RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players

RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (Full Version)

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MrRodgers -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/26/2012 8:46:00 PM)
quote: ORIGINAL: cuckoldmepls Use whatever common sense you have left in your little pinkie. If this were true don't you think they would have kept gas prices low during the 2008 Presidential election. My theory that the Arabs intentionally ran up the gas prices to get Obama elected are much more plausible. This time though, the experts are saying that the democrat monetary policies are devaluing the dollar making it more expensive. First, political parties do not have any monetary policy...only the fed does. It and it alone decides interest rates and money supply which IS monetary policy. Just how would we know the dollar is being devalued ? I love all of these politicians and so-called experts talking about this and Obama's policies yet fail to cite a single policy or any practical difference his policies has made. The dollar at 1.3 Euros or less is just about where it has been when gas was a whole lot cheaper. The rise in the price of oil is speculation...pure and simple. Even with the Iranian sanctions the world has plenty of oil. 2002-2007 the US dollar went from .87 per Euro to $1.44. losing almost half it's value. The repubs, fiscal conservatives all...borrowed $6.7 trillion after cutting $4 trillion in taxes to eliminate the surplus that was sufficient if they were REAL fiscal conservatives...to pay off the our debt. The dollar since has been right around $1.30/Euro...so the dollar has risen. Now explain that. The price of gas however, is a different thing. Refineries are being shut down. One had lost $1million/day for 3 years. There is a real price/production/demand bottle neck in the US oil industry...serving of course...most investors, not society. Gas futures are up BTW, so if the OP is correct...the Kochs could be throwing money at them.

xssve -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/26/2012 8:53:12 PM)
Yeah, that's what it looks like, domestic demand is, and has been, actually shrinking steadily, but every time an Arab sneezes skittish speculators drive the price up. i.e., it only takes an anticipation of a demand increase or a rumor of war to drive prices up, well before anything like that actually transpires.

mussorgsky -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/26/2012 9:05:37 PM)
George Bush, like all too many Republicans, was not a fiscal conservative. However, we must remember that the Democrats controlled the Congress during his last two years in office. Remember those bail-outs? The defunding of the Iraq war that never happened? All under the watch of Bush and the Democrat majority. Oh, and would anyone like to explain why there hasn't been a federal budget in about three years? Ah, the joys of being a Libertarian, I can piss off both sides of the issue simply by speaking the Truth.

Edwynn -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/26/2012 9:34:58 PM)
~FR~ Forward contracts are OTC, directly between buyer and seller, most of them resulting in actual delivery. There is little secondary market for these contracts. A futures contract is a standardized version of a forward and written and traded on an exchange, each party putting up a 15% margin on the value of the contract, that being the agreed upon price per 5,000 bushels of corn, 1,000 bbls. crude, etc. The farmer selling and the food processor buying a contract are not speculating, they are locking in prices, profit and cost. The larger portion of futures contracts are for speculation, no intention of delivery. These are either cash settled or neutralized by buying/selling the opposite position. Options are bought/sold on other financial assets, including futures contracts. One party writes (sells) a put (right to sell) or call (right to buy) at a future date at an agreed upon strike price, the buyer pays a premium to the writer and exercises the option if the future spot price difference from the strike price is more/less than the premium. There is no requirement to exercise so the option is otherwise let to expire. These also have legitimate hedging/insurance purposes, but the portion traded for speculation is even greater than with futures. There are no derivatives I'm aware of that are not based on the underlying asset itself, tangible or intangible, being highly liquid, and the legitimate hedging activity provides well more than enough market size to provide abundant liquidity for the derivatives, so beyond the first few percent of the speculative trading, if even that, the further added liquidity is redundant. Until we decide to spend at least as much effort on how to use less energy than we do on how to obtain more, the excessive speculation in energy will maintain. Not much to made in speculation when demand increases too slowly.

