during the aforementioned year.

Just another way to slaughter the portfolio of a pension group or day trader.

Mr. Kotter
03-11-2011, 10:37 PM
Speculation was created for physical commodities to help out farmers, not for Goldman Sachs to get an exemption so oil could be traded 27 times before it was consumed, a la 2008.

Explain to me the rationale behind gas prices that climb to their highest mark ever in spite of the fact that supply was up and demand down during the aforementioned year.

Just another way to slaughter the portfolio of a pension group or day trader.

SSssssHHHHhhhhhhh!!!

Wall Street and high rolling gamblers are owed their chance to rape the public. Er, eh....well, you can't rape the willing though, and all; because ignorance, along with sweetheart legislation and oversight, constitute "willing" in their book.

KC native
03-11-2011, 10:39 PM
Speculation was created for physical commodities to help out farmers, not for Goldman Sachs to get an exemption so oil could be traded 27 times before it was consumed, a la 2008.

Explain to me the rationale behind gas prices that climb to their highest mark ever in spite of the fact that supply was up and demand down during the aforementioned year.

Just another way to slaughter the portfolio of a pension group or day trader.

Well, that's what you get when they're playing with 0% money and with the expectation of bailouts.

Bewbies
03-11-2011, 10:53 PM
Speculators killed the housing market too. Only these evil speculators were more often referred to as 'homeowners.'

Mr. Kotter
03-11-2011, 10:57 PM
Speculators killed the housing market too. Only these evil speculators were more often referred to as 'homeowners.'

No, that insideous speculation was by real estate and financial/banking interests that gambled on a dangerous bet that over-valued real estate would forever remain over-valued...and lost.

petegz28
03-11-2011, 11:25 PM
Gosh. In other words, screw consumers. Ensuring the right of a privileged elite to engage in "legal" gambling, risk-taking, and windfall profits is much more important than insulating little guys from money-making hobbies of the rich and famous.

And you are a teacher??? :facepalm: Please tell me you teach nothing related to economics.

googlegoogle
03-12-2011, 12:09 AM
And you are a teacher??? :facepalm: Please tell me you teach nothing related to economics.


Wait a second. The article had a valid point that these hedge funds should have a stake by physically buying oil.

That would curtail speculation meant to just exploit war.

Were you in favor of Enron's actions during the Cal energy crisis?

googlegoogle
03-12-2011, 01:00 AM
http://www.bizjournals.com/southflorida/blog/2011/03/sen-nelson-end-oil-profit-gouging.html

Paul Brinkmann
Reporter
Email: pbrinkmann@bizjournals.com
Sen. Bill Nelson, D-Fla., said Friday that oil speculators are using turmoil in Egypt and Libya as the latest excuse for “profit-gouging.”
Nelson has made oil speculation a target in the past. On Friday, he sent a letter his fellow senators, asking them to join him in his latest effort: seeking to raise the margin requirements imposed specifically on purely speculative oil futures contracts.
Nelson wants the senators to co-sign a letter to Gary Gensler, chairman of the Commodity Futures Trading Commission, urging him to act quickly to raise the margin requirements on speculative oil futures contracts.
“The latest spike in oil prices is further evidence that our energy markets are no longer governed by actual supply and demand,” Nelson wrote. “Speculators, again, are seizing on political turmoil to drive the price of oil to unwarranted levels. This time, it’s Egypt and Libya.”
Nelson noted in his letter that speculators have increased their betting on future oil price increases by more than 35 percent, while legitimate hedgers have reduced their holdings of oil futures by more than 20 percent since the Egypt crisis began.
“The loser in this game of profit-gouging by speculators is the American consumer,” he wrote. “Higher gasoline prices mean less money for other things. And at the end of the day, the big loser is America’s economy.”
Last year, in the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress empowered the CFTC to rein in excessive speculation, but rules haven’t been enacted yet. Speculators continue to buy oil with only 6 percent down payments – $6 down on $100 of oil futures. Ordinary investors face 50 percent down payments.
In January, eight U.S. senators called on regulators to reject lobbying by Wall Street and the financial industry aimed at watering down the new rules.
Nelson said in his letter that he would not raise margin requirements on businesses that engage in the hedging of legitimate risk.


Read more: Sen. Nelson: End oil 'profit-gouging' | South Florida Business Journal

petegz28
03-12-2011, 08:08 AM
http://www.bizjournals.com/southflorida/blog/2011/03/sen-nelson-end-oil-profit-gouging.html

Paul Brinkmann
Reporter
Email: pbrinkmann@bizjournals.com
Sen. Bill Nelson, D-Fla., said Friday that oil speculators are using turmoil in Egypt and Libya as the latest excuse for “profit-gouging.”
Nelson has made oil speculation a target in the past. On Friday, he sent a letter his fellow senators, asking them to join him in his latest effort: seeking to raise the margin requirements imposed specifically on purely speculative oil futures contracts.
Nelson wants the senators to co-sign a letter to Gary Gensler, chairman of the Commodity Futures Trading Commission, urging him to act quickly to raise the margin requirements on speculative oil futures contracts.
“The latest spike in oil prices is further evidence that our energy markets are no longer governed by actual supply and demand,” Nelson wrote. “Speculators, again, are seizing on political turmoil to drive the price of oil to unwarranted levels. This time, it’s Egypt and Libya.”
Nelson noted in his letter that speculators have increased their betting on future oil price increases by more than 35 percent, while legitimate hedgers have reduced their holdings of oil futures by more than 20 percent since the Egypt crisis began.
“The loser in this game of profit-gouging by speculators is the American consumer,” he wrote. “Higher gasoline prices mean less money for other things. And at the end of the day, the big loser is America’s economy.”
Last year, in the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress empowered the CFTC to rein in excessive speculation, but rules haven’t been enacted yet. Speculators continue to buy oil with only 6 percent down payments – $6 down on $100 of oil futures. Ordinary investors face 50 percent down payments.
In January, eight U.S. senators called on regulators to reject lobbying by Wall Street and the financial industry aimed at watering down the new rules.
Nelson said in his letter that he would not raise margin requirements on businesses that engage in the hedging of legitimate risk.


