Dave Holman asked:


This trillion dollar bailout is nothing more than a naked power grab by both sides in D.C. to attempt to nationalize the entire Financial Services Sector in this country.

For those of you who will attempt to “dis” my understanding of the economy, I will point out
1)I am self-employed, and won’t lose my job. My mortgage is fixed and very affordable. I don’t have any consumer debt to speak of. So, the bailout will not help me in any way, and it will, potentially damage me to the tune of thousands of dollars in taxes for God-only-knows how long

2)There is no way it stops here. If Washington succeeds in nationalizing the Financial Sector, Automotive, Retail and every other sector will have their hands out to get theirs, and we end up with complete Socialism.

3)My portfolio (and millions of other peoples) has only been negligibly affected by this correction. I would never invest in “air” which is what the Financial Services Sector is – my money is in commodities, transportation and agriculture – real things, that have intrinsic value….they are holding up pretty well. and

4) I remember the ’87 market correction, which was roughly TWICE as sharp as this drop, IN ONE DAY, and the only thing done was to curb “program trading” (the abuse d’jour in those days), and within a year and a half the market not only recovered but began a long bull market.

This bailout is not necessary. period

And see…this is what convinces me. Some of you are way far Right, like me, and some of you are way far Left….and on THIS we agree….doesn’t it stand to reason if EVERYONE on both sides can agree, that it really is a bad thing?
asjrb – how long can banks refuse to lend money, and still MAKE money? don’t you think someone will step in, if that happens? Someone out there is willing to make money, I am sure.
What the banks are doing right now is simple blackmail…if we refuse to give in, they will either start lending again, or go away….and someone else will step in…I prefer not to negotiate with terrorists.

Traditionally, commodity trading in petroleum products was a place where only the elite, super traders dared to venture. With barrels holding 42 gallons each and a contract minimum of 1,000 barrels, delivering oil was a task best left to the professionals. However, the petroleum trading landscape has undergone some dramatic changes over recent years.

For decades oil prices were stable, then in the mid 1970s the industry exploded. Technological advances and the political landscape contributed to the uncertainty, lack of stability, shortages and rising prices. Nearly 30 years later, prices have skyrocket to more than $70 per barrel and the forecasters predict that in mid to late 2007 when it is expected to experience a slight decline for the next two years.

However, there are no certainties when it comes to oil prices, but there are a few large scale factors that can minimize the risk by offering a reasonably accurate projection.

As demands continue to rise, other countries like India and China are also experiencing technological and cultural changes. The trend seems to be in an upswing with no indication of slowing, reversing or of being reversible.

India is riding in on the coattails of its western neighbors in regards to technology and business methods and is emerging in the 21st century. This brings with it an increased demand for energy, mainly oil based, so that homes, office buildings and manufacturing plants can be erected. Rural economy is getting a facelift in many areas as this movement brings with it such exponential growth which, in turn, increases the demand.

Demand is not the only piece of the puzzle, though. As India’s purchasing power to obtain those goods increases, other growth is showing up as well. India has a wealth of inexpensive, highly educated work force which is being sought out for outsourcing of Information Technology, electronics manufacturing, communications and more. This is continued to grow and expand for at least another decade. One indication of this growth is the rapid growth of broadband throughout India.

China is a technological mega country with the largest mobile phone use in the world and a close second for the largest internet population. Energy is in demand throughout the world, but in China it is expected to rise steadily for at least the next decade.

Although China is perceived to be a Communist nation, social forces are causing it effectiveness to decline. As of yet, it is impossible to predict whether the repression will increase or decrease, but it is inevitable that the flow of information will not be stopped and it will reach the people one way or another, despite any government’s attempts to block it.

The social changes within China seem to be somewhat proportionate to the increase in business there. Demand for energy is on the rise and new infrastructure, buildings and manufacturing plants are cropping up on a consistent basis. These businesses and growth all require energy, mainly oil based energy.

