Crude Oil Drops 40%...

T

TT1

A coordinated effort by the Fed and Finance ministers around the World requiring Futures Exchanges (nymex and others) to raise the margin requirements from 5% to say 30-50% of the nominal contract value would help take the speculative bubble out of this market. Crude Oil would fall 40-50% in short order!!!

Currently, it only take $5,250 in margin to control 1 contract at the NYMEX.

Raise margin requirements, see Crude Oil drop!

Yes, it would hurt the Exchanges as far as volumne is concern, but come on, all these guys have being making obscene amounts of money the past 7 years!!!
 
Ban oil, increase margins. What about the free market? So what if oil goes to 150, at least then people will go off the oil.
 
Oh great, another financial genius. How do you know that raising the margin requirements on oil to 50% from 5% wouldn't force all the shorts out and jack the price up 100%.
 
I believe in free markets.

However, when you only required to put up 5 % of the contract value as collateral and there are billions of dollars around the world chasing opportunities... you get asset bubbles. Is that too hard for you to understand?

Temporary raising margin requirements on Crude Oil, Gold, Grains etc... would take the speculative bubble out of these markets!!!

Thats exactly what was needed in 1999-2000 in the US Equity Markets, but instead Greenspan raised short term interest rates killing the whole economy.
 
Doesnt anyone remember the 1980 Silver Market that the Hunt Brothers controlled. Comex raised margin requirements, Prices dropped and the Hunt bros. were history!!!
 
Quote from TT1:

Doesnt anyone remember the 1980 Silver Market that the Hunt Brothers controlled. Comex raised margin requirements, Prices dropped and the Hunt bros. were history!!!
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I was born in 80..is that when the rumor was going around they were buying up all the silver?
 
Quote from nyxtrader:

I was born in 80..is that when the rumor was going around they were buying up all the silver?
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Yes, at the beggining of 1979 Silver was around $6 per ounce and by Jan 1980 it reached a high of 41.50 per ounce.
 
Quote from TT1:

I believe in free markets.

However, when you only required to put up 5 % of the contract value as collateral and there are billions of dollars around the world chasing opportunities... you get asset bubbles. Is that too hard for you to understand?

Temporary raising margin requirements on Crude Oil, Gold, Grains etc... would take the speculative bubble out of these markets!!!
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Total nonsense. Do you really believe that the cash market prices for crude oil, gold and grains will collapse because futures margins are jacked up? You are also ignoring the fact that every long contract in the futures markets has to have someone short the same contract. How are the shorts going to maintain downward pressure on prices with jacked up margins?

You sound just like the idiots that banned futures trading in a particular commodity years ago. And the reason that futures trading in that particular commodity was banned was because prices were too low, not too high. Do you even know what commodity it is that it is illegal to trade futures on in the USA? Do you think that banning futures trading in that particular commodity has helped that cash market?

Liquid markets with free and open price discovery are the only way to properly establish prices.
 
Quote from jeb9999:

Total nonsense. Do you really believe that the cash market prices for crude oil, gold and grains will collapse because futures margins are jacked up? You are also ignoring the fact that every long contract in the futures markets has to have someone short the same contract. How are the shorts going to maintain downward pressure on prices with jacked up margins?

You sound just like the idiots that banned futures trading in a particular commodity years ago. And the reason that futures trading in that particular commodity was banned was because prices were too low, not too high. Do you even know what commodity it is that it is illegal to trade futures on in the USA? Do you think that banning futures trading in that particular commodity has helped that cash market?

Liquid markets with free and open price discovery are the only way to properly establish prices.
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Jebbhead, you are the idiot!!! What I am talking about is "Collateral" put up against the postion either long or short! where have you been the last few years? Credit Markets, Residental Real Estate are "de-leveraging" !!! Do you understand that?

If you have to put up more money as collateral, whether its real estate, futures, or stocks you are more likely to own/trade less of what you have interest in. Do you even understand simple Supply/demand economics? I think not!

How is raising margin requirement an all out ban of futures trading? Its not, its simply more money as collateral to own a contract either long or short!
 
I don't have any more time to try to educate the uneducatable.

You can rant and rave your nonsense without any more comments from me.
 
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