Read more: Sen. Nelson: End oil 'profit-gouging' | South Florida Business Journal

I have no quams about raising margin req's for hedge funds

Hog Farmer
03-12-2011, 06:40 PM
Why?

If you think speculators are buying up the price of oil improperly, you should jump on the opposite side of the transaction.

The collective wisdom of speculators helps signal producers to make the right decisions about whether to increase or decrease production. Without the help of these signals, market disruption due to shortages and oversupply would be more common and more severe.


I disagree. I've watched the speculators destroy American lives by manipulating the grain markets. I wholeheartedley agree if you buy a commodity you need to take physical possession of it. It's the only way to stop this bullshit.

Hog Farmer
03-12-2011, 06:45 PM
Through an inside source I was told at one point and time back in 2008 that Goldman Sachs said corn would go to 4.75. It was around 3.80 at the time . Within a week it went to 4.75. That really opened my eyes to who contols these markets. The Goddamn speculators. I consider them terrorists and should be hunted down and killed. Fuck them.

penchief
03-12-2011, 09:00 PM
Finally, people are starting to see the light.

Amnorix
03-12-2011, 09:04 PM
Why?

If you think speculators are buying up the price of oil improperly, you should jump on the opposite side of the transaction.

The collective wisdom of speculators helps signal producers to make the right decisions about whether to increase or decrease production. Without the help of these signals, market disruption due to shortages and oversupply would be more common and more severe.


This.

The "early" increase in the price of oil means that harder to develop oil fields become cost-effective to begin developing "earlier", and that people start cutting down on their oil utilization "earlier" by driving less, or considering alternative energy means in connection with the products they buy.

Speculators may cause some difficult to quantiy short term pain, but they provide us with long term gain. They also help the markets operate more efficiently (more liquidity etc.)

Amnorix
03-12-2011, 09:07 PM
No, that insideous speculation was by real estate and financial/banking interests that gambled on a dangerous bet that over-valued real estate would forever remain over-valued...and lost.

You gotta be kidding me. There is plenty of blame to hand out in the housing bubble, and the bankers get a very fair share of it, but so do homeowners who had zero understanding of what they were doing.

KILLER_CLOWN
03-12-2011, 09:12 PM
You gotta be kidding me. There is plenty of blame to hand out in the housing bubble, and the bankers get a very fair share of it, but so do homeowners who had zero understanding of what they were doing.

Who approved the loans?

Amnorix
03-12-2011, 09:18 PM
Who approved the loans?

Often, loan officers at banks that would take a fee on the loan and then pass the paper to some other institution/investor that would take the loss if the loan failed.

And I apportion a tremendous amount of blame to both mortgage brokers who essentially scammed their clients, banks that came up with stupid loan programs that seemed designed to guaranty default, and the banks/investors who bought that crappy paper.

And the rating agencies that failed to recognize the risk.

But ultimately, there is no doubt that the homeowners total failure to understand their own financial position leaves them with a share of the blame also.

KILLER_CLOWN
03-12-2011, 09:20 PM
Often, loan officers at banks that would take a fee on the loan and then pass the paper to some other institution/investor that would take the loss if the loan failed.

And I apportion a tremendous amount of blame to both mortgage brokers who essentially scammed their clients, banks that came up with stupid loan programs that seemed designed to guaranty default, and the banks/investors who bought that crappy paper.

And the rating agencies that failed to recognize the risk.

But ultimately, there is no doubt that the homeowners total failure to understand their own financial position leaves them with a share of the blame also.

Most people are just trying to live "The American Dream" so GOD bless them for that.

Amnorix
03-12-2011, 09:43 PM
Most people are just trying to live "The American Dream" so GOD bless them for that.

God bless them? An odd way of looking at defaulting on loans.

Hey -- I need a loan to buy some really nice electronics. I'm trying to live the American dream man. Can you spot me a few, I'm good for it. Surely you won't be so unAmerican as to deny my American dream! Thanks.

Mr. Kotter
03-12-2011, 10:03 PM
God bless them? An odd way of looking at defaulting on loans.

Hey -- I need a loan to buy some really nice electronics. I'm trying to live the American dream man. Can you spot me a few, I'm good for it. Surely you won't be so unAmerican as to deny my American dream! Thanks.

LMAO LMAO LMAO



:toast:

KILLER_CLOWN
03-12-2011, 11:10 PM
God bless them? An odd way of looking at defaulting on loans.

Hey -- I need a loan to buy some really nice electronics. I'm trying to live the American dream man. Can you spot me a few, I'm good for it. Surely you won't be so unAmerican as to deny my American dream! Thanks.

wait are you suggesting that these people stole the loans? These people HAD good jobs which were shipped overseas and left holding the bag so to speak. I can't believe someone would rather pay for a mortgage than throw money away to pay someone elses. We should throw them all in jail.

Mr. Kotter
03-14-2011, 07:50 AM
wait are you suggesting that these people stole the loans? These people HAD good jobs which were shipped overseas and left holding the bag so to speak. I can't believe someone would rather pay for a mortgage than throw money away to pay someone elses. We should throw them all in jail.

Come on, man; it's entirely "legal"....God bless them, every one!