Demand continues to rise yet simultaneously supply rates are dropping off or have stalled. Temporary losses, such as with refineries, that occur as the result of disasters may be recovered in a matter of months, up to a year. However, North Sea oil production, which saw its peak in 2000, has seen a gradual decline. Until the time that political changes come around, releasing the massive reserves that are known to be in Alaska, it is not expected that there will be new discoveries of sources that will be utilized. Not many new sources are expected to be realized throughout the globe.

As technology leans in the direction of developing new forms of energy, there is no expectation that any of these sources will appear on the market for a period in excess of ten years. Fuel cell powered cars, which only account for 7% of gasoline use, are not expected to make an appearance for quite a few years.

Existing political pressures in the United States are hindering any hope of a change in the current situation. Waste disposal is one of the primary problems on the political forefront that shows no promise of a solution anytime soon. However, there are new forms of oil trading mechanisms that are evolving that allow the average investor to partake in a market that was at one time exclusive.

For example, e-mini futures on the CME allow for trading contracts that are half the traditional size of 500 barrels. Futures and options on the NYMEX remain at the 1,000 barrel size, yet they require less that 5% investment. These moves place these trades within the grasp of all types of investors. Commodities pools and funds such as those that are offered by Pimco and Oppenheimer allow investing lower amounts which are increasing their popularity.

This time in the marketplace can offer even the average investor a favorable risk and reward balance in oil commodity trading.

By: Amar Mahallati

About the Author:

Greg asked:


They said that the “California Energy Crisis” was a supply issue when it was just simple deregulation at the state level coupled with the federal government halting all oversight of electronic exchange commodity markets and derrivatives, and Enron was busy driving up the price by speculating on futures to drive up their profits. They said we needed to drill in ANWR and build plants, but how would that stop speculators?

In 2005 when natural gas prices doubled in less than a year, they said it was a supply issue, but it was one trader named Brian Hunter who ran the energy desk and who was placing spread trades through a hedge fund named Amaranth Advisors, and still they said we need to build more plants and drill ANWR.

They are saying it again even as the CEOs of the Big 5 oil companies claim oil should be nearer to 55 dollars a barrel but speculation is driving up the prices.

Why would they do this over and over and over?
Proof about what?

Proof that Enron traders are sitting in jail cells? Proof that Brian Hunter has been fined 30 million dollars for his role and that Amaranth has been fined 300 million for its role (and it is now bankrupt)?

Proof that they have never been right once? Not once?

Proof that the CEOs of the major oil companies are on the record under oath in Senate hearings saying that the price is out of line with demand? Proof that the Senate has concluded speculation is causing the price spike?
Note that after Enron collapsed, the California Energy crisis was over and prices went back to normal. Same thing happened after Amaranth was prosecuted and collapsed into a 6 billion dollar hole they dug speculating on gas futures.
The “Enron Loophole” was closed on May 14 by Congress. The CFTC now has authority to go after speculators on NYMEX. Unfortunately, the previous Congress opened another loophole through foreign exchanges like ICE, and the Congress has so far given the Justice Department the authority to sue speculators on foreign markets, and soon they should bring legislation forward closing that loophole too, I hope.

Something startted being done back in 2006, but it’s an uphill battle against ignorance about how commodity markets work.

der fuhrer asked:


The forecasts calling for a jump to between $7 and $10 a gallon are based on the view that the price of crude is on its way to $200 in two to three years.

Translating this price into dollars and cents at the gas pump, one of our forecasters, the chairman of Houston-based Dune Energy, Alan Gaines, sees gas rising to $7-$8 a gallon. The other, a commodities tracker at Weiss Research in Jupiter, Fla., Sean Brodrick, projects a range of $8 to $10 a gallon.

While $7-$10 a gallon would be ground-breaking in America, these prices would not be trendsetting internationally. For example, European drivers are already shelling out $9 a gallon (which includes a $2-a-gallon tax).

Canadians are also being hit with rising gas prices. They are paying the American-dollar equivalent of $4.92 a gallon, and they’re being told to brace themselves for prices above $5.65 a gallon this summer.