Edwynn -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/26/2012 9:52:35 PM)
quote: Ah, the joys of being a Libertarian, I can piss off both sides of the issue simply by speaking the Truth. The truth is that the Libertarian mantra of 'free markets' is what begot the financial deregulation that begot his whole mess.

mussorgsky -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/26/2012 9:56:17 PM)
Edwynn, Actually, the free market is fine with certain oversights, and I guarantee you that those oversights were not removed by libertarians. Simply follow the money to see that both Clinton and Bush removed those constraints to help out their buddies. Oh, and if it were really a free market, we never would have bailed out GM or any of the banks. None of them were too big to fail and there is no frellin' way that we should have rewarded their failures with free money.

MrRodgers -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/26/2012 10:01:33 PM)
quote: ORIGINAL: Edwynn quote: Ah, the joys of being a Libertarian, I can piss off both sides of the issue simply by speaking the Truth. The truth is that the Libertarian mantra of 'free markets' is what begot the financial deregulation that begot his whole mess. Not true, free markets are the goal, we just don't have many of them. The plutocracy has seen to that. The capitalists are here to make some fucking money and will use govt. or anything else to do it. Libertarians want the worst of all worlds...Laissez Faire or unregulated capitalism. Free market-capitalism has become the modern all time...oxymoron.

Edwynn -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/26/2012 10:05:34 PM)
Greenspan was appointed by Regan and if you can't see that his actions were as Libertarian as they come then I'm not sure if you understand what it's about. Without Greenspan's impetus, e.g. approving the Citi/Travellers merger almost two years before the law got changed to make it legal, not any of the rest of it would have happened. But someone not self-labeling as a Libertarian does not absolve that ideology for the ideas that are implemented. I know, not one single damn thing is the fault of Libertarian ideals because nobody in congress has an L attached to their name. Uh uh, that doesn't work. I didn't hear much in the way of objection from the Libertarian camp when all that deregulation was going on.

MrRodgers -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/26/2012 10:14:16 PM)
quote: ORIGINAL: mussorgsky George Bush, like all too many Republicans, was not a fiscal conservative. However, we must remember that the Democrats controlled the Congress during his last two years in office. Remember those bail-outs? The defunding of the Iraq war that never happened? All under the watch of Bush and the Democrat majority. Oh, and would anyone like to explain why there hasn't been a federal budget in about three years? Ah, the joys of being a Libertarian, I can piss off both sides of the issue simply by speaking the Truth. One problem with your scenario and usually because those on the right conveniently forget. Can you tell me what the dem majority in congress did 2006-08 ? I didn't think so. That's because they couldn't do anything. NOTE: for future partisan discussions...Bush became only the 2nd Pres. in history to fail to veto a single bill in his first term. He became the first pres. in history not to veto a single bill in his first 6 years in office. In 2006 before November of 06 passed a part D medicare drug benefit and trhe largest transportation bill in history with 15,000 pork earmarks thrown in. Then starting in 2006...vetoed 13 bills in the two years of dem majorities. Now just what did the dems do from 06-08 again ?

MrRodgers -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/26/2012 10:20:27 PM)
quote: ORIGINAL: mussorgsky Edwynn, Actually, the free market is fine with certain oversights, and I guarantee you that those oversights were not removed by libertarians. Simply follow the money to see that both Clinton and Bush removed those constraints to help out their buddies. Oh, and if it were really a free market, we never would have bailed out GM or any of the banks. None of them were too big to fail and there is no frellin' way that we should have rewarded their failures with free money. In a free market, we wouldn't have the FDIC, the OPIC, agric. & diary subsidies, Fannie or Freddie, all income would be taxed as simply...income not some Orwellian term like 'capital gains' or 'carried interests'...whatever they are. No FHA loans, no capital as speech. A whole new world we will never see.

