Posted on 04/05/2012 10:39:17 AM PDT by Why So Serious
Crude speculators are hurting consumers!
They [and everyone in between them] sound so stupid when they say this. That is the same as saying that North America is no longer a sheet of ice because we drive cars. They are no different than the global-warming crowd.
I have been either a broker or a trader since 1982. Crude was trading between $10-30. The mantra is speculators "push" oil prices higher so that we make money. NOT TRUE! Speculators buy oil because underlying fundamentals or technicals suggest that the price is going higher. I will play your silly little game.. Let's say that speculators could push oil prices to wherever we want them to go. IF oil were "pushed" down to $25 the economy would explode [that is another story], the DOW would rally to 21,000 and bonds prices would be cut in half. I say this because IF speculators have the control that they are given, they would get longs stocks, short bonds ... and then "push" oil to $25, at which time they would many multiples [Billions, instead of millions] of the money they make trading oil as it is traded now.
O'Reilly blaming oil traders for the price of oil is no different than Al Gore blaming my Bar-B-Que grill for global warming. I am not surprised when Pelosi says it, but when O'Reilly says it I picture him sitting next to Pelosi on the couch like Gingrich did.
Crude went down yesterday yet gas went up 5 cents. Go figure.
O’Reilly got this opinion from a ‘guest’ buddy, Lou Dobbs. Dobbs just doesn’t appeal to me as a ‘financial, business’ advisor. He is not the sharpest tack in the box.
Dobbs raft of white teeth glaring at you are distracting. LOL!
So, you’re saying that traders, brokers, and speculators WOULD manipulate the market if they had the means to?
Shocker.
Speculation only indicates monetarily where the fundamentals are driving the price. Granted, that is an opinion of where the future fundamentals are going to be, but for every buying at that price, someone has to be selling at the price as well.
Don’t commies always blame speculators when prices don’t go their way. They’re always looking for a bogeyman to blame. It’s never their policies that cause it, it’s the evil Capitalism. O’Reilly is way off on this one.
It’s 2 things. Theft from the citizenry, and the ‘nudge’ or pressure to sit down and be quiet.
Yeah groceries are way up too...
And the media cheerleads because the DOW went above 13,000 week or so ago.
On our gas and food prices...makes me think how heavily invested the members of the media are...
I think BOR has admitted he’s a fool on this issue and is just jawboning the oil companies. As if that will make a difference.
I he was truly for lower prices, then he should be jawboning the government to get out of the way and perhaps even partner with big oil.
Most people don’t have a clue how the economy works, how the market works, how any of this works, so they are ripe for any stupid thing the media says or the political liars say, as long as it sounds good (that is as long as it blames someone they don’t really like anyway —someone who has more than they do).
It’s a sad fact, and it probably will always be like this because our schools don’t teach this stuff.
I love capitalism. But when TradeWorx can generate high-frequency trades that they hold for an average of 20-25 seconds before selling, that’s not capitalism. That’s number manipulation.
Speculators form a vital part of the commodities markets:
take as example oranges...Producers want to be sure of a price for their item upon future delivery, so they will tend and produce oranges based on a guaranteed future price. Users want to know the price they will pay when actually getting the oranges. Who is in the middle to furnish liquidity to the process? Viola! Speculators!
“Crude went down yesterday yet gas went up 5 cents. Go figure.”
There is nothing odd about that. There are many factors beside the price of oil which can change gas ‘at the pump’ pricing.
Cracking costs, delivery contract changes and boutique blend requirements being just a few examples.
Futures trading, as you say, is based upon underlying market values and perception of percieved future values and in isolation would have little impact.
We saw in 2008 when the derivative trading passed all semblance of reality that the trading itself produced market pressures leading to collapsing values in the markets that the derivatives underwrote.
The sacrosanct free market would supposedly regulate itself. The problem with that approach is that regulations are just rules. If there are no rules, the players can cheat; and cheat they have, with a gambler's addiction.In December 2007, the Bank for International Settlements reported derivative trades tallying in at $681 trillion - ten times the gross domestic product of all the countries in the world combined. Somebody is obviously bluffing about the money being brought to the game, and that realization has made for some very jittery markets.
That comes from http://www.globalresearch.ca/index.php?context=va&aid=8634
which has some interesting insights for being written in mid 2008.
A speculative trade, becomes a hedge, which becomes an unregulated insurance policy, which becomes a collateral, which becomes an assett and pretty soon you have a market in paper and thin air that is bigger than the physical market it is based upon.
Why do we regulate race track betting? Because the horse doesn't earn a wage equal to the tracks revenue bet when he runs a mile and a quarter.
If the underlying value is so solid, why not buy the commodity itself is what the gold guys say about futures trades in precious metals.
I sympathize with your feelings that your industry is being portrayed unfairly. Perhaps that is so and provable by good analysis. However, we have seen a lot of games in all of the trading and speculative markets and we see that when the day is over the crappy dollar value and OPEC can only be blamed for a portion of the driving factors.
With the exception of a penny stock, markets are going where they are going regardless of who has bought or sold them. A market as mature as oil, or gold is going where the underlying fundamentals DICTATE. If I use probabilistic analysis and figure out that oil is going from its current price of 103.34 to 107.10 in the next two days and I buy it, that is no different than the guy who figures it is going from the current 103.34 to 103.37 in the next 3 seconds and buys it. It is not manipulated, and you are wrong to think it. These traders are the new liquidity. I have an easier time getting my orders filled now than I did when it was 200 traders yelling and screaming in a pit.
And believe me, I fought the longest hardest fight to keep commodity futures off the screen and on the trading floor at the exchange that I was a member of. I was wrong, and so are you!
Too easy of a comment. If you buy a stock at $10, you see nothing wrong with the people who come in a pay a higher price for that stock. A silly response like that shows that you know nothing about the industry and are spewing something you heard on the Charles Rangel Show.
Let's look at the comment ... In December 2007, the Bank for International Settlements reported derivative trades tallying in at $681 trillion - ten times the gross domestic product of all the countries in the world combined. Somebody is obviously bluffing about the money being brought to the game, and that realization has made for some very jittery markets.
If you and I bet $20 on the superbowl one of us is going to win and one of us is going to lose. If you and I bet $100 one of us is going to win and one of us is going to lose. IF you and I bet %681 Trillion one of us is going to win and one of us is going to lose .. oh, and one of us is not going to get paid. Who should protect you and me from making the $10 bet, the $100 bet, and the $681 Trillion bet? Nobody from any of them. When I was a kid many times I said to my brother, "I will bet you a Billion dollars." As many times as we made that bet the government never bailed me out by paying my brother. The regulation that I do agree should be in place is that banks CANNOT use FDIC insured deposits to make these bets. But if Goldman Sachs makes this bet with CITIC that is none of our business, as long as we are prepared to not bail one of them out when they lose because they have friends in the government.
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