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Main
Date: 15 Sep 2007 23:48:34
From: Paul Borg
Subject: Contradictory Facts
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This graph appears to refute the claim that oil is at an all time high:
http://www.wtrg.com/oil_graphs/oilprice1869.gif
Either the graph is wrong, or the recent hysteria over $80 a barrell oil is
being overstated, probably funded through a dis-information campaign funded
by a major bicycle maker.
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Date: 23 Sep 2007 05:46:35
From:
Subject: Re: Contradictory Facts
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On Sep 22, 10:41 am, vey <jun...@ericvey.com > wrote:
> r15...@aol.com wrote:
> > Those who buy in now and hope the price will simply march up from here
> > are likely to be disappointed as they watch the price fall back into
> > the 70's for a time, or lower. A more complete collapse of the housing
> > market could spark a global recession and a corresponding drop in the
> > demand for and price of energy.
>
> Eventually, there will be a slight, but significant drop in demand. When
> that happens look for the hedge fund speculators to panic and bail. When
> they bail, the price will crash because it is being kept artificially
> high. We don't have any idea of how deep the speculators are in because
> of the new private markets.
>
> To buy energy futures now is a fool's game. How can you bet against the
> speculators when you can't even know what they are doing? At the track,
> they post the odds so that you know what the other bettors are doing and
> can act accordingly. Many gamblers won't bet if they don't think the
> winner will pay at least 4-1. This hurts even the "technicians" who
> don't care much about supply, demand or peak or anything else, all they
> worry about is data and price movement, but without key pieces of data,
> they are screwed, too.
>
> As one of my citations pointed out, even when demand goes down and
> delivery isn't taken, the price still goes up, at least it appears to,
> but the new private markets cast a big question mark over the whole
> process. Wouldn't much matter if we were talking about pork bellies or
> OJ futures. Most people can do entirely without bacon or juice. But the
> pork belly market is more public than the energy market, right now.
Again, the price of oil futures contract is that which attracts an
equal number of buyers and sellers. If traders thought the price was
inflated a preponderance of them would short the contract and the
price would come down.
The 'bottom' is not going to be knocked out of the price of oil ever
again. As I said, look for the price to come back into the 70s maybe
even the 60s, as it fluctuates wildly at the top of the production
curve. Sell short now, then buy on the dip. Lather, rinse, repeat.
Long term, oil is going up. Month by month, the all-time high for
global oil production seems to have occurred sometime in the middle of
last year. That has nothing to do with speculation in the futures
markets, and everything to do with supply/demand fundamentals.
A good argument to be made that the price is in fact held artificially
LOW, due to massive disinformation campaign by big oil companies and
decades of outright lying about reserves from producing nations. When
full information comes into the market, when people realize that we're
embarking on a perilous journey down the backside of a curve that
could be much steeper than predicted, look out.
Robert
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Date: 17 Sep 2007 19:42:33
From: Chalo
Subject: Re: Contradictory Facts
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On Sep 17, 1:36 pm, A Muzi <a...@yellowjersey.org > wrote:
> > A Muzi wrote:
> >> Look at the cost of oil in gold and you'll stop being excited by
> >> would-be Cassandras.
> Chalo wrote:
> > For those of us who don't get paid in gold or oil, it is still of
> > concern. Been thinking of turning my nest egg into somebody else's
> > currency. Bushbucks are smelling worse by the day.
>
> It is what it is.
> 'Cheap oil' was a different complaint with another set of whining.
> Adjust, buy what you need and/or change what you 'need'. Just like any
> other commodity. The loudest complaints I hear about fuel prices are
> from people who damned near live in the car - to no apparent purpose.
> That is not a 'necessity'.
Unfortunately, change in the price of oil has an almost directly
proportional effect on the cost of food, electricity. and natural gas,
and it has a less direct effect on the cost of goods that require much
energy to produce, or those that must be transported to where they are
consumed. In other words, the price of oil dictates the cost of
practically everything. For regular folks, the effect of an increase
in the price of oil is almost the same as the effect of a decrease in
the value of the dollar, making it almost immaterial which of those
two things is actually happening.
> On a positive note, sustained high fuel costs may eventually spur a
> nuclear/hydrogen economy , pretty cool concept IMHO.
We'll see. The folks in charge of nuclear power have a pretty strong
track record of turning gold into lead, but who knows? Maybe our
society has become more efficient and less corrupt since the golden
age of nuclear plant cost overruns and safety scares. ;^)
Chalo
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Date: 16 Sep 2007 19:12:39
From: David L. Johnson
Subject: Re: Contradictory Facts
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Paul Borg wrote:
> This graph appears to refute the claim that oil is at an all time high:
>
> http://www.wtrg.com/oil_graphs/oilprice1869.gif
>
> Either the graph is wrong, or the recent hysteria over $80 a barrell oil is
> being overstated, probably funded through a dis-information campaign funded
> by a major bicycle maker.
Yeah, sure, Trek is out to produce a world-wide propaganda campaign to
get us to abandon our cars for their bikes.
But before you read any sort of conspiracy theory into this graph,
consider that the equating of "2006 dollars" over a hundred-year span is
at best an inexact science, and at worst utter BS. Going back to the
60s is more reasonable, and there we see that, aside from Nixon's time,
we are indeed facing unprecedented gas prices.
--
David L. Johnson
Arguing with an engineer is like mud wrestling with a pig...
You soon find out the pig likes it!
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Date: 16 Sep 2007 21:02:50
From: bjw@mambo.ucolick.org
Subject: Re: Contradictory Facts
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On Sep 16, 12:48 am, "Paul Borg" <xpostr...@webtv.nit > wrote:
> This graph appears to refute the claim that oil is at an all time high:
>
> http://www.wtrg.com/oil_graphs/oilprice1869.gif
>
> Either the graph is wrong, or the recent hysteria over $80 a barrell oil is
> being overstated, probably funded through a dis-information campaign funded
> by a major bicycle maker.
If we believe that graph, oil is pretty expensive compared to
a few years ago, which has consequences. Whether or not it's
as high as the first barrel pumped from Titusville is immaterial.
But anyway, that's irrelevant. Peak oil conspiracy theories
are nothing compared to a conspiracy theory in which bicycle
manufacturers are funding major disinformation campaigns!
The bike biz is much too small to do that. It's like
saying that the kids down the street with a lemonade
stand financed medical studies against saccharin and
Nutrasweet.
Ben
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Date: 16 Sep 2007 17:17:31
From: vey
Subject: Re: Contradictory Facts
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bjw@mambo.ucolick.org wrote:
It's like
> saying that the kids down the street with a lemonade
> stand financed medical studies against saccharin and
> Nutrasweet.
Well? Didn't they? Can you prove that they didn't? I heard their father
was a doctor and we all know that doctors are loaded, so maybe they had
some "help"?
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Date: 16 Sep 2007 15:18:42
From: A Muzi
Subject: Re: Contradictory Facts
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Paul Borg wrote:
> This graph appears to refute the claim that oil is at an all time high:
> http://www.wtrg.com/oil_graphs/oilprice1869.gif
> Either the graph is wrong, or the recent hysteria over $80 a barrell oil is
> being overstated, probably funded through a dis-information campaign funded
> by a major bicycle maker.
Look at the cost of oil in gold and you'll stop being excited by
would-be Cassandras.
--
Andrew Muzi
www.yellowjersey.org
Open every day since 1 April, 1971
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Date: 16 Sep 2007 18:38:38
From: vey
Subject: Re: Contradictory Facts
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A Muzi wrote:
> Paul Borg wrote:
>> This graph appears to refute the claim that oil is at an all time high:
>> http://www.wtrg.com/oil_graphs/oilprice1869.gif
>> Either the graph is wrong, or the recent hysteria over $80 a barrell
>> oil is
>> being overstated, probably funded through a dis-information campaign
>> funded
>> by a major bicycle maker.
>
> Look at the cost of oil in gold and you'll stop being excited by
> would-be Cassandras.
Why don't you provide us with a link? Or do you make a habit of making
bald assertions? And are you aware that the "price" of gold is directly
determined by how much "money" the Fed decides to print? So much for
"free market" theories.
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Date: 16 Sep 2007 09:35:08
From: vey
Subject: Re: Contradictory Facts
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Paul Borg wrote:
> This graph appears to refute the claim that oil is at an all time high:
>
> http://www.wtrg.com/oil_graphs/oilprice1869.gif
>
> Either the graph is wrong, or the recent hysteria over $80 a barrell oil is
> being overstated, probably funded through a dis-information campaign funded
> by a major bicycle maker.
>
>
I think if you read carefully, most responsible journalists the claim is
"near" an all time high if adjusted for inflation. As to cause, well
let's think about that.
What other commodity's pricing recently deviated widely from the reality
of the fundamentals the same way crude oil has? And what was the cause
of that deviation in pricing? And didn't most people eventually think
that there was only one way the prices could go? All sorts of business
shenanigans happened and we don't even know about most of them.
Stumped? Check it out:
http://www.palmbeachpost.com/business/content/business/epaper/2007/09/15/a8b_oilprices_0915.html
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Date: 16 Sep 2007 15:47:31
From: A Muzi
Subject: Re: Contradictory Facts
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> Paul Borg wrote:
>> This graph appears to refute the claim that oil is at an all time high:
>> http://www.wtrg.com/oil_graphs/oilprice1869.gif
>> Either the graph is wrong, or the recent hysteria over $80 a barrell
>> oil is
>> being overstated, probably funded through a dis-information campaign
>> funded
>> by a major bicycle maker.
vey wrote:
> I think if you read carefully, most responsible journalists the claim is
> "near" an all time high if adjusted for inflation. As to cause, well
> let's think about that.
> What other commodity's pricing recently deviated widely from the reality
> of the fundamentals the same way crude oil has? And what was the cause
> of that deviation in pricing? And didn't most people eventually think
> that there was only one way the prices could go? All sorts of business
> shenanigans happened and we don't even know about most of them.
> Stumped? Check it out:
> http://www.palmbeachpost.com/business/content/business/epaper/2007/09/15/a8b_oilprices_0915.html
from that link:
"calling on Congress for more oversight of the so-called "dark markets"
- unregulated, over-the-counter commodities markets"
Maybe the feds could completely control oil price/availability - like
heroin, where they do such a great job.
"If government could control the price and supply of anything communism
would have worked"
--
Andrew Muzi
www.yellowjersey.org
Open every day since 1 April, 1971
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Date: 16 Sep 2007 17:10:12
From: vey
Subject: Re: Contradictory Facts
|
A Muzi wrote:
>> Paul Borg wrote:
>>> This graph appears to refute the claim that oil is at an all time high:
>>> http://www.wtrg.com/oil_graphs/oilprice1869.gif
>>> Either the graph is wrong, or the recent hysteria over $80 a barrell
>>> oil is
>>> being overstated, probably funded through a dis-information campaign
>>> funded
>>> by a major bicycle maker.
>
> vey wrote:
>> I think if you read carefully, most responsible journalists the claim
>> is "near" an all time high if adjusted for inflation. As to cause,
>> well let's think about that.
>> What other commodity's pricing recently deviated widely from the
>> reality of the fundamentals the same way crude oil has? And what was
>> the cause of that deviation in pricing? And didn't most people
>> eventually think that there was only one way the prices could go? All
>> sorts of business shenanigans happened and we don't even know about
>> most of them.
>> Stumped? Check it out:
>> http://www.palmbeachpost.com/business/content/business/epaper/2007/09/15/a8b_oilprices_0915.html
>
>
> from that link:
> "calling on Congress for more oversight of the so-called "dark markets"
> - unregulated, over-the-counter commodities markets"
> Maybe the feds could completely control oil price/availability - like
> heroin, where they do such a great job.
>
> "If government could control the price and supply of anything communism
> would have worked"
The problem is that oil is a heavily subsidized commodity. In this way,
the Feds already control the prices and availability.
