The Economy, stupid

[NorthSideSox72]

crude $135

 

$136

 

For perspectives sake since hitting an intraday low of $121.20 yesterday morning we are up over $15.00 a barrel. In other words if you had bought one crude oil futures contract at that time, you would be sitting on a $15,000 profit...

 

So who wants to form a commodity fund with me?

Just buy some Powershares.

 

[southsider2k5]

crude $135

 

$136

 

For perspectives sake since hitting an intraday low of $121.20 yesterday morning we are up over $15.00 a barrel. In other words if you had bought one crude oil futures contract at that time, you would be sitting on a $15,000 profit...

 

So who wants to form a commodity fund with me?

 

136

 

$137

[southsider2k5]

Didn't you tell us like 2 weeks ago that you bought in at $131 or something around that level?

 

I bought the July 150 calls when crude oil was at $123. If it goes to 155, I make $5k on the trade, because later on I sold the 155 calls for the same price. Its a free lottery ticket right now.

[southsider2k5]

Just buy some Powershares.

 

I like the globex options better personally. But that is just me.

 

Crude oil could very seriously go limit up for the first time that I EVER remember. Heating oil already did for a little bit.

 

Insane.

[Balta1701]

I like the globex options better personally. But that is just me.

 

Crude oil could very seriously go limit up for the first time that I EVER remember. Heating oil already did for a little bit.

 

Insane.

What is the limit?

[southsider2k5]

What is the limit?

 

$10.00

[NorthSideSox72]

I like the globex options better personally. But that is just me.

 

Crude oil could very seriously go limit up for the first time that I EVER remember. Heating oil already did for a little bit.

 

Insane.

I wrote some of the accounting interfaces used to connect with Globex, long ago. Hopefully they still work.

 

[southsider2k5]

136

 

$137

$138

 

$139

[southsider2k5]

I wrote some of the accounting interfaces used to connect with Globex, long ago. Hopefully they still work.

 

They are getting one hell of a workout today, that is for sure. The only thing you really see with these volume levels is the emini SP.

[NorthSideSox72]

They are getting one hell of a workout today, that is for sure. The only thing you really see with these volume levels is the emini SP.

It was freaky, the few times I went on the floor at the Merc or the Board, seeing people using the interfaces and programs I had built or changed. I just kept cringing, hoping they wouldn't break.

 

[StrangeSox]

We still want to say that this isn't being driven up on speculation?

[Balta1701]

We still want to say that this isn't being driven up on speculation?

Only when the price reaches a point where there's more oil in the market than there is demand for. If it was a speculatory bubble, it would cause a glut of supply to build on the market before it bursts.

[NorthSideSox72]

Only when the price reaches a point where there's more oil in the market than there is demand for. If it was a speculatory bubble, it would cause a glut of supply to build on the market before it bursts.

Hey SS, I see Balta has come to understand the dark side. ^^^

 

 

[Balta1701]

Hey SS, I see Balta has come to understand the dark side. ^^^

 

What, have I ever blamed this on speculators? I've been the one blaming this on the planet running out of oil!

[southsider2k5]

Hey SS, I see Balta has come to understand the dark side. ^^^

 

 

a convert to the dark side

[NorthSideSox72]

What, have I ever blamed this on speculators? I've been the one blaming this on the planet running out of oil!

Actually, I haven't seen you say either way. I was just playin with ya.

 

[Balta1701]

a convert to the dark side

Seriously when did I say anything otherwise?

 

A small price bump I could see being built in due to speculation, because the price would go up and that wouldn't be enough to really put a hurt on demand, but we're talking about a $10 bump today and like $60 in the last 6 months. If this was a speculatory bump, then it won't be long before there's a gigantic glut of oil sitting around somewhere that people can't sell at those prices.

[FlaSoxxJim]

What, have I ever blamed this on speculators? I've been the one blaming this on the planet running out of oil!

 

Fµ*king planet. . . :angry:

[StrangeSox]

Seriously when did I say anything otherwise?

 

A small price bump I could see being built in due to speculation, because the price would go up and that wouldn't be enough to really put a hurt on demand, but we're talking about a $10 bump today and like $60 in the last 6 months. If this was a speculatory bump, then it won't be long before there's a gigantic glut of oil sitting around somewhere that people can't sell at those prices.

 

My question is has demand or supply really changed enough to cause a $10 price bump in the last 24 hours? Or is it people speculating that demand or supply will change enough?

[jackie hayes]

My question is has demand or supply really changed enough to cause a $10 price bump in the last 24 hours? Or is it people speculating that demand or supply will change enough?

From the NYT:

 

Oil prices surged almost 8 percent, to $138.54 a barrel after a senior Israeli politician raised the specter of an attack on Iran and the dollar fell against the euro.

 

“As soon as that news hit the tape, oil spiked about $6,” said David Kovacs, an investment strategist at Turner Investment Partners.