GrandPoobah -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/26/2012 10:28:00 PM)
quote: ORIGINAL: provfivetine How would banning futures trading lower oil prices? I'm sorry I can't immediately put my finger on the exact quotation, nor the exact name of the oil industry guy who said it, but the gist of his comment was this: Oil is probably about 40% too high. (He was speaking, as I recall, in 2010, or early 2011) The reason is that all the non-oil people are buying oil and driving up the price. So, here's the answer to your question. Anybody can buy oil futures. Goldman Sachs buys a bunch. Billions of dollars worth. They do so not because they're going to produce gasoline or diesel or anything else. They do that because they can make money doing it. So...they drive the price higher by offering a better price to the original seller...then, they turn around and sell, making a profit. Do that a few times over, and you quickly have oil that has a much higher price, and all that "difference" became profits and bonuses for Wall Street. If only oil companies were buying oil, you remove that layer of fat. Oil companies could buy directly from oil producers, and then the costs would be directly related to the product. It's almost like paying protection money to the mob, except the banks are more...hmmmm...scratch that, the banks are exactly like the mob, taking everything they can from anybody they can fleece.

MrRodgers -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/26/2012 11:05:08 PM)
quote: ORIGINAL: tj444 quote: ORIGINAL: MrRodgers You are correct but the cash being invested in futures does not provide any liquidity to any market needing oil. Most users of oil do not hedge with futures but the oil cos. are huge buyers 24/7 and must protect themselves. so airline corps, Fedex, courier companies, national or international trucking companies, shipping companies and all the large product manufacturers, etc, etc, etc dont hedge in the futures market? if that is the case they would be changing their price sheets every week.. You dont convince me.. I know if I used any amount of oil in my business and my costs and prices to the consumer depended on the price i paid, I would be friggin hedging!.. Yes the airlines are among the most vulnerable. Yes, all of these users are effected and have and continue to add fuel surcharges to their costs to compensate but I will tell you in no uncertain terms...NO corporation gets into any commodities futures oil or otherwise unless they are forced by price that hasn't been covered with higher prices. The oil companies must do it yet hate, hedging in futures. For those that you site, they, like the oil cos., would have to hire financial experts and create an office specifically for futures hedging. Most do not, they pass on the costs. Oil companies buy so much, they cannot hope to keep up with prices unless they too buy oil futures. If those you site do hedge, they are driven to it by the other speculators which does what...feeds the frenzy. Doesn't change the premise...the price it up due to speculation.

