Congress Pursues $80 Oil With Trading Limits, Disclosure Rules : from Bloomberg

I don't think I will bother with the US markets anymore. I am short oil and benefit from this but the level of Government interference in the markets is not acceptable. You just don't know what these IDIOTS are going to do next.

I watched a profitable position go into loss because of Bernanke and his save the banks balance sheets/rich mans portfolio rate cuts. Oil went from $100 to its high due to Bernanke bailing out the I Banks and indirectly the hedge funds withy Fed lending to them and further rate cuts. Thats right folks, oil went to $140 so that LEH would not have to close.
 
it's both.

speculation, interest rates, AND rising demand.


triple whammy.

one culpit out--speculation


Quote from achilles28:

Yep. Funds and Investment Banks trade offshore. Little guys get screwed.

Whose upping prices? The piker retail spec? Or the vast sea of pension, hedge and investment funds?

This is window dressing.

All this speculation would end quite abruptly if the FED increased margin from 2% to 7%. Its not specs or funds, its interest rates...
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Quote from kickboxers:

it's both.

speculation, interest rates, AND rising demand.


triple whammy.

one culpit out--speculation
More...

Rising oil demand is overstated.

Oil demand is growing at roughly 4%, year-on-year.

Price-in the extinguishment of a finite resource - add another 3% (maybe).

Thats around 8% per year. Generous.

Since the 2007 bottom, oil should be at 60$, fundamentally speaking. We're now at 125$ (150%).

The same event that triggered the housing bubble is the same event that triggered the commodity bubble - too much money.

Money is far too cheap and these wild swings in equity, RE and commodity markets always result.

Speculation (both long and short term), is curbed through reasonable borrowing costs.

Most funds can't beat the S&P. After risk premium is considered, most private wealth exit markets at 7-8% T-Bill return.

What happens to all those funds responsible for this "frenzied speculation"? Gone tomorrow.

This is a Monetary Problem. Speculation is just a convenient patsy Congressional Schmucks sacrifice to their frothing - yet stupefied - electorate. Its about votes and perception. Not doing something that actually works...

And btw, speculation has not been curbed in any effective way (not that it should be).

Funds, Pensions, Hedges and IB's will continue to trade crude off shore.

That will do nothing to curb speculation. Futures is a global market. It defies control.
 
Quote from Mvic:

The only thing this will accomplish in the long run IF it passes is for oil producers to depeg their currency from the USD (probably would happen eventually anyway but this will speed up the process). This in turn will mean HIGHER oil prices for us in the US, a weaker USD (ie higher prices of everything else as well), add to inflationary preasures and the trade deficit, increase interest rates, and weaken the position of US financial markets further, other than that it is a kick ass idea. The politicians are really earning their pay this year, maybe we should double it if they all promised to just go home for the remainder of their term.
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yep.. great success!(©Borat) for Ahmadinejad
 
Quote from ang_99:

What cracks me up is that every credible finance/econ. guy , bernanke, buffet, pickens, etc.. say that speculation has next to nothing to do with oil prices but that seems to go through one ear and out the other.
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Add to that list the International Energy Agency.

They released their assesment a few weeks ago or so - and they made the same point as nutmeg's link. Many commodities with no futures market have experienced sky rocketing price increases as well.

I know this to be true empirically. Last summer I purchased some cast iron dumbbells. Cost me 40 cents/lb. This summer, I went to buy some more. The same shit is now 95 cents/lb.

There is no futures market for cast iron, and I am pretty sure there is no arbing between the physical cast iron market and the copper futures market or whatever.

A friend of mine who is in the shipping business just shakes his head when he reads about all of this.

"What these politicians need to do is have their econ guys check out the dry bulk (i.e., non-petroleum items like grain and iron ore and etc.) shipping rates to China. They have been going nuts since 2004."

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=amE8k7svJClk

The company mentioned in this link plans to quadruple their shipping fleet because of China's commodity demand. Guess they didn't get the memo that it is all just "an illusion" caused by "magic speculators" who can control both the prices of exchange traded commodities AND stuff that doesn't even trade on futures exchanges.

Like cast iron.

And onions.

Oh, the power ...
 
According to the latest "The Sun" magazine I was perusing at my local supermarket today, Nostradamus predicted that Bush would veto any laws curtailing oil speculation, so don't worry bulls!
 
Quote from Mvic:

The only thing this will accomplish in the long run IF it passes is for oil producers to depeg their currency from the USD (probably would happen eventually anyway but this will speed up the process). This in turn will mean HIGHER oil prices for us in the US, a weaker USD (ie higher prices of everything else as well), add to inflationary preasures and the trade deficit, increase interest rates, and weaken the position of US financial markets further, other than that it is a kick ass idea.
More...

Bingo! Good analysis. Now it makes more sense why this seemingly idiotic witchhunt for speculators is actually gaining traction. Might be the final nail in the coffin for the dollar.


The politicians are really earning their pay this year, maybe we should double it if they all promised to just go home for the remainder of their term.
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They are just doing what they were put in place to do. Most of them do not have a clue and are strung along by those who do.
 
So much for "Free Markets".

Bail out the banks, bail out the brokerage houses, bail out the asswipe homeowners who bought a $800,000 dollar house with $45,000 a year salary, START enforcing the naked short sale rule on select financials after hedge funds have used it to put countless small companies out of business, etc, etc,.

I'm going to start trading the Chinese markets. Much less government interference there.

:mad:
 
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