Commodities Markets & Speculation.. "the new game"(replaces the housing bubble)

[SoCalDem]

THIS is why food prices have been jacked up so high, and there are now foods that are RATIONED ...at Costco & Sams' Club..

CNN "expert" just said too, that SPECULATION & COMMODITY FUTURES TRADING amounts for about $75 a barrel of oil,....

Did you get that?? SEVENTY-FIVE DOLLARS A BARREL is speculation people getting rich from swapping oil futures with each other..

SMELLS JUST LIKE WHAT THEY DID WITH THE MORTGAGE BUNDLING SCAM we are all paying through the nose for right now, and why so many people are losing their homes.


This is what we get when "business schools" are graduating so many "smart" young people with no real avenues of job opportunities.. They CREATE their own niche markets..marakets in gross-manipulation of commodities we all need..

I remember years ago, commodities were traded mostly to help farmers lock in prices for livestock , grain & seed..but since the 80's , it's become a big-ole pain in the ass for consumers.. These "traders" do NOT increase supplies for anything they trade...they just manipulate the price by creating artificial "shortages" and higher prices down the line.

Enron knew it, Duke Energy knew it, Reliant Energy knew it..and now our energy prices will never be anything but high and higher..

Things that had decades of stable prices are now escalating at prices people can barely afford.

"Money-expert" also said that $3 would probably be the LOWEST we will see , for gasoline..forever..

[earthboundmisfit]

1. Yup. The whole f*ckin' world is in the hands of speculators

Y'all forgive my ignorance please - but has it always been this way?

[SoCalDem]

2. In a small way..mostly farm commodities

corn, wheat, pork bellies etc..but usually because farmers needed to plan ahead for expenses, and the prices were not all that diffreent year to year..unless there were weird weather issues..

I remember when the hunt brothers did it with silver..a long time ago.. and created some chaos..

but I don't recall the "vegas" mentality until recently

[Captain Angry]

9. Speculation vs. hedging in commodity markets

If you have no desire to deliver or take delivery of the commodity at the expiration of the contract, it's speculation.

If you are a farmer that wishes to deliver corn on a certain date and want to lock in the price that will be paid rather than risking what spot will be, you can set up a futures contract.

If you are a breakfast cereal maker, and want to buy corn at a specific price, you can lock in a low price to take delivery at in the future.

If you have no desire or ability to take delivery or deliver a commodity, you're speculating, not hedging market risk.

[DinahMoeHum]

3. I dunno, but if I were a commodities trader, I'd start pricing PUT options

right now. (meaning that prices will drop sooner or later) IOW. I'd be "contrarian".
Prices like right now will not last forever - neither do "bubbles". This one will bust like every other.

:evilfrown:

[aint_no_life_nowhere]

4. I think they should explore making oil speculation illegal

I don't know what effect it would have, but what if all the major stock markets in the world got together and required that anyone investing money in a barrel of oil on a stock market actually had to buy and take possession of that barrel of oil?

[Robbien]

6. Congress did decide to look at speculation in food and oil

The result was they proposed to give speculators MORE freedom to speculate.

This morning they decided to put that expansion of food/oil speculation on hold for a while.

Appears the hunger headlines were enough to get the bought and paid for congresscritters to back off their pandering to the lobbyists, or at least to sit on it until the headlines go away.

[sinkingfeeling]

5. Absolutely. We've traded manufacturing of goods for manufacturing of 'paper profits'. A guy on TV

claimed that if you had any brains you'd be buying up oil, gold, and food commodities. That's where the money is!! Just look at all the 'financial' markets that came into existence from the late 1970's till now. 'Mortgage brokers', hedge funds', 'package mortgages', mortgage securities, etc. All of them needless ways to make a few people very, very rich.

[slipslidingaway]

8. Was this today???

"A guy on TV claimed that if you had any brains you'd be buying up oil, gold, and food commodities. That's where the money is!!"

Wonder what he was saying in 2001?

[slipslidingaway]

7. K&R. We really need to start holding people accountable

for knowing and doing nothing.

:banghead:

Also we need to look past the label a person is given and listen to what they are saying IMO. The fastest way to shut down an idea is the marginalize them and pin on a label on them, we know this, yet it is easy to fall in the trap being laid for us.

:(


From 1993...

"...Those who do know what derivatives are, will, if asked, for the most part regurgitate what the bankers and others have told them to say: that derivatives are a necessary part of what they call the ``financial industry ... they hedge risk, ... they make the markets more efficient,'' and so forth...

....Purchases of stocks and bonds would once have been seen as investment for the long haul. Trade in commodities would have been seen not as investment, but as purchases and sales.

With what are now called derivatives, we move from investment, and purchases and sales of hard commodities, to speculating on the future price or yield performance of what were once investments, and relatively simple, economically necessary transactions. It would be like going to the horse races to bet, not on the race, but on the size of the pot. Who would care about what's involved with getting the runners to the starting gate?

....The so-called Over-The-Counter instruments account for about half of the total derivatives outstanding in the U.S.A., And they are almost exclusively issued by the large money center banks. Of roughly $6 trillion at the end of 1991, Citibank, accounted for 25 percent of the total, and J.P. Morgan and Bankers' Trust the next largest chunk. That is $1.5 trillion for Citibank alone. The banks insist that this is not only safe, it is a socially useful and valuable service which they are providing to their clients. ``Why, you must be naive if you do not know that. Let me tell you all about it.'' That is the approach which they adopt..."


Article and links posted here

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=3098855&mesg_id=3099613


and here with some discussion

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3253766&mesg_id=3254460

[El Pinko]

10. A whole generation has been conditioned to believe in "what the market will bear is right"

There is no such thing as "overpriced" or "thoo much profit". If someone will pay it, it's worth that much.

My Stepdad is one of these - he pooh-poohed my gripes about the absurd price of houses with this free-market dogma BS.

This guy thought of Reagan as the second coming.

Of course, he and my mom spend like sailors on leave with a fancy cliffside house overlooking the city, always late-model cars, trips abroad, eating out at the nicest restaurants several times a week - and they have practically ZILCH in savings although they're almost 70.

Whatever.

[Karenina]

11. K&R!

:kick:

Re: your sig... It was 6 LAPS and not .05 secs??? :wow:

[high density]

12. Food seems to be the next target

The media is out there right now telling people they need to start stockpiling food.