What is your price per gallon for diesel?
#46
01-01-2011, 05:35 PM
=how trading happens on the CME(my grandfather did that as well, mainly for corn and cotton futures though).
Is the greed angle there? Bet your *** it is. Is it as clear cut as you like to think that it is? No. Very little in life is as clear cut, black and white as people would like to think that it is.=.
Is the greed angle there? Bet your *** it is. Is it as clear cut as you like to think that it is? No. Very little in life is as clear cut, black and white as people would like to think that it is.=.
The difference from the good old days of a few exchanges like CME, London, etc. dominating the business is that there are now a huge amount of derivatives out there, none of them traded on a regular exchange (or have a standardized registration number).
There are wild guesses as to how many of these instruments are out there, and what the net size of the notional market is relative to the real market.
Then there are the long time problems, such as commodities like oil often trading according to two indexes like Brent and WTIC, which have tiny "real" markets and thus, are incredibly easy to manipulate.
When the size of the notional market vastly (e.g. 2X) exceed the size of the real market, you enter into the netherland of Hyman Minsky where financial instability can be endemic --- and there is no reason for markets to "find" the price properly.
That is the situation today... not just in oil, but also in many commodities, stocks, and so on.
#47
01-01-2011, 05:44 PM
When the size of the notional market vastly (e.g. 2X) exceed the size of the real market, you enter into the netherland of Hyman Minsky where financial instability can be endemic --- and there is no reason for markets to "find" the price properly.
That is the situation today... not just in oil, but also in many commodities, stocks, and so on.
That is the situation today... not just in oil, but also in many commodities, stocks, and so on.
The price is never really "found" period. You'll have peaks and valleys around the EQ price, but it will hardly ever be right on. When it is, it is usually in transition between those peaks and valleys.
#48
01-01-2011, 05:56 PM
I think you are alluding to the bull and bear market mentality. That has been around long before now. That's actually apart of human nature, that won't change, not within our lifetime for sure, not unless there is a forced changed really.
The price is never really "found" period. You'll have peaks and valleys around the EQ price, but it will hardly ever be right on. When it is, it is usually in transition between those peaks and valleys.
The price is never really "found" period. You'll have peaks and valleys around the EQ price, but it will hardly ever be right on. When it is, it is usually in transition between those peaks and valleys.
I am referring to the "notional" or financial economy vs. the "real" economy,
Minisky summarized it as follows;
"Three distinct income-debt relations for economic units, which are labeled as hedge, speculative, and Ponzi finance, can be identified. Hedge financing units are those which can fulfill all of their contractual payment obligations by their cash flows: the greater the weight of equity financing in the liability structure, the greater the likelihood that the unit is a hedge financing unit. Speculative finance units are units that can meet their payment commitments on 'income account' on their liabilities, even as they cannot repay the principal out of income cash flows. Such units need to 'roll over' their liabilities — issue new debt to meet commitments on maturing debt. For Ponzi units, the cash flows from operations are not sufficient to fill either the repayment of principal or the interest on outstanding debts by their cash flows from operations. Such units can sell assets or borrow. Borrowing to pay interest or selling assets to pay interest (and even dividends) on common stocks lowers the equity of a unit, even as it increases liabilities and the prior commitment of future incomes.
It can be shown that if hedge financing dominates, then the economy may well be an equilibrium-seeking and containing system. In contrast, the greater the weight of speculative and Ponzi finance, the greater the likelihood that the economy is a deviation-amplifying system. The first theorem of the financial instability hypothesis is that the economy has financing regimes under which it is stable, and financing regimes in which it is unstable. The second theorem of the financial instability hypothesis is that over periods of prolonged prosperity, the economy transits from financial relations that make for a stable system to financial relations that make for an unstable system.
In particular, over a protracted period of good times, capitalist economies tend to move to a financial structure in which there is a large weight to units engaged in speculative and Ponzi finance. Furthermore, if an economy is in an inflationary state, and the authorities attempt to exorcise inflation by monetary constraint, then speculative units will become Ponzi units and the net worth of previously Ponzi units will quickly evaporate. Consequently, units with cash flow shortfalls will be forced to try to make positions by selling out positions. This is likely to lead to a collapse of asset values."
It can be shown that if hedge financing dominates, then the economy may well be an equilibrium-seeking and containing system. In contrast, the greater the weight of speculative and Ponzi finance, the greater the likelihood that the economy is a deviation-amplifying system. The first theorem of the financial instability hypothesis is that the economy has financing regimes under which it is stable, and financing regimes in which it is unstable. The second theorem of the financial instability hypothesis is that over periods of prolonged prosperity, the economy transits from financial relations that make for a stable system to financial relations that make for an unstable system.
In particular, over a protracted period of good times, capitalist economies tend to move to a financial structure in which there is a large weight to units engaged in speculative and Ponzi finance. Furthermore, if an economy is in an inflationary state, and the authorities attempt to exorcise inflation by monetary constraint, then speculative units will become Ponzi units and the net worth of previously Ponzi units will quickly evaporate. Consequently, units with cash flow shortfalls will be forced to try to make positions by selling out positions. This is likely to lead to a collapse of asset values."