tj444 -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/27/2012 1:11:24 AM)
quote: ORIGINAL: MrRodgers quote: ORIGINAL: tj444 quote: ORIGINAL: MrRodgers You are correct but the cash being invested in futures does not provide any liquidity to any market needing oil. Most users of oil do not hedge with futures but the oil cos. are huge buyers 24/7 and must protect themselves. so airline corps, Fedex, courier companies, national or international trucking companies, shipping companies and all the large product manufacturers, etc, etc, etc dont hedge in the futures market? if that is the case they would be changing their price sheets every week.. You dont convince me.. I know if I used any amount of oil in my business and my costs and prices to the consumer depended on the price i paid, I would be friggin hedging!.. Yes the airlines are among the most vulnerable. Yes, all of these users are effected and have and continue to add fuel surcharges to their costs to compensate but I will tell you in no uncertain terms...NO corporation gets into any commodities futures oil or otherwise unless they are forced by price that hasn't been covered with higher prices. The oil companies must do it yet hate, hedging in futures. For those that you site, they, like the oil cos., would have to hire financial experts and create an office specifically for futures hedging. Most do not, they pass on the costs. Oil companies buy so much, they cannot hope to keep up with prices unless they too buy oil futures. If those you site do hedge, they are driven to it by the other speculators which does what...feeds the frenzy. Doesn't change the premise...the price it up due to speculation. Oil can go up in price for various reasons, political unrest or situations such as what Iran is doing, it can be up due to the season (more people travel in the summer so demand means prices go up), it can go up due to increased demand from developing countries, it can go up due to a refinery catching on fire and being unable to process the oil or weather like a hurricane, and yes it can also go up due to speculation. I would expect the govts manipulate the market also. But that does not change the fact that the futures exchanges exist for businesses to control their future costs and in turn keep the prices to their customers stable. Hedging is a business decision.. whether businesses hate to hedge or not is irrelevant.. "Trading on exchanges in China and India has gained in importance in recent years due to their emergence as significant commodities consumers and producers. China accounted for more than 60% of exchange-traded commodities in 2009, up on its 40% share in the previous year." "Since 1999, hedging has saved Southwest $3.5 billion." http://www.nytimes.com/2008/06/30/business/worldbusiness/30iht-30hedge.14104427.html "Airlines executives know that it is often impossible to pass higher fuel prices on to passengers by raising ticket prices due to the highly competitive nature of the industry." "Airlines that want to prevent huge swings in operating expenses and bottom line profitability choose to hedge fuel prices. In fact, Raymond Neidl (see Neidl and Chiprich, 2001) points out that “the carriers that produced an adequate return, especially in the second half of 2000, tended to be those that had good fuel hedge positions in place.” Airlines without hedges in place had disappointing earnings or losses. For example, in the fourth quarter 2000, US Airways, which was unhedged, estimated that its $88 million net loss would have been a profit of $38 million if their fuel costs had not increased. Airlines are different from most commodity users or producers in that it usually the airline" http://www.sba.pdx.edu/faculty/danr/danraccess/courses/fin562/hedging_case_crj_submission.pdf "Economic Importance of the Futures Market Because the futures market is both highly active and central to the global marketplace, it's a good source for vital market information and sentiment indicators. Price Discovery - Due to its highly competitive nature, the futures market has become an important economic tool to determine prices based on today's and tomorrow's estimated amount of supply and demand. Futures market prices depend on a continuous flow of information from around the world and thus require a high amount of transparency. Factors such as weather, war, debt default, refugee displacement, land reclamation and deforestation can all have a major effect on supply and demand and, as a result, the present and future price of a commodity. This kind of information and the way people absorb it constantly changes the price of a commodity. This process is known as price discovery. Risk Reduction - Futures markets are also a place for people to reduce risk when making purchases. Risks are reduced because the price is pre-set, therefore letting participants know how much they will need to buy or sell. This helps reduce the ultimate cost to the retail buyer because with less risk there is less of a chance that manufacturers will jack up prices to make up for profit losses in the cash market." http://www.wikinvest.com/wiki/Futures "A trucking company can purchase such instruments directly on a commodities exchange. Or, a carrier can use a fuel services provider, passing responsibility for direct interaction with financial markets to a third party. Truckload carrier Schneider National, Green Bay, Wis., hedges a portion of its diesel expenses by purchasing heat-ing oil futures contracts on the New York Mercantile Exchange." http://www.ttnews.com/articles/printnews.aspx?storyid=21977

