Anyone hear about this

[srimes]

The government needs to try to do something about the oil futures traders as well. They are a large contributor to the rapid rise in prices.

~Alex

no no no, there is no evidence of that. Futures traders actually smooth out commodity pricies. Without them prices would be MUCH more volatile.

People blaming the traders are using the same logic as those who blame gas stations on the price. Yes, they are part of the system, but that doesn't mean they are to blame.

Some people are trying to scapegoat traders for their own political agenda. Mainly to distract from their own failing and contrubution to the problem.

 

[ehall]

Back in the 70s congress prohibited futures trading on onions, and those commodity prices have been far more volatile than other agricultural goods.

Having said that, oil is in a bubble, with people buying into it on the theory that somebody else will buy into it at a higher price later. There is no correlation between price and actual value here, but instead is essentially gambling on the expected future price. This is more or less a ponzi scheme, and is identical to what we saw with tech stocks and housing before. The bubble is screwing the consumer now, and is going to screw the investors when it finally does pop. The govt should figure out a way to pop it as soon as possible, the same as they work to prevent other types of schemes.

Prohibiting futures trading is not the answer though.

 

[Darky]

The newest issue of Car and Driver (I'm pretty sure) has a pretty good article on the "behind the scenes" influences on gas prices. Its titled "Why Everyone is Wrong About Gas Prices".
I think all these people claiming its just political maneuvering to lfit the ban need to go back in time to when people were calling for off-shore or ANWR drilling ten-twenty years ago and were told it won't help us now, why bother? If they had started then, we may have a little relief right now. As it is, we can at least hope to get more oil for the future while companies are continuing to try and refine the new alternative fuels/hybrid tech, etc.

 

[alex22]

no no no, there is no evidence of that. Futures traders actually smooth out commodity pricies. Without them prices would be MUCH more volatile.

People blaming the traders are using the same logic as those who blame gas stations on the price. Yes, they are part of the system, but that doesn't mean they are to blame.

Some people are trying to scapegoat traders for their own political agenda. Mainly to distract from their own failing and contrubution to the problem.

The oil future's traders are not like the gas statioins at all, the stations are given a price per gallon when they want to buy, take it or leave it. The future's traders are driving the price up and reaping a profit for themselves in the procesess. The oil companies are actually geting in on the future's market. Its basically a big game of hot potatoe, at the end of the month you have to take posession of the oil, and if you are the oil company, you already have it and it does not cost you a dime to pay yourself immagionary money, but for the oil that does not go back to the oil companies the price has been inflated by unnessescary middle men. and the price of a barrel is going up now because the traders believe the price will go up in november....

One of the guys I work with was telling me about a good article where an oil futures trader was discribing what they actually do. I will ask him to email me a link and I will post it up. There was also a show on CNN where they were talking about the price on gas and what is causing the rapid increase. They had Enviornmentalists, senators, oil company reps, futures traders and I think some more in the same room discussing it. I'm trying to find a link of the vid or a transcrpit to post up as well.

~Alex

 

[srimes]

The oil future's traders are not like the gas statioins at all, the stations are given a price per gallon when they want to buy, take it or leave it. The future's traders are driving the price up and reaping a profit for themselves in the procesess. The oil companies are actually geting in on the future's market. Its basically a big game of hot potatoe, at the end of the month you have to take posession of the oil, and if you are the oil company, you already have it and it does not cost you a dime to pay yourself immagionary money, but for the oil that does not go back to the oil companies the price has been inflated by unnessescary middle men. and the price of a barrel is going up now because the traders believe the price will go up in november....

One of the guys I work with was telling me about a good article where an oil futures trader was discribing what they actually do. I will ask him to email me a link and I will post it up. There was also a show on CNN where they were talking about the price on gas and what is causing the rapid increase. They had Enviornmentalists, senators, oil company reps, futures traders and I think some more in the same room discussing it. I'm trying to find a link of the vid or a transcrpit to post up as well.

~Alex

The futures market is like the stock market. How are stock prices defined? By what people are willing to pay for them. People buy stock when they think its value will go up and sell when they think its value will go down. The same is true for futures, it's just that they aren't betting on an individual company they are betting on the price of oil. If a trader thinks the price will be worth more in the future than what it costs now he will buy it. The traders think prices will rise, so they are betting that it will rise and the price is going up. If they are right they will make money, if wrong they will lose money as the price drops.

Companies often lock in prices for a year to protect themselves from price increases. It's very similar to futures trading. Say an airline agrees to buy jet fuel for the next year at $3 a gallon. If prices go above $3 the airline has saved (made) money by betting on the future price. If prices drop below $3 the airline has lost money as it is buying for more than market value.

Say at the time of the contract jet fue is selling for $2.75, but the airline thinks prices will rise so agrees to lock in the price at $3.00. This is basically a futures purchase and yes, will help drive todays prices up. But they don't float on their own for long until bubbles pop. The trading price is a symptom, on the cause, of what the product is worth.

 

[Darky]

Also, for every futures trader betting the price will go up, there's one betting it'll go down. There's a loser to every winner.

 

[ehall]

The futures market is like the stock market. How are stock prices defined? By what people are willing to pay for them. People buy stock when they think its value will go up and sell when they think its value will go down. The same is true for futures, it's just that they aren't betting on an individual company they are betting on the price of oil. If a trader thinks the price will be worth more in the future than what it costs now he will buy it. The traders think prices will rise, so they are betting that it will rise and the price is going up. If they are right they will make money, if wrong they will lose money as the price drops.

