Posted on 06/01/2007 8:05:41 AM PDT by george76
We're from the government and we're here to help you.
Can you explain why your “Calculator” is about 200% off when I use it to check the price of gold in 1967 vrs now?
Because the price of gold has gone up since 1967 even when you factor in inflation?
That’s what you think.
Plenty of high rollers are playing the oil futures game because so many have struck it rich. You want me to believe that the winnings only come out of other player’s hides, not out of the pockets of consumers at the pump.
I refuse to buy it.
So explain, step by step, how a speculator buying an oil futures contract raises the cost for the consumer at the pump.
“Wanna bet that this peak gas price won’t be followed by a proportionate drop to $2.34 per gallon?
Yes, I will take that bet. The average price per gallon will be less then $2.34 on Oct 1st 2007.”
Your’s is a bet I would be happy to lose.
Thank you but NO.
Absolutely.
I made this point the other day on my show when the TV station mistakenly reported a refinery on fire. It caused an increase temporarily in oil of 40 cents. SPECULATORS drive the price of oil.
http://talkshowamerica.podomatic.com/entry/2007-05-31T08_59_27-07_00
http://www.talkshowamerica.com/2007/05/web-site-error-sparks-increase-in-oil.html
Commodity markets do not need speculators never intending to take delivery operating in them. The gasoline supply to demand market will operate just fine without them.
But they are in markets, why? Obviously to make money right? One must assume overall they do make money, and if they do where does the money they make come from?
Since the market doesn’t need them to function but they are there and making money they their speculation has to inject additional costs into the supply -> demand flow.
If these speculators do not inject extra costs (like an additional middle man) that can only mean they are not making money. Since we already know that isn’t the case non-delivery speculation logically has to add cost for the consumer much like a tax or extra middle man would.
The only logical case one could make for non-delivery speculation not adding cost for the consumer is if without them the product price would be higher.
I have never seen anyone make a logical case proving that to be true.
It looks simple to me - non-delivery speculation adds cost for the consumer it has to - if they actually make money.
5. At present prices, combined federal and state government profit (i.e. taxes) on each gallon of gas is 28-68 cents a gallon, depending on which state you live in. Pelosi’s San Francisco enjoys tacking on an extra 26 cents bite.
Always worth repeating.
You are correct. The market does not need speculators.
The gasoline supply to demand market will operate just fine without them.
The market will be less liquid and spikes will be larger.
Since the market doesn’t need them to function but they are there and making money they their speculation has to inject additional costs into the supply -> demand flow.
Perhaps you'd explain how they inject additional costs?
If these speculators do not inject extra costs (like an additional middle man) that can only mean they are not making money.
Comparing a speculator to a middle man shows you don't understand how the markets work.
Since we already know that isn’t the case non-delivery speculation logically has to add cost for the consumer much like a tax or extra middle man would.
Then explain it, logically.
It looks simple to me - non-delivery speculation adds cost for the consumer it has to - if they actually make money.
Some speculators make money, some lose money.
Toddsterpatriot”You got one right! Did you ask your mommy? Actually, in the long term, as a group, they’d lose money because of brokerage fees, exchange fees and other charges.”
gas0linealley “Plenty of high rollers are playing the oil futures game because so many have struck it rich. You want me to believe that the winnings only come out of other player’s hides, not out of the pockets of consumers at the pump.”
Toddsterpatriot “So explain, step by step, how a speculator buying an oil futures contract raises the cost for the consumer at the pump.”
If it is true non-delivery speculators neither add nor subtract from the cost to the consumer but only add and subtract from each other - and lose money in the long run because of brokerage fees, exchange fees and other charges, why do they do it?
Sounds pretty stupid to me - for the losers anyway.
And why should these non-delivery speculators involve commodity markets at all in their non-delivery speculation?
They should start their own money churning group separate from markets. Las Vegas sounds like a good place for a venture like that.
Does this mean you won't be explaining how they add a cost to the market?
Sounds pretty stupid to me - for the losers anyway.
Yes, the losers feel stupid.
And why should these non-delivery speculators involve commodity markets at all in their non-delivery speculation?
There are 2 ways to speculate on oil, physical delivery market and futures market. The futures market is deeper and cheaper.
They should start their own money churning group separate from markets.
The speculators created the futures market, silly.
If it doesn’t I will be joining the ranks of the “It is a conspiracy†crowd. It should drop that much because we will be off these stupid “summer gas blends†and the summer driving season will have past but the winter heating oil season will not be upon us. Baring something like US nuking Tehran Sept 20th, there should be no structural reason for the price per gallon to be over $2.34 a gallon on Oct 1 2007
Would you have us believe that there is no connection between the price of oil on the futures market, and what is actually paid by the consumer, at the pump?
“The speculators created the futures market, silly.”
Why so they could churn and burn each other?
Or so brokerage houses could leech off of them?
Maybe it’s time to shut non-delivery speculators down.
Remember Amaranth fiasco?
Before that specilative bubble burst gas prices were high weren’t they - adding cost for the consumer- and after it burst the fund lost how many billion? Who paid for that loss? The non-delivery speculators involved?
The reality is that that non-delivery speculation ended up costing a lot of people outside the circle of non-delivery speculators. You going to deny that?
I read a quote by someone “personally acquainted” with Brian Hunter;
“The financial markets aren’t really like a casino... but Brian treated them like they were.
Like I said start a venture in Vegas where these guys can churn and burn each other and leave the rest of us out of it.
I know Amaranth was trading natural gas so don’t jump me about that.
Yes and other market participants.
Or so brokerage houses could leech off of them?
You bet.
Maybe it’s time to shut non-delivery speculators down.
Go right ahead. If you want to make the market less efficient.
Remember Amaranth fiasco?
You mean the speculator who lost $6 billion? Don't tell gas0linealley, he thinks all speculators make money.
The reality is that that non-delivery speculation ended up costing a lot of people outside the circle of non-delivery speculators.
Like who?
Like I said start a venture in Vegas where these guys can churn and burn each other and leave the rest of us out of it.
Tell you what, if you don't like the futures market, don't trade futures.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.