Home › Forums › Financial Markets/Economics › Inflation – Has it arrived?
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davelj.
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March 29, 2011 at 1:25 PM #682635March 29, 2011 at 1:48 PM #681479
CoronitaParticipant[quote=bearishgurl]Just saw this this morning. It’s what I’ve always believed. “Day traders” are the ones manipulating the price of gas. It has nothing to do with “supply and demand.”
. . . The Biggest Winners
Among the biggest winners of the new oil markets are investment banks like Goldman Sachs (GS) and Morgan Stanley (MS), which create new products for clients and then use that information to trade on the products. In 2004 and 2005, Goldman Sachs made $1.5 billion a year trading oil, Dicker says. In the first half of 2009 alone, the firm made $3.4 billion oil trading profits. Firms like Goldman are not taking bets that oil will move lower or higher. Trading simply means naming a spread of buy and sell prices from which they can eke out tiny but regular profits, a business without risk.
Dicker is particularly contemptuous of oil ETFs of the kind that many small investors have used as vehicles to diversify their holdings. “In these markets, they way they are set up, with all the edges with investment banks, the regular investor is just fodder,” Dicker says. “The ETFs are the world’s worst investment. They’ve only lasted this long because oil prices continue to rally.”
So if gas prices would come down sharply with minimal regulation, why doesn’t the government step in and impose limitations as it has done recently for other derivatives, forcing most firms to conduct their trading on exchanges? Dicker believes it is largely because large financial firms with a direct interest in oil trading have made so much money with oil that they can afford to lobby Congress to block any significant reforms.
That’s why I don’t see a point in trying to buy a fuel efficient car purely to save money… If you want to be noble and save the environment, that’s a different story..But saving money on gas I think is a moot point…..
Consider this… Using an analogy to our utility companies….if people really conserved and used less fuel, then the oil companies, Wall Street, and refineries, would do nothing more than jack up prices anyway……Kinda like what the SDGE, and the water company does when people actually listened and conserved energy/resources…
Not complaining though….CVX/RDS/XOM are near all time highs…And those dividends that are paid aren’t exactly shabby either….All because of speculation…
March 29, 2011 at 1:48 PM #681533CoronitaParticipant[quote=bearishgurl]Just saw this this morning. It’s what I’ve always believed. “Day traders” are the ones manipulating the price of gas. It has nothing to do with “supply and demand.”
. . . The Biggest Winners
Among the biggest winners of the new oil markets are investment banks like Goldman Sachs (GS) and Morgan Stanley (MS), which create new products for clients and then use that information to trade on the products. In 2004 and 2005, Goldman Sachs made $1.5 billion a year trading oil, Dicker says. In the first half of 2009 alone, the firm made $3.4 billion oil trading profits. Firms like Goldman are not taking bets that oil will move lower or higher. Trading simply means naming a spread of buy and sell prices from which they can eke out tiny but regular profits, a business without risk.
Dicker is particularly contemptuous of oil ETFs of the kind that many small investors have used as vehicles to diversify their holdings. “In these markets, they way they are set up, with all the edges with investment banks, the regular investor is just fodder,” Dicker says. “The ETFs are the world’s worst investment. They’ve only lasted this long because oil prices continue to rally.”
So if gas prices would come down sharply with minimal regulation, why doesn’t the government step in and impose limitations as it has done recently for other derivatives, forcing most firms to conduct their trading on exchanges? Dicker believes it is largely because large financial firms with a direct interest in oil trading have made so much money with oil that they can afford to lobby Congress to block any significant reforms.
That’s why I don’t see a point in trying to buy a fuel efficient car purely to save money… If you want to be noble and save the environment, that’s a different story..But saving money on gas I think is a moot point…..
Consider this… Using an analogy to our utility companies….if people really conserved and used less fuel, then the oil companies, Wall Street, and refineries, would do nothing more than jack up prices anyway……Kinda like what the SDGE, and the water company does when people actually listened and conserved energy/resources…
Not complaining though….CVX/RDS/XOM are near all time highs…And those dividends that are paid aren’t exactly shabby either….All because of speculation…
March 29, 2011 at 1:48 PM #682152CoronitaParticipant[quote=bearishgurl]Just saw this this morning. It’s what I’ve always believed. “Day traders” are the ones manipulating the price of gas. It has nothing to do with “supply and demand.”
. . . The Biggest Winners
Among the biggest winners of the new oil markets are investment banks like Goldman Sachs (GS) and Morgan Stanley (MS), which create new products for clients and then use that information to trade on the products. In 2004 and 2005, Goldman Sachs made $1.5 billion a year trading oil, Dicker says. In the first half of 2009 alone, the firm made $3.4 billion oil trading profits. Firms like Goldman are not taking bets that oil will move lower or higher. Trading simply means naming a spread of buy and sell prices from which they can eke out tiny but regular profits, a business without risk.
Dicker is particularly contemptuous of oil ETFs of the kind that many small investors have used as vehicles to diversify their holdings. “In these markets, they way they are set up, with all the edges with investment banks, the regular investor is just fodder,” Dicker says. “The ETFs are the world’s worst investment. They’ve only lasted this long because oil prices continue to rally.”
So if gas prices would come down sharply with minimal regulation, why doesn’t the government step in and impose limitations as it has done recently for other derivatives, forcing most firms to conduct their trading on exchanges? Dicker believes it is largely because large financial firms with a direct interest in oil trading have made so much money with oil that they can afford to lobby Congress to block any significant reforms.
That’s why I don’t see a point in trying to buy a fuel efficient car purely to save money… If you want to be noble and save the environment, that’s a different story..But saving money on gas I think is a moot point…..
Consider this… Using an analogy to our utility companies….if people really conserved and used less fuel, then the oil companies, Wall Street, and refineries, would do nothing more than jack up prices anyway……Kinda like what the SDGE, and the water company does when people actually listened and conserved energy/resources…
Not complaining though….CVX/RDS/XOM are near all time highs…And those dividends that are paid aren’t exactly shabby either….All because of speculation…
March 29, 2011 at 1:48 PM #682291CoronitaParticipant[quote=bearishgurl]Just saw this this morning. It’s what I’ve always believed. “Day traders” are the ones manipulating the price of gas. It has nothing to do with “supply and demand.”
. . . The Biggest Winners
Among the biggest winners of the new oil markets are investment banks like Goldman Sachs (GS) and Morgan Stanley (MS), which create new products for clients and then use that information to trade on the products. In 2004 and 2005, Goldman Sachs made $1.5 billion a year trading oil, Dicker says. In the first half of 2009 alone, the firm made $3.4 billion oil trading profits. Firms like Goldman are not taking bets that oil will move lower or higher. Trading simply means naming a spread of buy and sell prices from which they can eke out tiny but regular profits, a business without risk.
Dicker is particularly contemptuous of oil ETFs of the kind that many small investors have used as vehicles to diversify their holdings. “In these markets, they way they are set up, with all the edges with investment banks, the regular investor is just fodder,” Dicker says. “The ETFs are the world’s worst investment. They’ve only lasted this long because oil prices continue to rally.”
So if gas prices would come down sharply with minimal regulation, why doesn’t the government step in and impose limitations as it has done recently for other derivatives, forcing most firms to conduct their trading on exchanges? Dicker believes it is largely because large financial firms with a direct interest in oil trading have made so much money with oil that they can afford to lobby Congress to block any significant reforms.
That’s why I don’t see a point in trying to buy a fuel efficient car purely to save money… If you want to be noble and save the environment, that’s a different story..But saving money on gas I think is a moot point…..
Consider this… Using an analogy to our utility companies….if people really conserved and used less fuel, then the oil companies, Wall Street, and refineries, would do nothing more than jack up prices anyway……Kinda like what the SDGE, and the water company does when people actually listened and conserved energy/resources…
Not complaining though….CVX/RDS/XOM are near all time highs…And those dividends that are paid aren’t exactly shabby either….All because of speculation…
March 29, 2011 at 1:48 PM #682645CoronitaParticipant[quote=bearishgurl]Just saw this this morning. It’s what I’ve always believed. “Day traders” are the ones manipulating the price of gas. It has nothing to do with “supply and demand.”
. . . The Biggest Winners
Among the biggest winners of the new oil markets are investment banks like Goldman Sachs (GS) and Morgan Stanley (MS), which create new products for clients and then use that information to trade on the products. In 2004 and 2005, Goldman Sachs made $1.5 billion a year trading oil, Dicker says. In the first half of 2009 alone, the firm made $3.4 billion oil trading profits. Firms like Goldman are not taking bets that oil will move lower or higher. Trading simply means naming a spread of buy and sell prices from which they can eke out tiny but regular profits, a business without risk.
