Those who make up the market. Markets look at such things and as a
whole make the myriad of decisions (both that it will go up and that
will go down), behave in manner (buying or selling at what price point)
that they feel is congruent with that decision. The net of all of these
decisions is reflected in the price.
You suugested that one person caused the spike. I wanted to know
his or her name. Then I can see what he or she does and follow along and
make tons of money.
Just like the stock market, right? Would you agree with that comparison?
Actually, I didn't suggest that in my previous message, but since you asked,
here's an example of one person dicking around with your household budget
Yep (And since the following sentence is sorta worded like one I
write when I think I have a "gotcha" in my pocket, I look forward to
One guy did one small trade a few bucks (that he lost $600 on so it
could not be that big) gets credit for dicking around with the household
budget? The market (because this was a contrived trade) went back down
immediately, before going back up and testing and breaking through.
Now we're getting somewhere. The stock market moves based on emotion, which
is why an entire sector will sometimes collapse when one company within that
sector reports bad earnings. That's not always smart, especially when
investors don't notice that the earnings problems were only related to one
company, not the whole industry.
This is how many traders dick around with oil. Three years ago: "...on fears
of renewed violence in Baghdad..." What kind of morons thought violence in
Baghdad was going to have any material effect on oil production, in a
country which was barely producing any to begin with???
The news is full of comments from real oil industry insiders who say
increased speculative interest is a significant factor. Read the news. "John
Doe, analyst for Such-And-Such Incorporated...." Call John Doe. Let me
know what he tells you about amateurs with too much money on their hands.
They're nothing but day traders.
Emotion is a PART, never said otherwise. That is part of the
decision making process in humans. Not exactly a big shocker. They also
go down when one does, because that might indicate that there problems
throughout the sector. Many times a company within a sector reports bad
earnings and the others stay the same or go up. Sometimes (seen this a
lot recently) the company will report good earnings and taken to the
They emotional reactions also seem to be short lived. Called
"blips" by Cramer and others. a
More worried about risk of spreading concerns. Also, most of the
articles noted that as one of the reasons.
I pointed that out, although the significance is up for spirited
debate. STill what one person was responsible for the increase over the
last few years.
Well, neither you nor I know what percentage of the price movement is caused
by what I'll continue to call "amateurs". But, every percentage point of
improvement would help our economy if it lessens the extent to which fuel
sucks the life out of people's wallets. Why not eliminate amateur-induced
price swings, even if they're as small as just 2-4% of the action? (chose a
random range of numbers there)
If you think it's a good idea to drill for oil in ANWR, you have no choice
but to agree with me.
Last summer, an employee of
*** CHEVRON ***
was interviewed on one of the Sunday news shows. That's an oil company. He
said ANWR would be able to provide maybe 4% of our oil needs, maybe a little
more, but all the excitement about ANWR was largely nonsense.
If you think drilling in ANWR is worthwhile, considering the tiny
contribution it could make to our oil needs, than you must also agree that
tiny price improvements are worthwhile, even if it means telling some
amateurs that they need to take their gambling money to Saratoga instead of
the commodity exchanges.
No, I don't. Two different things. I am agnostic on ANWR for most of
the reasons you describe. Couldn't hurt from a price standpoint and
anything we can get internally is better than buying it from outside, if
only for balance of payments. I get a kick out of those who says ANWR
wouldn't make an impact, but if we open up the strategic reserve, it
The major overlooked and probably greater resource is the areas of
the Gulf of Mexico off of FL that their NIMBY Congresscritters put off
limits years ago.
Again, define amateur. Sorta required before we can discuss this
logically (a first for Usenet-grin).
It always amuses me that the more uniformed or misinformed they are,
the more they think they know how to fix everything. In this case,
accusing "amateurs" of manipulating the futures market is quite
comical. The typical amateur opens a futures account with 10K and
lasts about a year before losing it all. With $10K, they could buy
a whopping 2 futures contracts for all of 2000 barrels of oil. And
that is supposed to be a base from which to manipulate world oil
prices? LOL It's also the first time I've ever heard anyone
accuse "amateurs" of manipulating markets. Ask any trader and they
will tell you that they make money from volatility. Meaning, if you
want to manipulate any market, as a trader, you would make more money
by just cycling it back and forth, say from $80 to $100, instead of
having it go straight up like oil has. Of course manipulation
sounds better to folks like Joe, instead of more rudimentary concepts,
like worldwide demand has gone up, OPEC finally has it''s production
under control, etc...
Amateur: Anyone not trading on behalf of an oil company, or an industry
whose product's price consists largely of fuel costs (like airlines).
Mutual fund managers
Okay. Now, how would you enforce that? Especially outside the US.
Nice to make these pronouncements, but you also have to have a way to
enforce it that is useable, but also passes constitutional muster.
Actually I bought a couple futures contracts last fall for a
rather long road trip I was going to do. Figured out how much gas I was
probably going to use and then bought a contract or two. Largely as
intellectual exercise, but still fun.
But under your scenario I am not really an amateur.
Yep. Actually, after I thought about it, I realized that there are
already some kinda sorta similar restrictions. There are qualified
purchaser regs for some things like certain partnerships. If interested,
http://www.sec.gov/rules/proposed/33-8041.htm for examples.
However, you still haven't suggested how you would keep
people outside the US from investing. I don't think you can get the
genie back into bottle.
I suppose if a foreign customer's wire transfer (for trading capital) came
from an account like "Uncle Miroslav from Budapest", it would fairly easy to
differentiate from an oil broker's, especially after checking bank
If amateurs want to make stupid, emotional trading decisions, let 'em do it
with stocks & bonds. If they stupidly inflate the price of Paychex or Kodak
stock, who cares? I don't have to fill my tank each week with anyone's
No I was talking about the vast numbers of Brits, Germans,
Chinese, Japanese, etc. etc. that trade oil futures in THEIR home
markets. If such trading was outlawed on the US exchanges, how do you
propose making sure that those other COUNTRIES do the same thing. Or
even pick up the slack and just move trades from US to elsewhere.
Otherwise, you have just changed the locus of the problem and cut the US
out of the lucrative part of those trades to no apparent gain.
This is true. I guess you'd need to "get to" the firms which stand the most
to lose by hacking away part of their customer base. Of course, in some
countries, you could find yourself sleeping with the fish for meddling that
way, but still.....
HomeOwnersHub.com is a website for homeowners and building and maintenance pros. It is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.