July 14 at 7:42 am
- slate.com
- Link
Amit Patel, Atul Arora, RAPatton and 8 other people liked this
"As the great investment writer Fred Schwed Jr. commented, "Only the thoughtful ask, 'What is happening to us?' The popular cry is, 'Who is doing this to us?' and its satisfying sequel—'Just let me get my hands on him!' " - Hutch Carpenter
There's a big difference between speculation of oil and that of bank shares - everybody is dependent on oil. Bank shares can fall through the basement and the government will still bail them out. As we already know, there is no hope for speculation driving oil prices through the roof. - JC unwired
"True, when speculators make mistakes, that is destabilizing. But in the case of oil prices, it's hard to see that speculators are playing much of a role. For one thing, inventories don't seem to be rising. If the inventory data are correct, consumers were burning all that $135 oil." - Jason Wehmhoener
Contrary to popular belief, speculators actually lower volatility. To see what happens in a market without futures trading, you only have to take a look at onions: http://money.cnn.com/2008/06/2... - Morton Fox
The onion thing is one data point, it's hardly a conclusive proof of anything. The inventory argument isn't very convincing; the cheapest form of inventory is unpumped oil. What we should really stop doing is using the word "speculator". - ⓞnor
The important difference is that if it's not "speculators", just producers conserving their supply of oil, then legislative fixes preventing speculation won't help and may hurt some folks. - Larry Greenfield
The onion example is a data point and a warning. If our legislators are so short-sighted as to end futures trading in oil, we'll see another data point in the oil spot market. - Morton Fox
"Destabilizing speculation requires the opposite: short-selling shares in a trough, thus deepening the trough, and betting that frothy shares will become frothier. In other words, destabilizing speculation means selling low and buying high. If that is a recipe for profit, I am missing something." Does this guy really not understand short selling? Really? - Andrew
And a counter point - http://seekingalpha.com/articl... - Andrew