Are you kidding me. The scum bag Parasites in DC are demanding action? What about their fucking Lies to the American people? http://www.politico.com/news/stories/0511/54162.html Their story changes by the minute on OSAMA. The Birth Certificate has a Connecticut SSN but the fool was born in Hawaii? Tim G says they support a STRONG DOLLAR? The Sheeople deserve what they get in this country. Could careless anymore. Fuck the average joe who voted for this ASS clown and the rest of the scum in DC. So, now lets see what bullshit they come up with as far as the Oil markets. What is next, cotton? Lumber? Metals? Please. They raise the debt ceiling and they are about to unleash QE3 and these fools wonder why the price of Oil is rising. Oh well, who is John Galt?
Barney Frank wants to do the opposite. He'd like to take away the votes of so-called inflation hawks: http://www.marketwatch.com/story/rep-frank-targets-fed-hawks-2011-05-03
This is the same government who just took land, destroyed homes, regardless of their "Worth". http://www.msnbc.msn.com/id/42873438/ns/weather/ You do not truly own property in this country if the GOV deems it not so. So, what if the Government decided to take over all independent producing oil wells? The "GREATER GOOD" is more important than your farmland. May be more important than your "Oil"well. Revolution is coming and I can't wait. My last post before I board a plane to Columbia, where at least I know what the Rules are and what the Government controls. I will post some economic findings when I return on Friday, from an Investors meeting. Until then, I'm sure the Parasites on ET will post 1000000 more fucking idiotic post and give praise to the "NEW WORLD ORDER", as they don't have a pot to piss in. Oh yea, hey ass clown SENIOR EPRADO? Take a look at oil prices you fool! You speak about shit you have no clue about. I suggest you stay put in your Cubical and continue to answer those inbound sales calls for "Vaginal" cream.....you idiot.
See, I just don't understand how that is supposed to play out in real life. Suppose you're a big player, and you're already long, and you want to drive prices higher so you put in a big buy order to drive the price up...ok...you know there's gonna be a number of other speculators who are waiting for price to come back down. How is that gonna play out when you go to sell all your contracts and no one is willing to pay your price? see? There's absolutely no guarantee that your 'manipulation' will work. It could totally backfire, and has backfired time and again when people have tried to manipulate the market. Am I wrong?
"GENEVA â Michael Dunn, a Commissioner of the U.S. Commodity Futures Trading Commission (CFTC), joined international experts examining the commodities markets in the Global Commodities Forum in Geneva, hosted by the UN Conference on Trade and Development (UNCTAD). At a time when international prices of some commodities are increasing, Commissioner Dunn pointed out that there is little empirical data to support the commonly-repeated view that speculators caused the oil price spike in 2008. Dunn also analyzed possible contributing causes to the current volatility in agricultural markets, such as changes in demand, weather, supply constraints, and political uncertainty. He urged countries to provide greater market transparency, improve data collection, and avoid market-distorting actions that might worsen price volatility, such as export bans." continued: http://geneva.usmission.gov/2011/02/01/volatility-in-international-commodity-markets/
repeat something often enough and people will believe it. Regardless of whether or not it makes sense. now if someone can break it down for me and explain why I'm wrong, I'm willing to change my view. I have no ego invested in being right.
It has value because those speculators will be guaging the price based on where they think they can sell it to producers and consumers. Additionally speculators provide liquidity. If they can only trade with producers and consumers they will demand higher spreads or edge. This will increase slippage costs and raise the cost of hedging for producers and consumers. The mortgage market was fine until everyone decided to lever up and buy bonds. Being able to package a bond and sell it to a speculator (who was only buying it to make money) banks were able to provide an asset to one party that wanted it and a loan to another and free up their balance to service the next customer. If a speculator couldn't trade with another speculator he would demand a higher rate of return to compensate for the liquidty. This would make the whole market less efficient. Of course when the borrower is levered up and the speculator is levered up there are problems. The same goes with the short sell ban. The idea was to prevent bear raids. The problem is that most shorting is part of hedging activity by speculators and arbitraguers and those shorts provide liquidity when the real money guys were puking. When they were gone there was no one to buy from the real money guys. Specifically in the oil markets I would think there is no one bigger than the producers and consumers of oil. By in large the more speculators there are in the market the more efficient the market, the faster the price discovery and the lower the transaction costs for the real consumers/producers of that asset. And if those speculators lose a lot of money or make a lot of money, who cares as long as they aren't so levered up that their demise will cascade through the market.
If you believe that some combination of long only funds and Evil Speculators (TM) have pushed the oil price up well beyond the price justified by the market, then do what a trader should do -- short oil and come back here in a month and brag about your profits. As I recall the long only natural gas fund, UNG, did nothing to support the natural gas price during 2008 - 2009.
yes, right on. Again, speculators are a key part of the commodity markets. They are there to take the risk. It's why the markets exist....so producers and end-users can transfer risk. Yes, there can be times that prices can get out of whack (in theory) but by and large these markets help keep prices in check and efficient outside of normal supply and demand forces.
Prices are the wackiest in markets where speculators aren't allowed. If you look at a lot of third world markets where they don't allow shorting or limit investor bases there are very akward mispricings. A classic example were indian ADR's which traded at a 50-100% premium to indian local stock. So an indian in india could by the same stock for 1/2 the price of an American investor. American investors had all the money and it was harder for indian companies to tap that money for capital expansion.