bitman
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http://www.associatedcontent.com/article/7795778/pills_in_the_nescafe_claim_just_one.html
I said it was complex... not that I didn't have a fair grasp.damnyankee said:The driver of gas prices in America aren't complex considering the US DOE's website states we get the majority of our oil from Canada and Mexico. Libya's oil only accounts for only 2% of the global supply and nearly all of that goes to Europe.
Yup... the king also cut short his medical sabbatical outside the country (disc problems) to be home and calm down his peeps. He also handed out some $35B (in social, unemployment and housing benefits) to help smooth his welcome home. He's no fool, but isn't home free yet, and he's old, so that is just a matter of time before we have to deal with succession there.Secondly, the King of Saudia Arabia has increased production to match the 20% loss from Libya yesterday and has pledged to increase production to match losses from Libya.
Actually yes... In case nobody has noticed, we the biggest oil pig in the world still have near 10% unemployment and a barely growing economy. The rest of the world gets pnuemonia, when we catch the sniffles... because we are the super consumers, of energy and whatever. So world demand is off.. While the developing nations are trying to catch up we have a huge ass head start.Thirdly, the world is currently awash in oil and storage is at full capacity.
As two oil experts on FoxNews stated a few weeks ago: "With all the oil on the market and in reserves, oil should be $40/barrel and gasoline should be $1.49 a gallon; it's the oil speculators bidding it up."
So....I don't see the complexity here. ??? ??? ???
living sounds said:Since the Great depression there were laws in place to keep outside speculators out of the commodities futures trading. Then in 1991 Goldman Sachs got a waiver thet allowed them access to that market, a few other firms followed. In the late 90s Clinton signed the Financial Services Modernization Act of 1999 and the Commodity Futures Modernization Act of 2000 into law, legislation that was pressured by Wall Street and the infamous Greenspan, finally getting rid of the depression-era legislation.
After that even sensitive long-term investments like pension funds were lured into the commodities market, exploding the prices. All this speculation made especially oil exporting countries so rich, they started souvereign wealth funds in the mid 00s, and now those funds are speculating in the commodies market, helping drive up the prices again. Quantitative easing supposedly plays a role, too.
There appear to be efforts now to build up new regulations to stop the bubble cylcles from happening again:
http://www.huffingtonpost.com/2011/01/18/cftc-commodity-speculation_n_810191.html
JohnRoberts said:The Huffington post... not my idea of a balanced news source (she just got a nice pay day for selling, so lots of love from that side of the political spectrum).
JohnRoberts said:You still don't accept the value in letting markets set prices. Speculators provide liquidity to the market and information about future expectations. The price is high, because people think it will be higher in the future. If they thought it would be lower they would be dumb asses, to buy it when it's high. They only make a profit by selling it to somebody else for more... While the oil producing nations (like OPEC) do benefit from generally higher prices but that's a different animal.
living sounds said:JohnRoberts said:The Huffington post... not my idea of a balanced news source (she just got a nice pay day for selling, so lots of love from that side of the political spectrum).
It's a Reuters article which just happened to be mirrored at the HuffPo. I've seen way too much bullSh*t on her site to view it as a reliable news source. The liberal news source with good fact checking would be the Rachel Maddow show.
JohnRoberts said:You still don't accept the value in letting markets set prices. Speculators provide liquidity to the market and information about future expectations. The price is high, because people think it will be higher in the future. If they thought it would be lower they would be dumb asses, to buy it when it's high. They only make a profit by selling it to somebody else for more... While the oil producing nations (like OPEC) do benefit from generally higher prices but that's a different animal.
Nothing wrong with speculation per se. The original commodities trade as set up by the FDR administration explicitly relied on speculators for stabilizing the system. What was different since 91 and especially in the last decade was the access of outsiders to the commodities futures trade. That's where the problem lies, and that's where the bubbles came from. The legislation I quoted earlier opened the commodities trading casino with all the consequenses we see today. The imminent crash of the housing bubble in 2007 also led to investments being shifted to commodities, further fueling the commodities bubbles.
All of this is detrimental to the "real" economy, which relies very much on commodity availibility at affordable prices.
JohnRoberts said:"Outsiders"? Please be more specific. Who are these mysterious outsiders buying oil futures? If there was some mysterious group buying oil, how does this make it only go up... Since they eventually have to take delivery of the oil, or settle out options contracts, if it isn't worth what they paid, they lose their shirt....
living sounds said:JohnRoberts said:"Outsiders"? Please be more specific. Who are these mysterious outsiders buying oil futures? If there was some mysterious group buying oil, how does this make it only go up... Since they eventually have to take delivery of the oil, or settle out options contracts, if it isn't worth what they paid, they lose their shirt....
Institutional investors, which are usually long-term low-risk. They weren't able to buy commodities under the 1936 legislation, only the designated speculators and the people actually involved in the respective businesses could do that. So the price changes pre-2000 or so mostly reflected actual supply and demand. Then the investment banks got their way and made huge profits in fees and margins off the pension funds and similar sources investing in the commodities, buying and re-selling, and re-buying in what is actually a pretty complicated scheme. That's the insanity of it all, since once the bubble popped (which as you pointed out inevitably had to happen) those institutional investors lost huge amounts of money. By that time Goldman and others had made spectacular profits with their schemes. If you look at all the commodities together, the fact that 2005 commodity index funds were where the market turned to after the housing market in the US started to peak, in light of the actual supply and demand, it is obvious that speculation plays the central role. There is evidence that it may have significantly contributed to the recession, too.
What all this means is that laws should be changed back so that speculators who don't actually need or supply commodities stay out and don't drive up the prices beyond actual supply/demand.
ruffrecords said:Does anyone else think it is strange that these rebellions all seem to have happened at much the same time and in much the same way all along the North African coast? Seems too much of a coincidence to me. Are there some external forces at work here?
Cheers
Ian
living sounds said:Central planning did happen, but it happened at Goldmann and the other big firms. They put all their manpower behind the effort to make huge amounts money off the rest of the people while not getting procesecuted - and suceeded. Burning down the house for insurance mafia-style.
I just watched the documentary that won the Oscar yesterday, it shows some of the things Taibbi is outlining in his book very well, too. At this point I'm really glad I don't live in the United States, since I don't see a way out of the mess with the political system the way it is. It's a mystery to my why Obama put Summers, Geithner and all the other collaborators in charge. Probably because of campaign contributions? Anywhay, When the rest of the world tried to regulate some of the worst excesses, the Obama administration declined...
BTW, one reason why Greece got away with their financial fraud for so long is because they employed Goldman to fudge their papers. It sure is an interesting age we live in...
JohnRoberts said:The big investment banks also lost big... so the suggestion they engineered the disaster on purpose is nonsense. The bail-out, that kept them mostly intact is not going to change anything. If they are still too big to fail, they may be too big to regulate... They need to be broken up, not regulated more, by incompetent government suits.
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