07-23-2008, 04:35 PM | #11 |
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07-23-2008, 04:55 PM | #12 | |
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My question is, why not? Have futures markets in other commodities (or options markets) driven prices nothing but up?
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07-23-2008, 05:08 PM | #13 | |
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Sure they have. You just haven't heard about them because they don't have the huge impact oil does on everyone. Did you hear about the Long Term Capital collapse in the late 90's. That was a result of speculators messing around in futures contracts. A lot of people think the crash in '87 had a lot to do with program trading, which involved option trading vs owning or selling stock. If you remember what I have said before, which I don't expect you too, I have predicted each crisis we find out comes from crazy new hedge or futures type product. Remember when this unraveling started coming in late last year. It started with hedge funds in big trouble, Bear Stearns had two that collapsed. Once that ball starts rolling it is hard to stop. Why is it hard to stop, because these dopes are losing some of their money but most of it is borrowed money from banks and exchanges. Watch, I predict if oil keeps dropping hard we will hear about some big leveraged fund in financial trouble. I don't care if future speculators get in their. They should just get in there with there own money, not borrowed money which inflates the demand. |
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07-24-2008, 01:43 PM | #14 |
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Tim Hartford (The Undercover Economist) explains why oil speculation is ok
http://www.slate.com/id/2195037/
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07-24-2008, 01:55 PM | #15 | |||
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He builds a strawman about short-selling and then knocks it down. He doesn't address at all the huge influx of institutional money into the oil futures market (due to the GOP law), all these buyers that never have and never will actually take on oil shipments. I saw a report that in the last few years there has been an extra $200 billion poured into the futures market that in the stock market would not be a big number, but in the futures commodity market it is a HUGE number. Sorry that slate piece is shoddy and does not address any of the arguments that others are making that huge influxes of money coming into the futures market is running up the price. |
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07-28-2011, 06:18 AM | #16 |
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Generally speaking, our resources are starting to become depleted like oil. Soon, they will run out and it will affect the economy.
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