.Gov suing oil traders for price fixing.

:up:Please explain your viewpoint.

How would eliminating the paper traders reduce volatilty?

 

There are other Ken Griffin-like people that are manipulating the commodities market just to the lesser extent
In the case of the oil energy markets there is typically not a huge delta in the supply/demand but the speculators driving the price per barrel up drive an increase in production when supply isn't an issue in the first place. That trickles down to other commodities in your case the energy needed to produce fertilizers, cost of a tractor/implement needed to harvest, costs of trucking product to market, etc.

 

But that is free market dynamics working. Price goes up, so does production. When we start telling people what and how much they can buy with their money..............

Some of this goes back to fiscal policies in the US. Cheap money, stated goals of less drilling, higher prices for petroleum products, all send signals to the market.

Please explain how commodities markets are being manipulated?

 

No huge deltas? Like unrest in oil producing countries? Like less miles driven? There are deltas, just the time scale we are used to looking at in the here and now is longer for these things.

 

Goes back to my first post
I believe that if the speculators that can't possession of product and can't play there would be less volatility. How is it that Libva gets bombed and immediately the price of a barrel of oil shoots up the next day when there's no indication that production has changed?

I see your point but when there's no intent on taking possession there's room for manipulation

 

How would industries hedge themselves?

 

So was what these guys did with FCOJ wrong?

 

IF I remember correctly, they had access to insider info. So yes.

 

When you say "industries" are you referring to companies like Con-Agra or Joe's Hedgefund?

 

Both. Commodities can be used as a hedge against many things.

 

Just curious GRH, do you work in a commodities industry?

 

Along another note, does anyone think the anti profit sentiment slant the government is going after is a precursor to nationalization?

 

yes, the "crop report"

 

I'm not against profits, I'm against manipulation.
Do you think there's any ethics issues (legal or not) with the actions of companies like Goldmans-Sachs?


You can do a search on what I do for a living
I have to catch a plane now but enjoyed our dicussion, thanks

 

I do have some reservations about ethics concerning some of the products Gold and other sell. However my question is if it is not illegal, why cant someone do it? Not that I would, but some will. I just dont like changing rules midstream and go after people who were playing the game under the set of rules. Like I said earlier, if we do not like the rules, change them, but do not make them retroactive.

I enjoyed it as well.
Thanks
Brian

 

Two different things?

 

Anyone? Don't know.

For me, no, I don't think so.

 

Yes. Cargill Inc does not release internal numbers as they are the largest privately held company in the world. Their traders can take positions based on info their company has on their holdings, for example.

 

Where is the anti-profit slant? If that were the case wouldn't .gov be suing every trader?

 

Grandstanding the oil companies for starters