Early last year, with a barrel of oil trading in the low $50s and gasoline nationally selling in a range of $2.30 to $2.50 a gallon, Mr. Gaines — in an impressive display of crystal ball gazing — accurately predicted oil was $100-bound and that gasoline would follow suit by reaching $4 a gallon.

His latest prediction of $200 oil is open to question, since it would undoubtedly create considerable global economic distress. Further, just about every energy expert I talk to cautions me to expect a sizable pullback in oil prices, maybe to between $50 and $70 a barrel, especially if there’s a global economic slowdown.

While Mr. Gaines thinks there could be a temporary decline in the oil price, he’s convinced an overall uptrend is unstoppable. In fact, he thinks his $200 forecast could be conservative, and that perhaps $250 could be reached. His reasoning: a combination of shrinking supply and increasing demand, especially from China, India, and America.

pilot asked:


hi i come from another country i want to work on wall street. I read a lot about investing/finance/economics i enjoy it too. I am a good trader. i have been doing this for 5 years now. I want to work as a prop trader, equity trader, commodities broker, stock broker, trader, hedge fund trader or analyst, then eventually i want to retire on my own money compounding… do i have to go to ivy league like top 50 school to make this happen? im not the best student i only do good at what i enjoy.. funny thing is i took a personalility test in high school 3 times it said im a perfectionaist! only 1% of the american population is.! Im not really good at anything but trading stocks and i enjoy it too its easy and fun… help!

SmarterThanYou asked:


The drug dealing profession is looked at by many in society as seedy, unethical, and morally wrong. Television has painted the drug dealer as a bad guy for decades now, But honestly drug dealers do what every businessman in America does: They meet demand with supply. Drug dealers are entrepreneurs in a risky investment because they deal in the black market. Our laws consider what they do illegal. The fact these drugs are illegal causes a scarcity in supply, driving up demand. This makes the profession that much more lucrative. Because the risk involved is raised to a fevered pitch low level offenders without the cash to buy off cops or beat court cases with high priced lawyers are locked up in jail. The remaining few become extremely rich.

Fact is that for a small fee drug dealers give us the ability to escape our daily lives. Escape is the simple commodity they offer. The drug user seeks escape the same way as the teen who submerges himself into a video game seeks escape through a “virtual reality”. The virtual reality is escape just like the altered state you get from a drug is escape. But all escape is not equal under our laws. Our society looks at the drug dealer like some animal. A scourge to be lamented by so called civilized society. We freedom loving Americans watch as our right to self medicate is taken from us under the guise of moral righteousness. We sit back as many poor people are thrown in jail with unjustifiable harsh ***** cocaine laws. It is now the American way when poor people are unjustly packed into prisons for daring to participate in fare trade and support themselves in a hostile economical an political climate through drug sales.

We have been feed propaganda about “daring to not do drugs” but all around us drugs are being used. Alcohol, prescription medication, cigarettes. We sit back as innocent people are locked up for smoking marijuana but the drunk driver is given a slap on the wrist. We sit back as ***** dealers are locked up for years but corporations will sell us codeine and morphine in pill form and Dr.’s will over prescribe medications to there more affluent patients and get them addicted legally. We stereotype whole sections of the population, namely the black population and target them for intense drug warfare. And lock up addicts to the point where there is no more room for real criminals such as: child molesters, rapists and murders.

We cant trust our government to do whats right because they simple lie too much. We cant trust our media because they lack journalistic integrity and fail to look at the science of things often contributing to the ignorance of public perception by publishing works for private political agendas and not the public good.

We shouldn’t be told a contradictory story about how marijuana is bad for us but cigarettes, which kills millions apon millions with the various cancers associated with it, is completely legal which implicitly tells us that it is okay to smoke. Laws are in place to protect the population not steal away it’s freedoms and diminish true democracy. We cannot trust a government that outlaws marijuana, the drug of the peace loving native American, the war protesting hippie and the faithful Rastafarian.

The first thing you need to know about online trading is that now, everyone has the opportunity to get into it if they want to, and it is this opportunity that has been equalled for everyone in the world today. Trading has been making smart people money from all over the world and it is time for you to do this as well. One thing you need when you are trading, is you need to choose which market and which commodity to trade in. You need to do some market research when it comes to this, and you can find this with many of the financial and trading repositories online and offline.

One thing you need as much as you can is knowledge and once you can get some knowledge in, you will be able to make it as a trader. Many of the new traders often fall out of the market because of the fact that they do not have enough information on their side, so make sure you do not fall into this trap as well and one thing you can do to make sure that you do not fall into this trap as well. One thing that you need also is a brokerage of a financial firm to be your middle man in your whole trading game. The good thing about this is that there are plenty of these trading firms out there that can be give you the opportunity to trade online.

But one thing you need of course is some computing equipment and a good internet connection. You do not have to splurge on the equipment that you have, you do not really need any of the top of the line stuff, but you do need some dependable equipment that you can count on. The last thing you need is some of your trades going bust because your computer crashed. The last thing you might need is of course some knowledge on the commodity that you are trading in and a good system on your side. Trading systems are a dime a dozen out there in the market, but you need to be able to make sure that you get a good one on your side when you are trading.

The good news is that there are good results when it comes good systems that can be found out there on some good review sites, so these are the kind of the things you need. So, as you can see, online trading is something that anyone can do at any point of their lives, but the thing is, you need to be careful about it really.

These are the four essential steps that you need to take when you want to come into the trading game. Anything else, and research can be done on your own. So, good luck in your trading and remember that everyone loses at first when they are trading, so do not be disheartened and make sure that you persevere at every point of time in your trading.

By: Christopher M Lee

About the Author:

tczubernat asked:


The Cox News service reports that food prices are up 37% from a year ago. The “Times” of London reported on December 3 that Gulf Oil states are reducing their ties to the dollar. Iran stopped conducting its oil business in dollars on December 7th.

Why are food prices rising? Why is the worldwide demand for dollars shrinking?

Changes in prices, or in the value of a currency, always reflect a change in the supply of goods and services, or in the demand for them, or in the size of the money supply, or a combination of all three.

We’ve touched on part of the cause of rising food prices before: government subsidies for ethanol. These subsidies divert corn from food to fuel production. That makes meat more expensive, becasue corn is used to feed cows. It also sends a signal to farmers to stop growing other crops, and start growing corn. This lowers the supply of those other crops and causes their price to rise. Meanwhile . . .

Ethanol requires more energy to produce than it delivers. That means ethanol is triple bad news. It raises your price at the pump, and at the grocery store, and it’s bad for the environment. Thank you very much government. But . . .

Is ethanol enough to cause a 37% increase in food prices? We think not, especially when those price increases are accompanied by $800-an-ounce gold, and a world-wide flight from the dollar. Why have so many people traded dollars for gold, and why is the dollar losing its value overseas?

Is it because foreigners suddenly have less demand for American goods and services? This can’t be the answer. The volume of American products sold abroad is roughly unchanged. Of course, not all dollars are used to buy goods and services. Many dollars are held as an investment — as a store of value.

Is the American dollar no longer a good investment? Consider, first we had a stock market crash between 2000 and 2002. The American stock market lost nearly 38% of its value. Then there was the housing bubble, followed by the housing bust.

The housing bubble began in about 1996, but the balloon really started to inflate at about the same time the stock market was deflating. It certainly looks like money sloshed out of the stock market and into the housing market. It looks like people have been trying to find a safe place to invest their dollars.

But if the stock market and real estate turn out to be unreliable then it stands to reason that some money would then go to things like gold or to other currencies. This would explain the retreat from the dollar, but it doesn’t necessarily account for rising prices for food and other goods.

There is actually one thing that explains all of these phenomena: the size of the money supply.

When the Federal Reserve expands the number of dollars certain sectors get the new Fed money first. Those sectors are . . .

* The government, and those who do the most business with the the government
* The banking system, and those who do the most business with banks

This means that you would expect to first see the impact of an expanded money supply in the Big Business and Big Banking sectors. And what did we in fact see? We saw a stock market bubble (Big Business) followed by a housing bubble (Big Banking).

