Speculation Regulation Needed Now

Discussion in 'Economy' started by FactFinder, Jul 24, 2009.

  1. FactFinder
    Offline

    FactFinder VIP Member

    Joined:
    Mar 1, 2009
    Messages:
    2,641
    Thanks Received:
    202
    Trophy Points:
    83
    Ratings:
    +237
    Thumbing their nose at the laws of economics and free markets oil speculators continue to violate the laws of supply and demand. They use every trick they can find whether it be associated with logic or not (most often not) to drive up the price, gouging us all and the poor in particular.

    [​IMG]

    We have never had so many petroleum products in stock and they are rising daily. Gas should be about a buck a gal right now. Who's pocketing the difference?

    False markets led to the current recession and continued false markets thwart its recovery.
     
    Last edited: Jul 24, 2009
  2. Care4all
    Offline

    Care4all Warrior Princess Supporting Member

    Joined:
    Mar 24, 2007
    Messages:
    32,775
    Thanks Received:
    6,623
    Trophy Points:
    1,170
    Location:
    Maine
    Ratings:
    +11,099
    speculators, just mere manipulation that does not rely on supply or demand.

    Something HAS TO BE DONE....
     
  3. cbi0090
    Offline

    cbi0090 Member

    Joined:
    Feb 8, 2008
    Messages:
    436
    Thanks Received:
    46
    Trophy Points:
    16
    Ratings:
    +46
    Speculation is about confidence, gut feelings, and risk. The numbers are only there to sooth or justify those emotions but every real investor knows how fickle numbers can be. So how do you regulate that? If profits are high right now, do you think it's because a lot of investors are betting on worse times in the future? The worst time to pay for bad times is during bad times, that's how things crash. The idea of regulating something like this sounds good to the uninformed but is very short-sighted and flawed.
     
  4. Toro
    Offline

    Toro Diamond Member

    Joined:
    Sep 29, 2005
    Messages:
    50,768
    Thanks Received:
    11,056
    Trophy Points:
    2,030
    Location:
    The Big Bend via Riderville
    Ratings:
    +25,103
    I do agree that investment funds have contributed to the inflated price of commodities but I'm not sure if the blame can be put on "speculators." An ocean of money has flowed into the commodity markets from large institutions such as pension funds because of asset allocation decisions, meaning they make a decision to have investment exposure to commodities, purchase large amounts of contracts and continuously roll them over, as opposed to darting in and out at different prices, which is what I think of as speculators. They are long-term investors but their actions of altered the relatively small commodity markets.
     
  5. FactFinder
    Offline

    FactFinder VIP Member

    Joined:
    Mar 1, 2009
    Messages:
    2,641
    Thanks Received:
    202
    Trophy Points:
    83
    Ratings:
    +237
    Those flow of funds came through the vehicle of hedge funds. The largest speculator of them all. There has been no shortage of oil and no shortage of those who would gouge those of necessity of warming their home or driving to work. If they can't take delivery, store or need the oil they should be barred from trading it.

    These false markets raise costs across the board. These perverted energy prices were the last nails in the economies coffin and continues to sit on top of it thwarting its attempts to revive.
     
  6. editec
    Offline

    editec Mr. Forgot-it-All

    Joined:
    Jun 5, 2008
    Messages:
    41,427
    Thanks Received:
    5,598
    Trophy Points:
    48
    Location:
    Maine
    Ratings:
    +5,617
    If the price of oil futures is a BUBBLE, it will burst eventually.

    If the price is being manipulated by some really smart guys, if they're frothing the price, they're doing that in order to lure the foolish into losing their dough.

    Sooner or later they'll spring the trap and the price will plummet.

    As to how that effects our economy in the meanwhile?

    They don't care.
     
  7. FactFinder
    Offline

    FactFinder VIP Member

    Joined:
    Mar 1, 2009
    Messages:
    2,641
    Thanks Received:
    202
    Trophy Points:
    83
    Ratings:
    +237
    Exactly.

    I don't care about them either but I do care about the broader consequences for everyone else.
     
  8. dilloduck
    Offline

    dilloduck Diamond Member

    Joined:
    May 8, 2004
    Messages:
    53,240
    Thanks Received:
    5,552
    Trophy Points:
    1,850
    Location:
    Austin, TX
    Ratings:
    +6,403
    An economy based on gambling needs some rules. Ask any casino owner.
     
  9. editec
    Offline

    editec Mr. Forgot-it-All

    Joined:
    Jun 5, 2008
    Messages:
    41,427
    Thanks Received:
    5,598
    Trophy Points:
    48
    Location:
    Maine
    Ratings:
    +5,617
    No doubt it does.

    But the major players ARE the casino owners in this case.
     
  10. Paulie
    Offline

    Paulie Platinum Member

    Joined:
    May 19, 2007
    Messages:
    31,553
    Thanks Received:
    4,854
    Trophy Points:
    1,130
    Ratings:
    +15,400
    You believe that oil futures should be limited to only those who intend to take physical delivery. I get that.

    But what about peopple who speculatively buy stocks, but don't have any intention of using their voice in the company, i.e. voting, attending shareholder meetings, conference calls, etc, which is what they're SUPPOSED to do as partial owners of a company?

    Speculative investors do the same exact thing with equities as they do with futures. If one shouldn't be able to speculate in futures, they shouldn't be able to speculate in equities.

    Let's not have double standards regarding speculation simply because one speculative play happens to be related to personal energy consumption.

    This all being said, I do agree to a certain extent that speculating in futures with no intention of taking delivery is smearing the original purpose of the futures market.
     
    Last edited: Jul 27, 2009

Share This Page