coincedence or not

[Admin]

Well the article says how the market isn't balanced, and continues to move only to the upside.

The part about taking delivery was posed as a potential remedy to remove the speculators from having a field day when they have no intention on or capability of taking delivery of the product they are bidding on. While this same process is true of all commodities, oil is unique and as the article clearly points out, by putting so many buyers into the picture, it can't help but push the prices higher....if you want a piece of the pie, you have to pay whatever it takes to get it.

BTW, I didn't come up with the "take delivery" clause...I have heard that from several of the pundits who say this would work.

Oh, and don't forget your smiley face

I agree the article talks about the market being unbalanced and I also agree with the root cause of this-Fund Trading. The trader used the term "an army of buyers" to describe them, this to me is a bit misleading as the individuals making up the source of the fund money do not actually trade, their trading power is concentrated to one trader, the fund manager. That is why I used the analogy of an 800 lb gorilla. In either case, you have one entity coming into the market with vastly more financial resources than other market participants and thus have huge impacts on what happens in the markets.

If all this fund money came in as individuals, then there would not be a problem, because there would be more of a balance of ideas as to if the market should go up or down. The more participants you have in the market, the less impact one individual or entity can have (tug of war scenario). That is why you want MORE participants and not LESS. However, you do not want one participant that has the power of 100's or 1000's of the rest of the traders.

I don't have the answers on how to fix things, but know that limiting participants to only those that can take delivery will make things worse- guaranteed. The "pundits" you heard this from, were just wrong.

I will agree that with unlimited and non-transparent fund activity (until the commitment of traders numbers are released), the markets are broke and not doing the job that they were designed to do. Previous to the level of fun activity involvement there is now, the markets were about as perfect a price discovery tool there is. Prices responded in a measurable response to valid inputs.

-John

 

[anonomoose]

I agree the article talks about the market being unbalanced ...Previous to the level of fun activity involvement there is now, the markets were about as perfect a price discovery tool there is. Prices responded in a measurable response to valid inputs.

-John

Well that was before, and this is now. Markets left to individual trades were a good balancing act. But that has all changed, now hasn't it?

I suspect there are about a dozen ways to fix this problem, but politics and corruption will prevent the real fix from happening. Why? Because only those involved with the business, understand it and MOST of those guys don't want to fix it. They are content with loading up and leaving a trail of destruction behind themselves, so long as it doesn't interfere with their ability to make HUGE profits, and therefore their HUGE bonus checks(aka Corporate Greed).

Meanwhile the country is having billions sucked out of the economy which has a very predictable effect. And we all contribute by paying more to get from point A to point B. And it really doesn't matter if we pull back and don't spend as much on travel....the price doesn't respond to less demand. And that my friend, is just plain wrong....and NOT characteristic of a free unhindered market...at least as we used to know it.

 

[Admin]

Well that was before, and this is now. Markets left to individual trades were a good balancing act. But that has all changed, now hasn't it?

I suspect there are about a dozen ways to fix this problem, but politics and corruption will prevent the real fix from happening. Why? Because only those involved with the business, understand it and MOST of those guys don't want to fix it. They are content with loading up and leaving a trail of destruction behind themselves, so long as it doesn't interfere with their ability to make HUGE profits, and therefore their HUGE bonus checks(aka Corporate Greed).

Meanwhile the country is having billions sucked out of the economy which has a very predictable effect. And we all contribute by paying more to get from point A to point B. And it really doesn't matter if we pull back and don't spend as much on travel....the price doesn't respond to less demand. And that my friend, is just plain wrong....and NOT characteristic of a free unhindered market...at least as we used to know it.

Well, now you are stating an opinion and not fact and I don't argue opinions, just facts.

-John

 

[anonomoose]

What part don't you think is fact? Part about corporate greed, or the fact that our fragile economy is having the life sucked out of the forward motion by having to drop more everyday into the gas tank?

 

[Admin]

Sorry Moose.

