Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

Der Spiegel: Speculators holding up to 45% of all oil contracts.

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010) Donate to DU
 
bulloney Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Mar-11-08 06:40 PM
Original message
Der Spiegel: Speculators holding up to 45% of all oil contracts.
Ain't capitalism great?

According to Der Spiegel, the reason for the current surge is oil prices is not supply and demand. It's pure speculative investing.

The report stated that huge amounts of U.S. pension funds are being invested in oil stocks, driving up the price of a barrel of oil to record amounts. The investments are leaving housing credit investments such as Fannie Mae or Freddie Mac because of the precarious housing market.

It's being described as an oil pricing bubble that will burst, which could still damage the U.S. economy if such huge amounts of these pensions are tied to the market.

Meanwhile, U.S. consumers are paying record amounts of money for fueling their vehicles and everything else tied to energy.

This begs the question: Is unbridled capitalism really the panacea that free-marketers make it out to be, when something as vital to our national security as energy are susceptible to the whims of speculators?

I'm not a socialist or anything like that, but everything needs some type of accountability, especially when national security is on the line.
Printer Friendly | Permalink |  | Top
Captain Angry Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Mar-11-08 06:43 PM
Response to Original message
1. Who would watch over the speculators in Hong Kong and London?

Oil is expensive for every country in the world, it's not just us.

We just live in a country where most people think they have to have a car under them for hours at a time, and that wanting mass transit makes us a commie.

Oil prices wouldn't matter if we cut our consumption in a big way.
Printer Friendly | Permalink |  | Top
 
WCGreen Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Mar-11-08 06:45 PM
Response to Reply #1
2. Oil is traded in dollars....
That is why it matters to everyone around the world...

Printer Friendly | Permalink |  | Top
 
Warpy Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Mar-11-08 06:46 PM
Response to Original message
3. Oil isn't the only commodity
Big money has moved from real estate to the stock market and now to commodities. They're not only creating a speculative bubble in oil prices, they're also doing the same to wheat, rice, and metals.

The only thing we can say for certain about these bubbles is that eventually they will burst, but the question is how many people are going to be badly hurt in the meantime.

Expect riots worldwide.
Printer Friendly | Permalink |  | Top
 
bbinacan Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Mar-11-08 06:52 PM
Response to Reply #3
5. Good point
when the speculators who are long decide to unwind their positions for profit, we could see a big drop in the price of oil.
Printer Friendly | Permalink |  | Top
 
madrchsod Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Mar-11-08 06:52 PM
Response to Original message
4. well duh....i thought it would be higher than that
what goes up comes back down...
Printer Friendly | Permalink |  | Top
 
selador Donating Member (706 posts) Send PM | Profile | Ignore Tue Mar-11-08 07:16 PM
Response to Original message
6. speculative TRADING
first of all specs, are PART of the supply/demand curve. always have been, always will be.

2nd of all, we don't have UNBRIDLED CAPITALISM. we have highly regulated capitalism

i TRADE futures (although not so often oil ones) and let me tell you, it's regulated. i'm a speculator (and an investor). so, i put capital at risk on my "whims" and that's my right - to be engaged in the markets. that's what a free (yet regulated) market means. no central control. do you think a centrally controlled market would be BETTER?

here's the ACTUAL
http://futures.tradingcharts.com/cotcharts/CL

reports on spec vs. non-spec (the commercials are non-spec) just to show you the trend.

iow, my opinion is that i don't think it's a problem. yes, it can contribute to a bubble. that's a price we pay for having a non-centralized control market.

if you want to see what a spec can do trying to corner a commodity market, google "hunt brothers" with the realization that the silver market in those days was much much much smaller than the oil market.


and since crude floats worldwide, US traders (even bolling) are only a part of the trade volume.







Printer Friendly | Permalink |  | Top
 
DU AdBot (1000+ posts) Click to send private message to this author Click to view 
this author's profile Click to add 
this author to your buddy list Click to add 
this author to your Ignore list Sun Jul 13th 2014, 09:15 AM
Response to Original message
Advertisements [?]
 Top

Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010) Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC