Thread: This Is Not A CraigsList Notice

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Originally Posted by jerry clayton

I thought this was a joke forum---

The jist of my post is that---why does wall street have anything to do with this besides trading stock in the oil COMPANIES???? not a futures market to manipulate the pump prices--The oil companies should have the wells, pumps, tankers--trucks/rail cars/pipe system to get the crude to the refinery and the refined products to their stations---

Why are wall street ers mading extra money on the fuel I buy at say a Shell station, that was from a Shell owned well and refinery????

Unfortunately - it isn't just Wall Street as many, if not most are off shore speculators, with London, Hong Kong and other foreign commodity markets doing much of the price fixing/gouging.

And to expand on Dave's comment, keep in mind that our domestic oil companies only have direct sway over less than 10% of all the crude used in the world on a day to day basis. Somehow we have this notion (well, it's not a "somehow" it's the result of intense propaganda) that the US oil companies control everything that happens with petroleum.

I guess I'm not getting through to anyone here about this "speculator" thing. If you refuse to accept that the term "speculator" has been manipulated to a pejorative utilized by politicians and their cronies to sway public opinion, then the notion of what a commodities market does will never make sense. Earlier I used the word "financing" in reference to these folks. I find it easier to make the point using an agricultural reference as more people are more open minded to that market. A farmer will sell his future, expected crop yield to the commodities market (where the "speculators" work) in order to get a "guaranteed" price (usually profitable) for his efforts. This contract to buy becomes collateral so that the farmer can borrow money to buy seed, fertilizer, equipment, labor, and whatever else he has to spend ahead of time to make the crop happen. It's a cash flow tool to assist him to grow the crop. It works similarly for other commodities such as metals, and various energy products among others. These are all capital intensive businesses. The need investment capital ahead of production to make things happen............hopfully with a positive outcome.

If people understood that there would be more attention paid to the factors that impede production....................exactly what the politicians don't want to have happen. Is the commodities market a perfect system? No, but it is a free market system (well, mostly) and, if not meddled with too much, will adapt to market conditions as they change. Is there a chance that there might be some illegal, dishonest actions taken? Sure, possible, and we have laws in place to deal with that, if applied appropriately. But the alternative often offered, "the government should.............", is also subject to dishonest behavior. I wonder if it's a coincidence that Solyndra and speculator both begin with an S?

Thamks for the analogy Bob, that actually makes a lot of sense! So our flux has to do with people constantly guessing what the future value of oil will cost to produce, and people borrowing against that in order to produce that. Does that sound about right?

As I understand it, that "futures" contract is the right to buy some set amount of (insert commodity) at a set price, such as a guy may pay $500 for the right to buy 10,000 barrels of oil six months from now at $125/barrel, even if oil is selling for $100/barrel today. He's betting that prices are going to rise above $125/barrel, and is willing to bet his $500 on that fact. On that date he exercises his option, and the person who sold the futures contract must turn over 10,000 barrels of oil in return for payment of $1,250,000. If the seller bought that oil months before when it was at $75/barrel he pockets a tidy profit of $500,000 less his costs for storage. However, if he "sold short", banking on the fact that the price of oil was going to fall over the next six months and he really does not own 10,000 barrels of oil he must then buy that amount on the open market, and turn it over to the futures guy. If the price that day is below $125/barrel then he makes out (he only buys if the guy exercises the futures conract, which he won't if he can buy on the open market for less), as he can easily fill the commitment he made and pocket a little profit. However, if he "sold short" and oil is selling for $150/barrel then he puts out $1,500,000 to buy the 10,000barrels, and turns around and sells it for $1,250,000 - a loss of $250,000 for playing the futures market. The guys buying futures risk some money speculating, but the guys who "sell short" on big buys are dancing with the devil, IMO.

Originally Posted by rspears

As I understand it, that "futures" contract is the right to buy some set amount of (insert commodity) at a set price, such as a guy may pay $500 for the right to buy 10,000 barrels of oil six months from now at $125/barrel, even if oil is selling for $100/barrel today. He's betting that prices are going to rise above $125/barrel, and is willing to bet his $500 on that fact. On that date he exercises his option, and the person who sold the futures contract must turn over 10,000 barrels of oil in return for payment of $1,250,000. If the seller bought that oil months before when it was at $75/barrel he pockets a tidy profit of $500,000 less his costs for storage. However, if he "sold short", banking on the fact that the price of oil was going to fall over the next six months and he really does not own 10,000 barrels of oil he must then buy that amount on the open market, and turn it over to the futures guy. If the price that day is below $125/barrel then he makes out (he only buys if the guy exercises the futures conract, which he won't if he can buy on the open market for less), as he can easily fill the commitment he made and pocket a little profit. However, if he "sold short" and oil is selling for $150/barrel then he puts out $1,500,000 to buy the 10,000barrels, and turns around and sells it for $1,250,000 - a loss of $250,000 for playing the futures market. The guys buying futures risk some money speculating, but the guys who "sell short" on big buys are dancing with the devil, IMO.

The operative word in your dissertation is "storage" or the lack there of as the "speculator/commodities trader" doesn't store anything except the paper he/she is shuffling.
It really galls me that some clown sitting on Wall Street can, on a whim or someone farting in the Middle East can instantly drive the price of oil up irrelevant of supply and demand. And comparing farm futures to oil futures is like comparing apples to oranges as the oil producer is not borrowing on his future "crop". Don't get me wrong, I'm all for free market, but it does bother me greatly that a hand full of clowns can determine the market price with total impunity.