DomKen -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/27/2012 12:55:28 PM)
quote: ORIGINAL: tj444 quote: ORIGINAL: DomKen quote: ORIGINAL: tj444 quote: ORIGINAL: DomKen Bullshit. Every contract is delivered when it matures. That is the whole and only point of the commodity markets. Some take delivery and some just buy or sell the contract so that they are out of the market with their profit or loss.. I have traded futures and never took delivery of what i was trading... Its a zero sum game.. "Generally, the delivery does not occur; instead, before the contract expires, the holder usually "squares their position" by paying or receiving the difference between the current market price of the underlying asset and the price stipulated in the contract." http://www.investorguide.com/igu-article-537-alternative-investments-introduction-to-futures-and-futures-trading.html It is important that there be liquidity in the commodities markets, imo.. Your opinion is wrong. A futures contract is just that, a contract to deliver good X at time Y. That people with no business in the markets have gotten involved and perverted the entire operation is the reason we pay so much for food, look into the goings on in wheat futures the last 10 years, and gas. You can either take delivery or you can close out your contract before the delivery date and the contract comes to an end. As I said, I traded futures and never took delivery of the underlying commodity. If it were not for businesses being able to hedge commodities, currencies, etc in the futures market then the cost to the consumer would fluctuate too much. It is used by them to keep their costs more constant and predictable. The first futures market started in the early 1700s in Japan. Its not going away no matter how much people bitch about it. Food commodities were never my thing, too volatile imo. When i was a kid growing up on the farm, every morning my father would listen on the radio to the commodity prices to judge when the best time to sell his steers, hogs, wheat, etc was... So I suppose one could blame him cuz he waited until he could get the best price he could and in part, why consumers then paid more for the food produced. [8\|] So You know next to nothing about the commodity markets? Why didn't you say so. Why prices for bread and everything else containing wheat skyrocketed. http://harpers.org/archive/2010/07/0083022 Which is precisely what is happening to oil. The speculators issue these futures they can never fulfill so when the maturity date comes around they have to buy real oil to fulfill their commitment and voila demand does not increase but price goes up.

DomKen -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/27/2012 12:57:15 PM)
quote: ORIGINAL: tj444 quote: ORIGINAL: MrRodgers You are correct but the cash being invested in futures does not provide any liquidity to any market needing oil. Most users of oil do not hedge with futures but the oil cos. are huge buyers 24/7 and must protect themselves. so airline corps, Fedex, courier companies, national or international trucking companies, shipping companies and all the large product manufacturers, etc, etc, etc dont hedge in the futures market? if that is the case they would be changing their price sheets every week.. You dont convince me.. I know if I used any amount of oil in my business and my costs and prices to the consumer depended on the price i paid, I would be friggin hedging!.. Why would any of those gasoline and/or other petroleum distillate consumers hedge in raw petroleum? They have no way to refine the crude and no way to take delivery.

SoftBonds -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/27/2012 5:37:16 PM)
quote: ORIGINAL: DomKen quote: ORIGINAL: tj444 quote: ORIGINAL: MrRodgers You are correct but the cash being invested in futures does not provide any liquidity to any market needing oil. Most users of oil do not hedge with futures but the oil cos. are huge buyers 24/7 and must protect themselves. so airline corps, Fedex, courier companies, national or international trucking companies, shipping companies and all the large product manufacturers, etc, etc, etc dont hedge in the futures market? if that is the case they would be changing their price sheets every week.. You dont convince me.. I know if I used any amount of oil in my business and my costs and prices to the consumer depended on the price i paid, I would be friggin hedging!.. Why would any of those gasoline and/or other petroleum distillate consumers hedge in raw petroleum? They have no way to refine the crude and no way to take delivery. Actually, it does make sense for fuel users to buy oil futures as a hedge. Then if oil prices go up, when they sell the futures they recoup part of the increased fuel costs they are paying. That said, there is a big difference between hedging (essentially taking out insurance) and speculating. Want to know how to tell the difference? Apply a tiny tax rate to the transactions, half a percent, and watch the speculators flee for the hills while the legitimate buyers and sellers shrug and go right along. Wanna bet the tax would be the first tax in history that lowered prices???

tj444 -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/27/2012 7:05:58 PM)
quote: ORIGINAL: SoftBonds Actually, it does make sense for fuel users to buy oil futures as a hedge. Then if oil prices go up, when they sell the futures they recoup part of the increased fuel costs they are paying. That said, there is a big difference between hedging (essentially taking out insurance) and speculating. Want to know how to tell the difference? Apply a tiny tax rate to the transactions, half a percent, and watch the speculators flee for the hills while the legitimate buyers and sellers shrug and go right along. Wanna bet the tax would be the first tax in history that lowered prices??? No, you would be financially punishing businesses that have a legitimate reason to hedge. I am very against that. And you know what the govt track record is on tiny tax rates.. they grow into bigger and bigger tax rates.. [8\|] Not to mention, there are lots of other futures markets that both the hedgers and speculators can go to and bypass the US govt entirely.. and they would keep their profits outside the US so no investment back in the US.. Isnt that (offshoring) what people are bitching so much now about the big corps??? More tax means more corps send money away from the US, never to come back..