Economic Dreams - Economic Nightmares: Subprime Mess as Minsky' Financial Instability
Hyman Minsky - Wikipedia, the free encyclopedia
The gist of this is that we are in the early part of a crunch... with much more to come.
#49
01-01-2011, 06:01 PM
#50
01-01-2011, 06:04 PM
In theory...maybe. Unfortunately, these are one of those things that you really don't know until after it's hit to really qualify it is a "crunch" or going to lead to more(or sustained).
The beginning and ends of these are hard to determine until after the fact, if they are correctly pinpointed at all.
#51
01-01-2011, 08:39 PM
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USGS: Less Oil in Alaska Reserve Than Once Thought - ABC News
Also the USGS recently announced that the oil reserves are now estimated to be less than 1/10th of what they thought they had their in 2002.
Not Good my friends!
Also the USGS recently announced that the oil reserves are now estimated to be less than 1/10th of what they thought they had their in 2002.
Not Good my friends!
#52
01-01-2011, 11:15 PM
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Wish we had your fuel prices - here on the Island fuel cost converts very roughly to approx. $4.40 a gallon. We are a petroleum producing country but the lions share of the price is tax. Someone has to pay for our socialist dream, I suppose.
As far as petroleum reserves the Alberta tar sands are supposed to exceed those of Arabia. Only problem is all the big name papers seem to have placed full page ads advising it is "dirty" oil and many big name companies are allegedly refusing to buy "tar sand dirty" oil, so I can only surmise that the price of fuel has not yet approached the pain threshold in the economy. China however is probably quite anxious to tap into this reserve and all it needs is the pipe line to Prince Rupert.
As far as petroleum reserves the Alberta tar sands are supposed to exceed those of Arabia. Only problem is all the big name papers seem to have placed full page ads advising it is "dirty" oil and many big name companies are allegedly refusing to buy "tar sand dirty" oil, so I can only surmise that the price of fuel has not yet approached the pain threshold in the economy. China however is probably quite anxious to tap into this reserve and all it needs is the pipe line to Prince Rupert.
#53
01-02-2011, 12:38 AM
Here in Switzerland we pay currently $6.70 a gallon but we have an excellent public transport system powered with electric energy produced with hydroelectricity. Considering the fact (not the theory) of global warming as we can see it with our own eyes on the melting glaciers in the alps and the problems and real cost ahead caused by buring oil, the prices should be even $5 higher. That is the 'writing on the wall', can you read it?
#54
01-02-2011, 07:00 AM
Cargo Master
#55
01-02-2011, 07:45 AM
Here in Switzerland we pay currently $6.70 a gallon but we have an excellent public transport system powered with electric energy produced with hydroelectricity. Considering the fact (not the theory) of global warming as we can see it with our own eyes on the melting glaciers in the alps and the problems and real cost ahead caused by buring oil, the prices should be even $5 higher. That is the 'writing on the wall', can you read it?
As to whether it's fact or fiction, there isn't enough evidence either way to show one way or the other. We just don't have all the facts, we really don't. Climate, unlike weather, spans many many many years(vs weather in terms of weeks), there are things that might be a natural course of action that we just aren't used to. Just like I don't think that the spring thaw is due to man-made global warming as everyone in my family that is still alive has dealt with the same thing, but that's something we are used to.
Hell we could be coming out of an ice age for all I know. I am not saying that man-made global warming may not be happening, but whether or not we can call it fact just yet. When you compound that with the issue of integrity of the body of scientists that is supposed to collect data on this and trust their opinion, that makes it even harder.
#56
01-02-2011, 08:18 AM
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I agree!
How is that water "consumed" in the process of using it for hydroelectricity? Depending on that, you may not be as green as you think.
As to whether it's fact or fiction, there isn't enough evidence either way to show one way or the other. We just don't have all the facts, we really don't. Climate, unlike weather, spans many many many years(vs weather in terms of weeks), there are things that might be a natural course of action that we just aren't used to. Just like I don't think that the spring thaw is due to man-made global warming as everyone in my family that is still alive has dealt with the same thing, but that's something we are used to.
Hell we could be coming out of an ice age for all I know. I am not saying that man-made global warming may not be happening, but whether or not we can call it fact just yet. When you compound that with the issue of integrity of the body of scientists that is supposed to collect data on this and trust their opinion, that makes it even harder.
As to whether it's fact or fiction, there isn't enough evidence either way to show one way or the other. We just don't have all the facts, we really don't. Climate, unlike weather, spans many many many years(vs weather in terms of weeks), there are things that might be a natural course of action that we just aren't used to. Just like I don't think that the spring thaw is due to man-made global warming as everyone in my family that is still alive has dealt with the same thing, but that's something we are used to.
Hell we could be coming out of an ice age for all I know. I am not saying that man-made global warming may not be happening, but whether or not we can call it fact just yet. When you compound that with the issue of integrity of the body of scientists that is supposed to collect data on this and trust their opinion, that makes it even harder.
I agree 100%...
#59
01-02-2011, 08:34 AM
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#60
01-02-2011, 08:37 AM
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I just found this a few days ago. It just saved me nearly a quarter a gallon yesterday.
Diesel Tracker – VW TDI
Diesel Tracker – VW TDI