Lies and Lying Liberals

Discussion in 'Politics & Law' started by Elf1, Aug 2, 2008.

  1. Elf1

    Elf1 Registered Member

    Trying to take a new spin on a very tired book by a leftist, Michael Moron, I mean, Michael Moore.

    Question:

    Can anyone on this site actually give a coherent explanation that ties speculators to the rise in oil prices?

    I actually have my series 31 license. To those that don't know, it allows me to trade in futures commodities...meaning that I am licensed to be a speculator.

    And for those that don't know what that entails, it means I can take a random guess TODAY on any item, try to predict what the cost will be in 6, 9, 12 months or more...and make a bet.

    For example...if something costs $10 today, but I think it will cost $20 in six months, I buy a contract. I am willing to pay $12 today for that future contract. That means that in 6 months, I get that item for $12.

    Now, if I am correct, and that item costs $20, then I made $8 profit. I only had to pay $12 for something that costs $20. I buy for $12, sell for $20.

    However, if I am wrong, and the market for that item falls to $5, then I lose. I still have to pay $12, but can only sell it for $5. Essentially, I am losing $7 for that contract.

    Speculation affects the prices of things about as much as betting the over-under on a football game affects the score.

    So anyone...please...all you liberals who love Pelosi and Harry Reid, please give an explanation that shows where speculators have caused high gas prices.

    And once you are done, apply to work for Harry Reid, or Nancy Pelosi. Neither one is able to give an answer, nor their staff, for that very question. I know, cause I have repeatedly asked.
     

  2. Bananas

    Bananas Endangered Species

    Is this an attack on liberals or do you genuinely not understand how speculation leads to inflated prices if that is the case:sigh:?

    I'm not going to answer directly to oil;
    As a speculator you have to be careful not to release hot stock tips as this can unstable a market(and is illegal) however as you are a speculator you will only speculate on what you believe to be a cert. If you are a good speculator then your actions are noticed. People are gullible sheep, if you say that copper will rise $200 a tonne by the end of the year, people will invest in copper based on your speculation. When more and more people invest in a product, the product becomes sought after and thus the price rises and hey bingo your speculation was correct.
     
  3. Matriqulated

    Matriqulated Future is Fused 3036A.D.

    It is all bullshit. The gas companies are raiding our pockets while the getting is still good because they know once Bush is out the free ride will be over and stricter regulations may be put into place. It's almost over, sort of... I hope.
     
  4. Elf1

    Elf1 Registered Member

    You discuss 2 different things.

    Insider trading happens whether you are a speculator or not.

    Markets are different for both. The process is about the same, but speculation does NOT lead to inflation.

    And you don't speculate on certainties. It is impossible. You can win big, but you also lose big.

    Speculation has been around for years and years. It has NEVER caused problems in the market.

    You are simply wrong.
    ------
    Another fallacy that is sold by the liberals to ignorant people.

    Econ 101, and I will use shoes as an example.

    I make shoes and it costs me $10. I sell them for $11. I make a $1 profit that equals 10% (a 10% profit margin).

    That first year, I sell 5 pairs of shoes. Grand total of $5 profit. That is a record.

    The next year, I sell 40 pairs of shoes. Grand total profit of $40. Still the same costs, same selling price, same profit margin. Yet record profits.

    The next year I sell 400,000 pairs of shoes. Grand total profit of $400,000. Same costs, same selling price, same profit margin. But record profits.

    The essential thing to look at in all of this is the profit margin. 10%. Not very much. Less than drug companies and tech companies make.

    THAT is the same with oil. Yes, the oil companies made record profits. But at a 10% profit margin.

    What does that mean? It means their record profits aren't by gouging consumers, but because they are selling more of their product, just as I sold more shoes.

    (another way to tell you that oil companies are a scape-goat is because they are called in front of congressional hearings every year...and yet there has not been any blame to them.)
     
    Last edited: Aug 5, 2008
  5. Doc

    Doc Trust me, I'm The Doctor. V.I.P.

    It has nothing to do with the price of gas nearly quadrupling since Bush took office?
     
  6. Jeanie

    Jeanie still nobody's bitch V.I.P. Lifetime

    Here's a link to a report published by the Council on Foreign Relations
    The Role of the Market Speculation in Rising Oil and Gas Prices, Senate Staff Report - Council on Foreign Relations

    You might also want to read the entire document that is summarized in the above link to see if there's an answer to your question instead of engaging in Left-bashing and name-calling that's typical of the Right Wing.

    http://levin.senate.gov/newsroom/supporting/2006/PSI.gasandoilspec.062606.pdf
    ------
    Actually, Elf, a 10% profit margin is pretty high; most airlines operate at around a 5% profit margin.
     
    Last edited: Aug 5, 2008
  7. MenInTights

    MenInTights not a plastic bag

    The one good thing about oil being traded on the open market is that when the price falls, it can drop rapidly.

    It also creates supply incentives. In 198(something) when Hurricane Hugo came through, there was a guy in Charleston selling water for $20/ gallon because there was no fresh water. The media covered the guy and everyone was outraged. There were also hundreds of people flooding to Charleston with pickups full of water to make some quick money. Immediately, the price of fresh water collapsed. Of course oil is a little more difficult to get than water, but theory is the same. Let market forces, including speculators, control the price of oil and you get the cheapest price, eventually.

    If the price of oil can get artificially too high, it can also get artificially too low also.
     
  8. Bananas

    Bananas Endangered Species

    You say I am wrong but give no defining argument explaining why I am wrong, please elaborate, I went into the time and effort to reply to your post, so please educate me on why I am wrong.

    If you can explain to me about the Souk-al-manakh crash in 1982 and the role speculators had in this?

    If you can also explain to me how a speculator is not an investor in future markets and that speculators do not overprice/underprice products above their true worth that would accelerate selling/buying?

    Do all of the above and then I will happily admit that I am wrong and not need someone to tell me that I am wrong in a bold and unsupported statement. If you want a debate then follow the protocol of one.
     
    Last edited: Aug 5, 2008

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