I don't get this. It appears to be anti-socialist, anti-bureaucratic and pro free markets then wants to ban a free market (oil futures)? Speculators are simply pricing in the possibilities of war, terrorism, shortages, consumption and even the (small) odds that the peak oil crowd is right. Speculators also took oil down into the 50s and 60s right earlier this year, remember? I suspect oil has a high "hurricane premium" right now. If weather is stable in the Gulf of Mexico over the next month or two, we could see another strong drop in oil prices (and simultaneous rally in non-commodity stocks), just like last year.
Or, when traders actually wake up and realize oil is a finite commodity, prices will explode beyond imagination. Remember, in it's finiteness oil is unlike any other commodity. No one is really producing oil. Ursa..
Yes, that is an interesting observation. I would add that 1) many of these established businesses are well beyond the prime of their lifecycle and are about to collapse or fade-away; they suddenly seem old-fashioned and fail to adapt. 2) a nation is not a business. Regarding it as such is ignoring potential but also ignoring complexities that do not exist in a 'simple' multinational. Ursa..
Godwin's law Usenet. There is a tradition in many groups that, once this occurs, that thread is over, and whoever mentioned the Nazis has automatically lost whatever argument was in progress. Godwin's Law thus practically guarantees the existence of an upper bound on thread length in those groups. However there is also a widely- recognized codicil that any intentional triggering of Godwin's Law in order to invoke its thread-ending effects will be unsuccessful. "As a Usenet discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one."
lot of misinformation here. when a commodity goes into backwardation, that implies higher PRESENT demand. Its a bullish sign. People are BUYING today's spot, selling the rear. There's not even much of a way to profit by buying spot and storing the commodity and selling it at a future price (no incentive since its a losing trade). When fundamentals aren't as solid, 'speculative' premium sends markets into contango - meaning traders are willing to keep rear months higher over market uncertainties that are actually not present issues (ie fear of an Iran blowup). If you get a hurricane, watch the price gap between winter and front month natural gas close or even invert, because of supply worries. This latest oil move is all a reaction to declining production and OPEC steadfastness not to raise their targets. The supply/demand margin is thin. Look at the 200-day or longer moving average on oil price, and thats fair value, for the moment. As for other people's statements in this thread 'oils a commodity, like tulips, and when people figure this out it'll crash' - thats about as meaningful a statement as 'stocks are useless' - at least you can live in your house. I dare you to short RIMM and buy a house at market price right now. Tell me how you do in the short term (1 year). This has to be one of the most pointless threads on ET, and I should be ashamed I'm responding. By the way, to original poster: I think the real problem in any speculative physical market is the ability to trade a financially settled contract and have the power to move price. Exchanges like ICE facilitate this with their financially settled swap products. That IS a REAL problem with oil and natural gas right now, especially thinner markets like natty. That creates opportunity for more price distortion. But in a futures market without these swap products, I think its a good thing. If you force speculators to close the positions they open, you return balance to the market and over time, price is fair. I also like the idea of increasing margin requirements - 4:1 to 2:1 overnight leverage for speculative accts would be appropriate to cease fund manipulation power. But OTC contracts follow different margin/credit line rules all together ... so I don't know how much a difference it would make unless all the exchanges and trade facilitators really decided on uniform policy.
i thought oil and gas prices were going up was because the chinese and indian economies were going up 8% per annum
No, that is the reason we went to IRAQ so we wouldn't be outbid for oil by thier economies which need oil for mfg, we need oil to drive to mall.
I personally think the US economy is in shambles and is artificially prolonged by attracting foreign money. No country permanently at war can sustain without a war-economy of some sort. Original. And that's why lots of European countries try hard to adopt American style of capitalism. Generally speaking, anybody who thinks Europeans have anything fundamentally better than the U.S. economy-wise has absolutely no clue about economics. Can you explain to me how country with economy in shambles manages to attract foreign capital so much so that it keeps economy from falling apart??? Please tell me how Americans manage to do it?????
If foreign capital divested of America markets, they would slit their own throats. That doesn't mean the American economy isn't in shambles.