Boone Pickens & Those Stealing From Consumers (& Investors/Traders) Should Be Hung

[dont]

Daal; pension funds are anything but price sensitive, all they know is that commodities are out performing finicial stocks at present and their members are screaming at them because the asset managers are all down 12% from the highs, but gee Bill up the road has made a fortune in commodities, so why are we not invested in commodities.

Decision made, lets put a few hundred million into a commodity fund, fund gets hit with cash, fund has to put it to work or risk not tracking the index.

Of coursse the same applies in the reverse.

 

[HUPThereIt Is]

Quote from dont:

Artificial demand means they do not want to consume the commodity, they believe commodities are an asset class, as index trackers they need to buy as money comes into their funds. If Oil is going up they and they have a lot of cash flowing into their fund, they have to buy, basically they are price insensitive. Hence "artificial demand"

By the same token they will take it too low on the downside as people withdraw funds and they are forced sellers thus creating "artificial supply" The producers of commodities hate index trackers because they damage the end user market. High oil prices force users to find alternatives, for example swap your SUV for a hybrid, in the long term its not good for the producers. Better to sell a lot of oil at $100 than a bit at $135 and then a lot at $50.

If all this "artificial demand" is driving the price artificially high, why is there not a dramatic drop in price as funds etc. rollover?
Or are they actually taking delivery and storing 42 gal drums of oil in their basement?

 

[ttowntrader]

Most here keep fighting oil all the way up saying its manipulated and can not go higher. You have obviously been wrong, so adapt and move on. The so called commodity bubble doesn't look like much of a bubble on a year chart.

Our currency may or may not be in the process of being debased, but it clearly will not have the value it once did for the next century. The fed can talk all they want about the value of the dollar, but its hogwash without actions, and I find their words laughable.

What reason do you have to think price is artificially high rather than being artificially low in the past?

What's going to happen when barrels of oil are no longer priced in dollars?

 

[ByLoSellHi]

Quote from Cutten:

No, it isn't. Theft is taking someone's property without their consent. Speculation on oil involves purchasing someone's property with consent on both sides, at an agreed price & time.

Using the violence of the police power to curb free trade in oil between consenting parties - i.e. what you are advocating - is far closer to theft than even the most rank speculation.

Just in case you still aren't aware - US consumers don't own the oil. U.S. business (apart from the oil companies) don't own the oil. It is not their property. They have NO right to it whatsoever, unless the owners of the oil choose to sell it to them voluntarily.

Thus, not only is oil speculation nothing remotely resembling theft, not only would any attempt to cap the price be tantamount to theft, but the alleged wronged parties have no right to the oil and thus have not been wronged in any way whatsoever.

Which pretty much blows all your arguments out of the water.

If certain US business and consumers chose to take a gigantic open-ended price risk by failing to hedge their future oil consumption, then that is their responsibility and they should bear the consequences, not use violent force to impose it on those with better foresight and the balls to back it with real money.

Whether you agree with him or not, Soros is brilliant.

He basically stated today that oil has become an "asset class" that institutional investors have piled into, overwhelmingly on the permanently long side (by renewing contracts rather than letting them expire), and that this has and will continue to lead to a bubble, and that certain asset classes, such as oil, become inefficient and distorted when you have such fundamental shifts.

Not only is oil a bubble, with institutional investors soon to be burned (that's not the damaging part), oil is the lifeblood of the international and American economic machinery, and it is too important to allow artificial bubbles to form around it, based on herd mentality, because it impedes basic economic efficiency.

Oil at 100+ prices has caused significant fundamental damage to our economy.

The fact that there is no shortage of oil, that oil consumption has grown by 3% in the last year, yet the price of oil has increased 100% in the last 11 months, and that this is a provable fact, demonstrates the inefficiency of the oil markets, and the need for tighter regulation.

The 'theft' attribute comes into play because the money made by speculators who have no fundamental desire for the basic commodity (oil), and who do not plan to take delivery of it, but whose purchasing of future contracts, on top of what is now becoming more clear that players have actually lied about actual levels of crude oil in storage (understating the inventory), thus driving up prices in an artificial fashion, certainly fits the description of theft, as it directly leads to consumers paying a higher price than true supply/demand levels would otherwise dictate.

 

[ScottD]

Quote from ByLoSellHi:

Whether you agree with him or not, Soros is brilliant.

He basically stated today that oil has become an "asset class" that institutional investors have piled into, overwhelmingly on the permanently long side (by renewing contracts rather than letting them expire), and that this has and will continue to lead to a bubble, and that certain asset classes, such as oil, become inefficient and distorted when you have such fundamental shifts.

Not only is oil a bubble, with institutional investors soon to be burned (that's not the damaging part), oil is the lifeblood of the international and American economic machinery, and it is too important to allow artificial bubbles to form around it, based on herd mentality, because it impedes basic economic efficiency.

Oil at 100+ prices has caused significant fundamental damage to our economy.

The fact that there is no shortage of oil, that oil consumption has grown by 3% in the last year, yet the price of oil has increased 100% in the last 11 months, and that this is a provable fact, demonstrates the inefficiency of the oil markets, and the need for tighter regulation.