Eventually the new Fed money has to work its way through the entire economy, raising prices for everything you buy. We might call this the Consumer Bubble. And what are we in fact seeing? We are seeing rising prices for consumer goods like food.

Remember what we said in our last message on this subject. New money created by the Federal Reserve works exactly like money created by counterfeiters. The people who have the new money first are able to get something for nothing (purchasing goods and services before prices rise to account for the increased money supply). We might call this the Theft Phase of the Inflationary Cycle. Then . . .

Businesses are tricked by the new money into thinking there is increased demand. This causes them to raise prices so as to maintain inventories and invest in new production. This is the Boom Phase. Then . . .

The new money works its way through the entire economy, raising all prices, which removes the impression of increased demand, causing the previous investments in inventory and expanded production to become unneeded and unsupportable. This is the Bust Phase.

This is exactly what we have seen happen. This is why the dollar is losing its value. There is no mystery.

Think about the two Alan Greenspan quotes at the top of this message. Greenspan admits that no central bank — no Fed — was needed under the Gold Standard. Notice the other quote. Greenspan admits that neither he nor anyone else knows how to predict what the economy will do. This is very important because . . .

The whole idea behind the Fed was that the money supply would be backed by all of the goods and services in the economy (instead of by gold), and that the managers of the Fed would increase the money supply in sync with the growth of the economy, thereby avoiding price inflation. But . . .

Greenspan admits that it is impossible for him, or anyone else, to know enough about what is going on in the economy to keep the money supply in sync with productivity. This has resulted in repeated disasters, from the Great Depression, to the Great Stagflation of the 1970s, to today.

How do we get off this roller coaster? Returning to the stability of gold would be one way. And gold would probably work even better today with our advanced ability to transfer the ownership of gold/money electronically, instead of toting it around with us. But . . .

The process of returning to a gold economy seems daunting given that the Federal Reserve and the money it creates is so interwoven with our economy. We will have more to say about this in future messages, but for now, suffice it to say that Congressman Ron Paul has devised a very elegant way to get things started.

The simple act of repealing the legal tender law, which confers a monopoly on Federal Reserve Notes, would empower transactions in gold, or any other currency or commodity the market found worthwhile. This would foster monetary competition, and competition would reduce the Fed’s ability to inflate the money supply.

This one change would be a big first step toward getting off the roller coaster.

heeltap asked:


This is the fully-worded Q which didn’t fit the Q-box: Will the oil &/or economic experts here posting A’s on the topic please explain WHY everyone is spot & long-term contracts for all commodities are a thing of the past? And please tell us how exactly you know this? Was it from an economic textbook ,a business school case you studied or was/is it real world job experience refining or trading oil with OPEC?
You are thinking like a stock or commodity futures investor. Not as a primary player with logistical and operating concerns. This is a supply chain issue and also also a cost management issue. Not having long term price and supply agreements in place means you are variable cost driven and while everything else is amortizable- capital by long term finance agreements and even labour costs year to year, your material costs are not controllable esp when a cartel like OPEC exists that sells only on a spot basis(QTR to QTR agreements based on maginal barrel trades). This is not about a wholesale trading or speculator’s conspiracy! This is about a conspiracy between the sources of supply of staples! Esp the swing suppliers in the Arabian/Persian Gulf

Steve W asked:


The Democrats were right about the Enron Loophole and the need to re-regulate the energy commodity markets that Phil Gramm deregulated in 2000 (about when oil prices started to steadily climb upwards).

http://news.yahoo.com/s/ap/20080910/ap_on_go_co/oil_speculation

The report by Masters Capital Management said investors poured $60 billion into oil futures markets during the first five months of the year as oil prices soared from $95 a barrel in January to $145 a barrel by July.

Since then, these investors have withdrawn $39 billion from those markets as prices have retreated dramatically, the report said. Oil traded at about $102 a barrel Wednesday on the New York Mercantile Exchange.