SoftBonds -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/27/2012 7:34:36 PM)
quote: ORIGINAL: tj444 quote: ORIGINAL: SoftBonds Actually, it does make sense for fuel users to buy oil futures as a hedge. Then if oil prices go up, when they sell the futures they recoup part of the increased fuel costs they are paying. That said, there is a big difference between hedging (essentially taking out insurance) and speculating. Want to know how to tell the difference? Apply a tiny tax rate to the transactions, half a percent, and watch the speculators flee for the hills while the legitimate buyers and sellers shrug and go right along. Wanna bet the tax would be the first tax in history that lowered prices??? No, you would be financially punishing businesses that have a legitimate reason to hedge. I am very against that. And you know what the govt track record is on tiny tax rates.. they grow into bigger and bigger tax rates.. [8\|] Not to mention, there are lots of other futures markets that both the hedgers and speculators can go to and bypass the US govt entirely.. and they would keep their profits outside the US so no investment back in the US.. Isnt that (offshoring) what people are bitching so much now about the big corps??? More tax means more corps send money away from the US, never to come back.. Are there other futures markets that hedgers and speculators would want to use though? Europe has markets with stronger regulations, and probably either already have transaction taxes or will follow the US lead. So you are talking about what, the Iranian exchange? How much of your money will you be investing in an Iranian regulated exchange? One where you send your money to Iran, and they hold it for you? Or did you have a different nation in mind? Laws cost money, and you get what you pay for. Warren Buffett is smart enough to want to buy some safety and security for the rich...

tj444 -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/27/2012 8:13:29 PM)
quote: ORIGINAL: SoftBonds Are there other futures markets that hedgers and speculators would want to use though? Europe has markets with stronger regulations, and probably either already have transaction taxes or will follow the US lead. So you are talking about what, the Iranian exchange? How much of your money will you be investing in an Iranian regulated exchange? One where you send your money to Iran, and they hold it for you? Or did you have a different nation in mind? Laws cost money, and you get what you pay for. Warren Buffett is smart enough to want to buy some safety and security for the rich... What happened with MF Global in the US would not have happened in Europe.. I havent heard the results of where the millions in client money ended up disappearing to.. so you think the US is that safe? There is a new commodities exchange in Dubai, there is one in Singapore (Singapore is considered a tax haven),.. London (IPE),.. etc.. I posted about the Dubai exchange (DME) on another thread a while ago.. when someone was bitching about speculators.. I pointed out that the financial corps had invested in the DME and that I suspected that one reason they did was that if the US tried to regulate or tax them, then it was easy for them to switch operations away from the US and to Dubai.. In other words, the big financial corps are 10 steps ahead of the US govt.. "in 2008 that notably changed the DME’s shareholding structure; several trading firms and international financial institutions, namely Concord Energy, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Shell and Vitol, became shareholders of the DME" http://en.wikipedia.org/wiki/Dubai_Mercantile_Exchange Btw, I dont think much of Warren Buffet.. he profits very nicely from his connections in the White House.. just like the rest of em..

Edwynn -> RE: How The Gas Prices Are Manipulated By The Koch Brothers And Other Wall Street Players (2/27/2012 8:31:57 PM)
Have yourself a seat, this will come as a big shock to you ... Warren Buffett was worth many billions before this administration came to office. Even before Clinton came to office. He learned how to profit very nicely without the government handouts that the oil companies get, or getting into the administration and sending us to war on three occasions, or deregulating the financial industry, or ... and no Buffett lobby.

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