All are your opinions. I may even agree, but don't have the time nor desire to get into opinions.

-John

 

[anonomoose]

C'est la vie

Better luck next time.

 

[catalac]

I just sucked the ten gallons out of my sled to throw in the tractors to mow. Times are tight and my wallet is light!
By the way, it is very interesting to read things from two guys that are alot smarter than I. Wish I could understand it all.

 

[anonomoose]

Problem is there are very few who DO understand it all, and many of them are NOT talking. So you stand in good company...like 99.999999% of the population.

One thing is easy to understand though....everyone is hanging by a thread, and it is a very uncomfortable feeling at the least.

 

[snocat_02]

Oil is bought and sold across the world on the US dollar. When the US Dollar is high oil prices tend to be cheaper. The dollar has been beaten down terribly lately and Oil prices have sky rocketed. You can blame whoever you want to blame, but to get oil cheaper we need to strengthen the US Dollar.

 

[catalac]

I agree.

 

[dcsnomo]

The greater fool theory

"Popular among laymen but not fully confirmed by empirical research,greater fool theory portrays bubbles as driven by the behavior of a perennially optimistic market participants (the fools) who buy overvalued assets in anticipation of selling it to other speculators (the greater fools) at a much higher price. According to this unsupported explanation, the bubbles continue as long as the fools can find greater fools to pay up for the overvalued asset. The bubbles will end only when the greater fool becomes the greatest fool who pays the top price for the overvalued asset and can no longer find another buyer to pay for it at a higher price."

Might it be that this is just another bubble?
We had the commodities bubble of the 70s, dot com bubble of the late 90s, housing bubble of the last decade, credit default swap bubble...

Aren't bubbles one of the primary criticisms of supply side economics (the other being a massive, unsustainable increase in federal debt...jeesh!).

I'm not an economist, but it seems that if we keep pumping money into the top, while removing nuts and bolts manufacturing from the middle, then that investment money will look elsewhere to to invest. Instead of investing in factories, the ever increasing top tier of investment money creates bubbles as it pursues a return.

That causes a misallocation of the economy as consumers must spend more to pay the artificial prices caused by the bubble, and a destruction of wealth when the bubble bursts.

And, since many people have bought into these funds, or have retirements with them, when the bubble bursts they sour and stop discretionary spending, taking the economy with them.

 

[anonomoose]

So then we have a house of fools?? Bravo...DC for prezident!

 

[indy_500]

I just sucked the ten gallons out of my sled to throw in the tractors to mow. Times are tight and my wallet is light!
By the way, it is very interesting to read things from two guys that are alot smarter than I. Wish I could understand it all.

I sucked about 3-4 gallons out of each sled, put them each in a 5 gallon can, and topped off with fresh 93 octane no ethanol. Good to go 4 the summer!

 

[benden1]

So you do not buy, sell or trade with them currently to create an income or savings for retirement?

I do NOT, and won't. I also won't buy tobacco stock, or from any company that is owned by tobacco, and that's a bunch.

Paying attention to what you invest in for not only growth, but for moral reasons. Unfortunately, once again, folks ask no questions as long as their retirement portfolio grows...the faster the better. But I believe there is a moral question here too. One that isn't crystal clear, but one that can decide just how hard your kids and grandkids will have to work. If you can live with modest growth from places that don't exploit, then that is good for the country, which is often the last thing that anyone thinks about when they invest. That's why Bernie Madoff made billions...nobody asked questions, as long as the money flows in. It is a lesson we should all take note of. Would you invest in drug smuggling? How about stuff that isn't so cut and dried but damaging to the country?

If we don't invest in it, WE can control how it works collectively. Tall order to be sure, but do-able in my opinion. And high time to ask yourself if what you do today, will jeopardize what your children and grandchildren will be facing tomorrow. It isn't like we don't know any better...we are just used to assuming what we do won't matter. But it surely does and that indeference can take down any country, as history has shown us over and over again.[/QUOTE]



You do not trade your time for others money?