Recent content by mtzianos

That's exactly the problem with the oil futures market, it's not "physically settled" in the sense you're assuming, like e.g. gold or copper etc are. The Light Sweet Crude types eligible for delivery are in shortage (one might say on purpose), which is why the market is so easy to corner...

Quite understandably, when price of any product rises, people assume that demand is running amok. The main culprit here is a market which is being cornered. Due to lack of (meaningful) physical arbitrage, we have an asymmetric market: e.g. oil might rise 10% on "fears of supply disruption due...

Oil price discovery mechanism via the futures is flawed, as there can be no meaningful arbitrage between physical and futures (unlike e.g. natgas, which is why on a energy-equivalent basis, natgas is now 40% cheaper than oil, a situation which has never persisted in the past). The financial...

IMHO China is also subsidizing a massive know-how / technology transfer from US / EU, by actually allowing its workforce to be exploited in the situation you described. In a sense, China is sacrificing today for a better tomorrow. On the other hand, US (and to a point EU) are cashing out the...

The items you quote can all be traced back to Japan's (near) zero rate policy. Basically, Japan's policies (free borrowing in Yen coupled with "guarranteed" steadily declining Yen) are creating the conditions which fuel asset bubbles around the world and all the imbalances in the real...

Ubertrader, I'm not so sure how much effect the "Barrons reading individual investor" has over the markets. I had the impression that the markets are moved by the "leveraged speculator" group, i.e. hedge funds and IB prop desks, the same people who brought you 70+/bar oil, $15/Mbtu nat.gas...

Here is a relevant comment by John Succo: -- John Succo at Minyanville. Professor Succo asks and answers the question: Is the rise in short interest really a bullish occurrence? To answer that question one must understand why short interest has been rising. So... What's Really Affecting...

I'm floored that all these economists, reporters, industry experts etc, including pro traders in ET, keep "analyzing" why oil price doesn't fall in a well-supplied market, but don't speak out CLEARLY and LOUDLY about THE OBVIOUS: the BROKEN PRICE DISCOVERY MECHANISM. The light sweet crude oil...

Rogers etc are just talking their book. As he receives royalties income when people put money in long-only commodities funds that track his "index". Oil is a market with a BROKEN PRICE DISCOVERY MECHANISM (sortof like pricing cash $SPX off GOOG's single-stock-futures, it's crazy I know!)...

Hmmm, but the Federal Reserve isn't the "root of all evil" as this documentary seems to present them (I watched the first 15min). To quote Hussman (an I fully agree): "Remember that the Fed does nothing except determine whether government liabilities will be held by the public in the form...

I would like to suggest that people spend a few minutes to check the facts about how the oil market works (what is the role of LSC etc) and what the current supply/demand situation is. With the exception of a period in 2004 due to a spike in demand from China (along with a spike in "demand"...

Oil is simply a cornered market, with a broken price discovery mechanism. No need for intervention, just initiating contracts for oil types which represent a broader % of physical production would suffice. For some people, gold is an alternative to fiat currencies, so its future depends on...

Basically it's simply a broken pricing mechanism (at least compared to every other market I know, stocks or commodities). Since there can practically be no arbitrage between futures and physical market (as the types of crude eligible for delivery represent minimal % of production), oil...

So, to talk about the analogy, the price of wheat is going up because of bakery bottlenecks? Well, not quite, it's because of the broken pricing system, which prices everything off LSC, which is the type "in scarcity" (real of artificial) while we're awash in heavier crudes. If LSC...

Yes, RSS would be a great feature.