This is all very cogent and true. However bubbles develop when the future price estimate becomes detached from actual value. It's one thing for stock market prices to be determined from earnings, management, and other indicators of actual value, and something else entirely to buy eBay at $200 because you think the day traders will be buying it for $300 next month. Same with housing--it's one thing to buy real estate because of long-term asset value increase, and another thing entirely to buy because you expect the housing bubble will keep expanding.

Markets stop working when face value becomes detached from actual value. And when the bubble bursts it tends to create a trauma, much the same way that other pyramid schemes turn the last buyer into the first loser. In this bubble we have the extra negative that it is pounding the crap out of unaffected parties, ie the citizenry who have to buy gasoline and fuel oil and have no investment in the oil futures.

 

[alex22]

The basic practice is similar to stock trading, but when apple's stock goes up the price of an Ipod does not. Investors sink money into a company by buying stock and hopeing that the company grows and becomes more and more profitable and so on.... end result, investor thrives with the company or looses big.
The future's traders are in it for a quick profit only, they see the price going up so they buy and sell before the end of the month, its not like the oil companies need extra money to improve their company, they already have plenty. They are also playing the future's game and driving prices up as well.

~Alex

 

[lrainman]

I am no Bush fan but he was far better than the alternative's. Everyone blames Bush but gas prices only really started going up when the DEMOCRATS took control of the house and senate two years ago.

Why are there not many refineries in the us, where does the oil from alaska go now?

 

[kujito]

Also, no-one died when Clinton lied......

Not true. Nobody seems to remember all of the tactical missile launches that were supposed to distract people from Billy-Boy's antics. How do you think we knew EXACTLY how the Tomohawk cruise missile would perform when we went into Iraq? Practice, that's how.

 

[Stihl029]

Why are there not many refineries in the us, where does the oil from alaska go now?

I know It goes to Long Beach, CA. I have done enough escorts of the tankers going in and out of Valdez and the PWS to make me sick even thinking about it. Growing up I would hear and see the tankers moving through Channel Islands in So. Cal only to get stationed at their pick up site. Problem is we have had several times that the pipeline had no flow due to a lack of production. It isn't cheap to send the oil that far; but then again the tankers are usually running on bunker-c so just a step up from crude. Whats really kool is how oil comes from up here, yet I am paying over 5 dollars a gallon for 87 octane. Kinda why my CUCV is parked right now. ok rant through for right now.

 

[Darky]

its not like the oil companies need extra money to improve their company, they already have plenty. They are also playing the future's game and driving prices up as well.

~Alex

As far as I know, it would be illegal for the oil companies to be playing the futures market for oil. Kind of a conflict of interests...that's why it's illegal for say, the CEO of Enron to tel the world all is well while knowing they're going under as he secretly sells off his stocks...

 

[RichP]

Every time the fed prints more fake money the price of oil goes up. The countries that actually own the oil sell it in dollars, if the dollars are worth less they charge more dollars for the same amount of product. It's really as simple as that, the feds benefit from it because it reduces their debt. Shut off the printing machines for a year and we would see prices come down as the dollar became scarce. If we ever went back to the gold standard this country would be bankrupt overnite.

 

[Ray H]

Every time the fed prints more fake money the price of oil goes up. The countries that actually own the oil sell it in dollars, if the dollars are worth less they charge more dollars for the same amount of product. It's really as simple as that, the feds benefit from it because it reduces their debt. Shut off the printing machines for a year and we would see prices come down as the dollar became scarce. If we ever went back to the gold standard this country would be bankrupt overnite.

The Fed should start printing foreign money. Problem solved.

 

[Darky]

Ya know what, I like the way you think! Let's devalue someone else's money damnit! We've helped enough people and countries for a while

 

[alex22]

As far as I know, it would be illegal for the oil companies to be playing the futures market for oil. Kind of a conflict of interests...that's why it's illegal for say, the CEO of Enron to tel the world all is well while knowing they're going under as he secretly sells off his stocks...

Just remember that some oil companies are actually owned by foriegn countries and our laws do not apply to them, they know we need the oil and will continue to smile while driving the price up.

~Alex

 

[8Mud]

SAN FRANCISCO: Reagan has his highways. Lincoln has his memorial. Washington has the capital, and a state, too. But President George W. Bush may soon be the sole president to have a memorial named after him that you can contribute to from the bathroom.

From the Department of Damned-With-Faint-Praise, a group going by the regal-sounding name of the Presidential Memorial Commission of San Francisco is planning to ask voters here to change the name of a prize-winning water-treatment plant on the shoreline to the George W. Bush Sewage Plant.

The plan - hatched, naturally, in a bar - would place a vote on the November ballot to provide "an appropriate honor for a truly unique president."

Supporters say that they have plenty of signatures to qualify the initiative and that the renaming would fit in a long and proud American tradition of poking political figures in the eye.

"Most politicians tend to be narcissistic and egomaniacs," said Brian McConnell, an organizer who regularly suits up as Uncle Sam to solicit signatures. "So it is important for satirists to help define their history rather than letting them define their own history."

 

[Darky]

Yeah, I read about that. I think its kinda stupid and petty. But then it is San Francisco, beautiful city populated almost entirely by retards...

 

[RichP]

Just remember that MOST oil companies are actually owned by foriegn countries and our laws do not apply to them, they know we need the oil and will continue to smile while driving the price up.

~Alex

Fixed

 

[alex22]

Fixed

Thanks:cheers:

I knew a few were but wasnt sure if it was the majority or not.

~Alex