Dicker is particularly contemptuous of oil ETFs of the kind that many small investors have used as vehicles to diversify their holdings. “In these markets, they way they are set up, with all the edges with investment banks, the regular investor is just fodder,” Dicker says. “The ETFs are the world’s worst investment. They’ve only lasted this long because oil prices continue to rally.”
So if gas prices would come down sharply with minimal regulation, why doesn’t the government step in and impose limitations as it has done recently for other derivatives, forcing most firms to conduct their trading on exchanges? Dicker believes it is largely because large financial firms with a direct interest in oil trading have made so much money with oil that they can afford to lobby Congress to block any significant reforms.
That’s why I don’t see a point in trying to buy a fuel efficient car purely to save money… If you want to be noble and save the environment, that’s a different story..But saving money on gas I think is a moot point…..
Consider this… Using an analogy to our utility companies….if people really conserved and used less fuel, then the oil companies, Wall Street, and refineries, would do nothing more than jack up prices anyway……Kinda like what the SDGE, and the water company does when people actually listened and conserved energy/resources…
Not complaining though….CVX/RDS/XOM are near all time highs…And those dividends that are paid aren’t exactly shabby either….All because of speculation…
March 29, 2011 at 5:26 PM #681529Arraya
Participant[quote=bearishgurl]Just saw this this morning. It’s what I’ve always believed. “Day traders” are the ones manipulating the price of gas. It has nothing to do with “supply and demand.”
[/quote]
Well, it’s a little more complex than that. Are traders pushing prices beyond the supply demand equilibrium, absolutely.
However, oil production reached a plateau in early 2005 – despite massive price fluctuations production stayed flat. Now, what does that mean when price skyrockets and productions does not increase?
March 29, 2011 at 5:26 PM #681583Participant[quote=bearishgurl]Just saw this this morning. It’s what I’ve always believed. “Day traders” are the ones manipulating the price of gas. It has nothing to do with “supply and demand.”
[/quote]
Well, it’s a little more complex than that. Are traders pushing prices beyond the supply demand equilibrium, absolutely.
However, oil production reached a plateau in early 2005 – despite massive price fluctuations production stayed flat. Now, what does that mean when price skyrockets and productions does not increase?
March 29, 2011 at 5:26 PM #682202Participant[quote=bearishgurl]Just saw this this morning. It’s what I’ve always believed. “Day traders” are the ones manipulating the price of gas. It has nothing to do with “supply and demand.”
[/quote]
Well, it’s a little more complex than that. Are traders pushing prices beyond the supply demand equilibrium, absolutely.
However, oil production reached a plateau in early 2005 – despite massive price fluctuations production stayed flat. Now, what does that mean when price skyrockets and productions does not increase?
March 29, 2011 at 5:26 PM #682342Participant[quote=bearishgurl]Just saw this this morning. It’s what I’ve always believed. “Day traders” are the ones manipulating the price of gas. It has nothing to do with “supply and demand.”
[/quote]
Well, it’s a little more complex than that. Are traders pushing prices beyond the supply demand equilibrium, absolutely.
However, oil production reached a plateau in early 2005 – despite massive price fluctuations production stayed flat. Now, what does that mean when price skyrockets and productions does not increase?
March 29, 2011 at 5:26 PM #682695Participant[quote=bearishgurl]Just saw this this morning. It’s what I’ve always believed. “Day traders” are the ones manipulating the price of gas. It has nothing to do with “supply and demand.”
[/quote]
Well, it’s a little more complex than that. Are traders pushing prices beyond the supply demand equilibrium, absolutely.
However, oil production reached a plateau in early 2005 – despite massive price fluctuations production stayed flat. Now, what does that mean when price skyrockets and productions does not increase?
April 8, 2011 at 10:38 AM #684802davelj
ParticipantI found this to be a very interesting (and timely) piece on inflation by a very smart guy I’ve followed for the last few years. Also, it has the virtue of being reasonably brief.
April 8, 2011 at 10:38 AM #684851ParticipantI found this to be a very interesting (and timely) piece on inflation by a very smart guy I’ve followed for the last few years. Also, it has the virtue of being reasonably brief.
April 8, 2011 at 10:38 AM #685479ParticipantI found this to be a very interesting (and timely) piece on inflation by a very smart guy I’ve followed for the last few years. Also, it has the virtue of being reasonably brief.
April 8, 2011 at 10:38 AM #685622ParticipantI found this to be a very interesting (and timely) piece on inflation by a very smart guy I’ve followed for the last few years. Also, it has the virtue of being reasonably brief.
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