Did the Blamer/Partier/Vacationer-in-Chief finally make a fatal blunder? You can bet this will be grist for the 'other' side:

"We don't need to exaggerate what happened. All we need is to review what Obama, our President, was caught telling Russia's current president, Dmitri Medvedev, while the two met at the 2012 Nuclear Security Summit in Seoul, South Korea. Neither man knew the microphones were live and picked up their exchange. Here it is:

President Obama: On all these issues, but particularly missile defense, this, this can be solved but it's important for him to give me space.

President Medvedev: Yeah, I understand. I understand your message about space. Space for you...

President Obama: (reaching over and putting his hand on Mr. Medvedev's knee): This is my last election. After my election I have more flexibility.

President Medvedev: I understand. I will transmit this information to Vladimir."

From: Obama's Remark to Medvedev Reveals Troubling Insight

Sad what this man has done to America in three short years

Nothing new there. A second term President has nothing to lose and can do whatever he wants without having to worry about re-election... Probably on the 'things to do list' right after the pipeline!!!! The real problem still remains do we really want to be stuck with the alternative the Republican Party seems to be offering??? Is their a President Etch-a-Sketch in our future and is that what we need?

Also interesting is that today the US Supreme Court continues to hear arguments on the Health Care Bill.... will they strike down any of it, all of it, or some of it???

Originally Posted by Dave Severson

Also interesting is that today the US Supreme Court continues to hear arguments on the Health Care Bill.... will they strike down any of it, all of it, or some of it???

When Obamacare was written, the outfit that did it left out an important part that allowed it to have pieces declared invalid - which means all or nothing. This is called a 'severability clause'. Gonna be interesting

Does it bother anyone else that the Andrew Breitbart, who brought such things as the ACORN fiasco into the light and had recently announced that he would be releasing information from Obama's college days that would be difficult/impossible to defend in the upcoming election died at age 43 recently, totally unexpected and supposedly from "...natural causes" on the eve of the release?
http://realityfail.com/2012/03/whist...itbarts-death/

I agree, lame duck presidents in second terms have a lot more flexibility without fear of political fallout, but given the track record we've seen in the past three years I'm honestly not sure that our country, as we know it today, will survive through 2016, or that we will ever be able to recover from the economic and world political situation that results from a second term which will likely be worse than the first. Look at the political cartoons from outside the US to see how the US is perceived by others in the world today and then ask youself why our press chooses to paint a different picture in our news and political comentary. Our administration has no concept of how business really works. They believe that they can simply mandate "change", and it will happen. Meeting resistance to health care and contraceptive benefits?? We'll simply give it away and tell the insurance companies that they must pay for it - they won't care, and they've got lots of money, right? Want better gas mileage?? We'll tell Detroit to magically make it happen, and they can pay for that too, right? We got the Chevy Volt from such a federal mandate, declaring that Detroit must market alternative fuel vehicles. Alternative Energy?? Solyndra, which had no viable product line, proven technology or business plan received $535MM in loan guarantees to shift the US away from fossil fuels and nuclear power generation. The fact is, I cannot come up with one example of a positive "change" made in the past three years. and that was the battle cry in 2008. Am I missing something?

Ok, everybody who's honest and has a reasonable retention of their brain function already knows that Obama never was, never will be a good president, none the thing a lot of us have issue with. My questions are still up in the air waiting for answers;

1. Who's going to do a better/different job?
2. How are they going to do it?
3. What are they going to do?

Or, is this just the year we vote for 'none of the above' and wait for the country to just die a natural death? The damn media has people so convinced that negativity is the only important thing that I haven't heard anything positive from anyone running for public office in any capacity!!!! Is there anyone out there with a real plan, and not just a bunch of vague promises that make good sound clips??? Remember when both parties actually published a platform containing the items they would accomplish and how they would accomplish it??? I guess that went out of style the same time as having people in public office who would actually take a stand and voice their plans to make things better and not just flip-flop on an issue to remain on the most popular side...

Or, is this just the natural course of the last 3 decades of "politics as usual" leading to the demise of a once great country????

Sad times. I know what you mean Dave. In the past debates were about this is our plan, this is how we will achieve it. Today the politicians just bash eachother like the WWF Smackdown, and the biggest mouth wins in the end. All I know is if Obummmer gets elected again, the dignity of the country will decline, the social services that you and I pay for, will increase at a cost to you and me, but probably not a benefit, the deficit will climb, and our right to bear arms, will continue to be whittled away to nothing.
I don't like Mitt either, but at this point he's looking more like the lesser of two evils. As my friend says, your not voting for who you want for President anymore, your voting against who you don't want!

[ As my friend says, your not voting for who you want for President anymore, your voting against who you don't want![/QUOTE]

I truly believe that is how we got where we are now.

Originally Posted by NTFDAY

And comparing farm futures to oil futures is like comparing apples to oranges as the oil producer is not borrowing on his future "crop".

Ken, you need to do a little research. Oil exploration and production companies are HUGE borrowers of operating capital.

Charlie You hit the nail on the head!

Originally Posted by cffisher

[ As my friend says, your not voting for who you want for President anymore, your voting against who you don't want!

I truly believe that is how we got where we are now.[/QUOTE]

Some one explain how a female VP would have been worse than where we are now.