The 'theft' attribute comes into play because the money made by speculators who have no fundamental desire for the basic commodity (oil), and who do not plan to take delivery of it, but whose purchasing of future contracts, on top of what is now becoming more clear that players have actually lied about actual levels of crude oil in storage (understating the inventory), thus driving up prices in an artificial fashion, certainly fits the description of theft, as it directly leads to consumers paying a higher price than true supply/demand levels would otherwise dictate.

BLSH, you are one dumb fuck. Where were you educated for crissakes.

 

[ByLoSellHi]

Quote from ScottD:

BLSH, you are one dumb fuck. Where were you educated for crissakes.

That's a fantastic, intelligent and really compelling response.

Your specific reference to the numbers cited in the original article is especially illuminating.

The one thing the oil bulls all seem to ignore are that actual numbers involved in the story of the supply/demand situation with crude oil.

It's almost as if they're avoiding the actual statistics intentionally.

As to my general thesis about the damage the (artificially high) price of oil is doing to the U.S. economy:

Direct quotes for Soros:

Soros laid some of the blame on recent oil price rises on commodity index funds, which only buy oil contracts, helping to push prices higher.

Not `Legitimate'

``Commodity indexes are not a legitimate asset class,'' he said. He added that raising margin requirements would not affect index trading but could function to limit speculation.

``The rise in oil prices aggravates the prospects for a recession.''

http://www.bloomberg.com/apps/news?pid=20601213&sid=aMUH3KgAlIfc&refer=home


But you're probably sharper than Soros. You're certainly more eloquent.

 

[ttowntrader]

Does anyone think Soros may have his own motives?

 

[ByLoSellHi]

Quote from ttowntrader:

Does anyone think Soros may have his own motives?

He certainly may.

That wouldn't necessarily invalidate the accuracy of his testimony or public statements, however.

You raise a great point, though. He was testifying under oath, I believe. Therefore, a logical initial question of him would be whether he had any positions regarding crude oil at the current time.

 

[makloda]

Quote from ByLoSellHi:
Oil at 100+ prices has caused significant fundamental damage to our economy.

I am sure the US has the collective prayers of the entire Arab OPEC world on their side, just like how the US was concerned about the economic well-being of the oil exporting nations when crude was trading at $10.

Poetic justice.

 

[Cutten]

Glad to see you admit it isn't "theft" at all. As for whether the consumers and "economy" are getting ripped off:

As I mentioned in previous posts, consumers of oil have no more moral right to own oil than investors in oil do. Both are seeking personal profit through the oil market. Investment is no less legitimate an activity than consumption. For every $1 consumers gain from a fall in oil prices, that comes right out of the pocket of owners and producers of oil. I fail to see how oil consumers have *any* claim that they are owed oil at a certain price of their liking. After all, it was not oil consumers who risked trillions of dollars exploring for oil, refining it, and spending on infrastructure and transportation to extract it and deliver it to the market. It was the oil companies who did that.

If there was no shortage of oil, prices would be massively lower. Why wouldn't the owners of the oil sell every barrel they had at such inflated prices, realising once in a generation windfall profits?

The only people with the right to oil are its owners. If speculators become the owners, through voluntary transactions in a free market, then they have the right to hold onto it or offer it at the price of their choosing. They put up the cash, they take the risk, hence they get the reward. That's capitalism, not theft. Freedom and choice, not government-imposed price-rigging and violent force. Don't like the high oil price? Don't buy oil then. If you chose a lifestyle where high oil/gasoline/energy consumption has a massive impact on you, then that's your tough sh*t for being a greedy, polluting, irresponsible rich 1st world spendaholic. Oh noes, you might have to forgo your 12mpg SUV? My heart bleeds for you.

Quote from ByLoSellHi:

Whether you agree with him or not, Soros is brilliant.

He basically stated today that oil has become an "asset class" that institutional investors have piled into, overwhelmingly on the permanently long side (by renewing contracts rather than letting them expire), and that this has and will continue to lead to a bubble, and that certain asset classes, such as oil, become inefficient and distorted when you have such fundamental shifts.

Not only is oil a bubble, with institutional investors soon to be burned (that's not the damaging part), oil is the lifeblood of the international and American economic machinery, and it is too important to allow artificial bubbles to form around it, based on herd mentality, because it impedes basic economic efficiency.

Oil at 100+ prices has caused significant fundamental damage to our economy.

The fact that there is no shortage of oil, that oil consumption has grown by 3% in the last year, yet the price of oil has increased 100% in the last 11 months, and that this is a provable fact, demonstrates the inefficiency of the oil markets, and the need for tighter regulation.

The 'theft' attribute comes into play because the money made by speculators who have no fundamental desire for the basic commodity (oil), and who do not plan to take delivery of it, but whose purchasing of future contracts, on top of what is now becoming more clear that players have actually lied about actual levels of crude oil in storage (understating the inventory), thus driving up prices in an artificial fashion, certainly fits the description of theft, as it directly leads to consumers paying a higher price than true supply/demand levels would otherwise dictate.