OT: The budget according to McCain - Part I

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As usual, it's the guy that knows the least that has the easy answers on to how to fix problems that don't even understand. You don't even know the basic terms relating to what you're trying to do. What you want to ban is not amateurs. Who would call a large futures fund or a hedge fund an amateur? Yet you want to ban them, don't you? The correct term is a ban on all speculative positions. Anything else I can help you with?
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wrote:

As usual, it's the guy that knows the least that has the easy answers on to how to fix problems that don't even understand. You don't even know the basic terms relating to what you're trying to do. What you want to ban is not amateurs. Who would call a large futures fund or a hedge fund an amateur? Yet you want to ban them, don't you? The correct term is a ban on all speculative positions. Anything else I can help you with?
==================== That was a useful answer. Now, pick a one word description so we can continue. How about "outsiders"?
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JoeSpareBedroom wrote:

4% is not chump-change. The U.S. consumes about 20 million bbl/day of oil.
4% of 20 million is 800,000 bbls/day at $120/bbl is $96 million. Per day. That's a third of what we import from Saudi Arabia.
$100 million here, $100 million tomorrow, and pretty soon you're talking real money.
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Where is that one individual with enough money to impact the world price of oil? And exactly what would they achieve by doing it? If their buying pushed the price up, then when they try to sell it, they would have a similar effect on the price on the downside.
And even if such a person did exist and was trying to raise the price, there are people on the other side, even more powerful, who can freely take advantage of any price rise and sell into it. Like an oil producer, who believes the new slightly higher price is favorable, or even too high, and they can sell into the price rise. That's why no one individual is going to drive the price of oil higher.
I could also postulate the direct opposite to your indivudual trader. And that is a trader with lots of money who believes $125 a barrel is too high and unsustainable. That trader would be selling large quantities of contracts, putting downward price pressure on oil. Now, you tell me, which is more likely? Someone with huge amounts of money that has seen oil rise from $30 to $125 buying more because they think it's going even higher? Or taking profits and/or going short because they think the run is over?
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wrote:

Where is that one individual with enough money to impact the world price of oil? And exactly what would they achieve by doing it? If their buying pushed the price up, then when they try to sell it, they would have a similar effect on the price on the downside.
And even if such a person did exist and was trying to raise the price, there are people on the other side, even more powerful, who can freely take advantage of any price rise and sell into it. Like an oil producer, who believes the new slightly higher price is favorable, or even too high, and they can sell into the price rise. That's why no one individual is going to drive the price of oil higher.
I could also postulate the direct opposite to your indivudual trader. And that is a trader with lots of money who believes $125 a barrel is too high and unsustainable. That trader would be selling large quantities of contracts, putting downward price pressure on oil. Now, you tell me, which is more likely? Someone with huge amounts of money that has seen oil rise from $30 to $125 buying more because they think it's going even higher? Or taking profits and/or going short because they think the run is over?
========================
You have an almost religious devotion to NOT believing some of the things that adversely affect the price of oil. That's not healthy.
http://www.thetimes.co.za/Business/Article.aspx?idg2709
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JoeSpareBedroom wrote:

Many things affect the price of oil. Random guessing is not one of them. Neither is an attempt by an individual to control the price.
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1) Random guessing is absolutely involved with some trading. You're wrong. You need to read more.
2) One individual did not attempt to control the price. He actually did it. You didn't read the article.
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I read the article. He did one trade for a little more than the market was ready for, it reacted, went back down. If he controlled the price for real, he wouldn't have lost $600 on the deal, unless he needed the tax loss.
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wrote:

He's not an isolated incident. The physical reality of oil production and demand are not enough to explain what's happened to the price.
Here's more nonsense:
"Also pushing oil prices higher were concerns about Iran after Supreme Leader Ayatollah Ali Khamenei said Sunday that his country will not bend to international pressure and give up its nuclear program. Iran is the second largest producer in the Organization of Petroleum Exporting Countries."
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It may be nonsense to you, but if you were about to sell Dec oil futures contracts, it would be of some interest, because the more likely a confrontation with Iran becomes, the higher the probability that there will be a cut off of Iranian oil in the months ahead. If you were selling a piece of commercial property you owned, and there was a news story over the weekend of a big redevelopment project or a new road coming by, would you still sell it at the same asking price? Or would you stop and reconsider even if it were far from a sure thing?
On any given day, no one can tell you how much of a price change was due to any particular factor. But certainly markets react to news. This is nothing new and nothing limited to the oil markets. In the summer, when the National Weather Service issues it's forecast update, grain futures can easily go limit up or limit down. That's an extreme example of what news can do. The Iranian story is nowhere near that significant, but it can have some effect on prices. BTW, it works in both directions.
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Oh my God. Are you for real? That article has so many things wrong with it that it is totally laughable to anyone that knows anything about the futures markets. Getting your info from sources like this, no wonder you're confused.
Let's start out with what the guy was trying to do. He wanted to be the trader that bought the first futures contract for oil over $100. Where do you think you would start from if you wanted to do that for the bragging rights? $50? $80? Or would you do it when oil was $99.99 and hope that your trade happened to take it up a penny? If it didn't fill at $100, you could just sell it again and start over many times, taking small losses. Eventually, you might get lucky. That's not manipulating anything.
Let's look at what they say he did:
"Arens offered 100,000 dollars on the New York market on Wednesday for 1,000 barrels of oil, producing the much talked of 100 dollars per barrel which sparked anguish across the financial markets."
So, Mister Big here, who's out to manipulate the price of oil, is trading 1000 barrels, which is one futures contract. That's right ONE single futures contract, where they trade hundreds of thousands of contracts a day. You know how much money that took? The margin requirement for one futures contract is $4000. So, Mr. Big set out to manipulate the world price of oil with a whopping $4,000 LOL
"The new price record came as a shock to the markets although many had been saying 100 dollars was inevitable at some point given strong demand and supply constraints."
I'm sure it was. I mean with the prior trade in oil being $99.99, who would ever think the next trade could be $100?
What a total piece of BS. The guy is trading a one lot and tries to time it so that it's the first to fill at $100. He succeeds and it gets reported as "One man sent oil over $100" The sad thing is, with so many obvious holes in this BS, you swallow it and regurgitate it as proof of how markets are manipulated. What is really being manipulated is gullible readers.
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What is the meaning of the word "trader" in your alias? Hobby? Business? Details, please.
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JoeSpareBedroom wrote:

Because commodity exchange and speculation is a form of insurance. Prudent businesses buy insurance, even though insurance is a form of speculation and gambling.
One of the reasons Southwest Airlines has been able to keep its fares low, for example, is that they "speculated" on the price of oil and locked in several contracts for aviation fuel running to several years at (now) ridiculously low prices. Even in your community you can "speculate" by locking in contracts for home heating oil or even electrical rates. Just a couple of years ago California "speculated" on electrical power by buying guarantees at enormous rates. Now the state is trying to weasel out of a bad deal.
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I'm referring to traders who have no connection to the oil business, or any business at all which needs to hedge the purchase of oil.
If you have enough money, you can trade in the same way as Southwest Airlines. So can a mutual fund.
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So, when Southwest was hedging and locking in the price of fuel, it was a bad thing that it was an individual trader on the other side? Or a futures fund? Had those participants been banned it would have reduced liquidity in the market and Southwest would have gotten a less favorable price.
And why the need all of a sudden to change markets that have worked freely for hundreds of years? Just because you say so, based on juvenile articles like the one you just provided, written by some reporter who obviously doesn't understand futures?
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So, when Southwest was hedging and locking in the price of fuel, it was a bad thing that it was an individual trader on the other side? Or a futures fund? Had those participants been banned it would have reduced liquidity in the market and Southwest would have gotten a less favorable price.
And why the need all of a sudden to change markets that have worked freely for hundreds of years? Just because you say so, based on juvenile articles like the one you just provided, written by some reporter who obviously doesn't understand futures?
=========================== The oil futures market is a relatively new invention. Not hundreds of years old.
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For every 1000 trades in oil futures, how many are done by people or institutions directly related to either the oil industry, or an industry like airlines, whose product's price is largely comprised of fuel costs?
Examples of possible answers:
2 28 49 11
Like that.
How many per 1000?
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You're the one claiming to know so much about the futures markets and how prices are manipulated. So, why don't you tell us? Before I went around spewing about how something should be banned, I would at least understand what was going on. And I'd start somewhere other than a hysterical news report about a guy trading one futures contract being responsible for pushing up the world price of oil.
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wrote:

You're the one claiming to know so much about the futures markets and how prices are manipulated. So, why don't you tell us? Before I went around spewing about how something should be banned, I would at least understand what was going on. And I'd start somewhere other than a hysterical news report about a guy trading one futures contract being responsible for pushing up the world price of oil.
==========================
We both know there are SOME amateurs playing in the water, but I don't know exactly how large their influence is. That's why I'm asking you, because you claim a certain level of expertise. Obviously, knowing how many won't tell us how much business they do, but maybe it's a start.
So, how many per 1000?
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You're the one claiming to know so much about the futures markets and how prices are manipulated. So, why don't you tell us? Before I went around spewing about how something should be banned, I would at least understand what was going on. And I'd start somewhere other than a hysterical news report about a guy trading one futures contract being responsible for pushing up the world price of oil.
BTW, along the way, maybe you could learn the correct terminology. Because amateur isn't even close to what you're talking about. I've never even heard anything so silly. Amateurs manipulating the futures market. LOL The typical amateur opens an account with $10K and blows it out in less than a year.
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