 

Prices were buoyed further by a report from Morgan Stanley that predicted oil would reach $150 a barrel by July 4 because of higher demand in Asia. Shares of General Motors, whose fortunes can depend on oil prices, fell more than 4 percent, to a record low.

 

http://www.nytimes.com/2008/06/07/business/07stox.html

 

And there could be more. One of the funny things about market movements is how much things can shake when there's no discernible news. There usually is news, but it's not always easy to track it down when you're not on the ground.

[NorthSideSox72]

And there could be more. One of the funny things about market movements is how much things can shake when there's no discernible news. There usually is news, but it's not always easy to track it down when you're not on the ground.

 

THose sorts of things cause temporary spikes and falls. The overall trend though, is caused by much larger factors.

 

[Balta1701]

My question is has demand or supply really changed enough to cause a $10 price bump in the last 24 hours? Or is it people speculating that demand or supply will change enough?

The downwards trend of the past few days is probably, honestly, the mistake part. The $10 bump in 24 hours is just regaining a little bit of ground that it shouldn't have given back.

 

The best evidence I can present that oil isn't being driven by a speculatory bubble right now is in last week's inventory report. Right now, inventories on everything aren't historically low, but despite the price run up, they're not historically high either. So unless someone is hording oil somewhere in something that the EIA doesn't know about, the rapid upwards trend is supported by the supply and demand fundamentals.

[Balta1701]

One other random economic question...love to hear any suggestions on it. The "Unemployment percentage" has for like 15 years been held down by the growing number of people considered out of the work force because they weren't actively looking for work or for some other reason. The only way you're going to get as big of a spike in the unemployment percentage as we saw today while the economy only sheds 48,000 jobs (it's been losing ground for a couple months now and we saw nothing close to this much of a spike) is if a good number of people come back in to the system.

 

I'd love to hear suggestions about why for one month the numbers would suddenly show a significant number of additional people looking for work compared to the month before.

[jackie hayes]

THose sorts of things cause temporary spikes and falls. The overall trend though, is caused by much larger factors.

I mean the minute-to-minute movements, not a trend. Though I'm sceptical about how temporary those are.

[southsider2k5]

http://www.bizzyblog.com/2008/06/10/dirty-...-climate-taxes/

 

The supposedly surprising rejection of the Lieberman-Warner climate bill last week had an element that Old Media in the US hasn’t covered, but is very relevant.

 

While the press is ever eager to jump on politicians who fly in the face of supposed “world opinion” when it goes against US positions and traditions, it has been virtually silent over how “the rest of the world” has been rejecting the true linchpin of government climate policies: supposedly climate change-related higher taxes and fees. Surely some of the green-leaning Senators who were supposedly on board but voted against cloture were not blind to this.

 

Consider the following:

 

* Germany — “German Car Tax Plan to Be Delayed: Government.”

* In Canada, a sympathetic columnist cautions the Liberal Party, which seems to think that the road back into power is through green taxes, about “The Suicidal Allure of a Carbon Tax.”

* Australia — “The Sun Sets on Rudd’s Climate Change Credibility.”

* New Zealand — “Emissions Bill Hanging by Thread”

 

Each story is about how a government or party is finding that citizens/voters are not at all keen on reducing their living standards in the name of supposed environmental purity.

 

The biggest media blackout is over the political situation in Great Britain, where Tony Blair’s successor Gordon Brown hangs by a thread, largely because of his radical environmental initiatives.

 

Brown continues to push his “Green Road Tax” on “environmentally unfriendly cars.” Poorer Britons stand to be hit hardest, while his environmental minister plays the save-the-planet card:

 

Owners of the most polluting cars in band M will pay £440 (about $870) in tax. And from April 2010, people buying the most polluting cars would pay a one-off “showroom tax” of up to £950 (about $1,900).

 

(Environmental Minister Joan) Ruddock added: “What we can’t do is lose sight of the environment agenda because this is everybody’s future, the future of the planet.”

 

She denied the retrospective aspect of the policy was unfair.

 

“Over a 10 year period…I think the direction we have been going in has been clear to people at the time,” she said.

 

In other words, according to Ms. Ruddock, “Your crystal balls should have told you these taxes were coming.”

 

Two weeks ago, a one-day strike by lorry drivers (truckers) over high fuel prices shut down London’s roads in what was called the “capital’s largest-ever fuel protest.”

 

If most of all of this is news to you, it’s because the US press is studiously ignoring it. New York Times stories about Brown’s situation on May 14 and May 23 have not a word about the Green Road Tax, even though many Labour MPs have been calling it a “ticking time bomb” for several weeks. Wire-service stories have also been few and far between.

 

There are three lessons here:

 

* The tax plans environmentalists want invariably end up taking their pound of flesh from the people they supposedly care about the most.

* Once people see through it, they rebel.

* Politicians interested in self-preservation aren’t about to commit political suicide in the name of greenness. Their best hope is that the news media keep details of the costs away from public view until after legislation passes — a tough task indeed in the New Media Age.

 

Cross-posted at NewsBusters.org.