If you want to take off all the subsidies, then maybe your argument
would hold some water. To take off the subsidies we would have to:
1. Stop spending any more money in the Middle East. That means no more
money to Israel, stop patrolling the Persian Gulf, and stop selling arms
to the Saudis among "other things." If the oil companies want security,
then they will have to hire it.
2. Stop subsidizing barge and ocean shipping (no more Army Corp dredging
projects) and start taxing trucks at what it actually costs to maintain
the highways they pound into rubble with their (often over) weight.
3. No more ethanol subsidies.
4. No more government owned and operated airports.
5. People would be able to sue if a refinery fouled their breathing
space. The "smells like money" bunch wouldn't have to join in since they
like emphysema.
These are just the ones off the top of my head. I'm sure that I and
others can think of other subsidies that the "free market" you pretend
is there should control.
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Date: 16 Sep 2007 19:26:54
From: Luke
Subject: Re: Contradictory Facts
|
In article <fck5tq$iu1$1@news.datemas.de >, vey <junker@ericvey.com>
wrote:
> A Muzi wrote:
> >> Paul Borg wrote:
> >>> This graph appears to refute the claim that oil is at an all time high:
> >>> http://www.wtrg.com/oil_graphs/oilprice1869.gif
> >>> Either the graph is wrong, or the recent hysteria over $80 a barrell
> >>> oil is
> >>> being overstated, probably funded through a dis-information campaign
> >>> funded
> >>> by a major bicycle maker.
> >
> > vey wrote:
> >> I think if you read carefully, most responsible journalists the claim
> >> is "near" an all time high if adjusted for inflation. As to cause,
> >> well let's think about that.
> >> What other commodity's pricing recently deviated widely from the
> >> reality of the fundamentals the same way crude oil has? And what was
> >> the cause of that deviation in pricing? And didn't most people
> >> eventually think that there was only one way the prices could go? All
> >> sorts of business shenanigans happened and we don't even know about
> >> most of them.
> >> Stumped? Check it out:
> >>
> >> http://www.palmbeachpost.com/business/content/business/epaper/2007/09/15/a8
> >> b_oilprices_0915.html
> >
> >
> > from that link:
> > "calling on Congress for more oversight of the so-called "dark markets"
> > - unregulated, over-the-counter commodities markets"
> > Maybe the feds could completely control oil price/availability - like
> > heroin, where they do such a great job.
> >
> > "If government could control the price and supply of anything communism
> > would have worked"
>
> The problem is that oil is a heavily subsidized commodity. In this way,
> the Feds already control the prices and availability.
Hardly. Sordid geopolitics and armed incursions notwithstanding the
price and availability of oil has been largely beyond the control of
the Americans for over a generation. OPEC proved that 34 years ago.
Oil is now a fungible global commodity following the laws of supply and
demand and subject to the vagaries of the market.
>
> If you want to take off all the subsidies, then maybe your argument
> would hold some water. To take off the subsidies we would have to:
> 1. Stop spending any more money in the Middle East. That means no more
> money to Israel, stop patrolling the Persian Gulf, and stop selling arms
> to the Saudis among "other things." If the oil companies want security,
> then they will have to hire it.
> 2. Stop subsidizing barge and ocean shipping (no more Army Corp dredging
> projects) and start taxing trucks at what it actually costs to maintain
> the highways they pound into rubble with their (often over) weight.
> 3. No more ethanol subsidies.
> 4. No more government owned and operated airports.
> 5. People would be able to sue if a refinery fouled their breathing
> space. The "smells like money" bunch wouldn't have to join in since they
> like emphysema.
>
> These are just the ones off the top of my head. I'm sure that I and
> others can think of other subsidies that the "free market" you pretend
> is there should control.
It's not a newsflash: The free market ain't free at all. Vis oil, why
try to control what you can't? Better that you embark on a sane energy
policy and direct the subsidies where they will do most good.
<excerpt >
"
....Let me conclude by restating our overall objective...our
independence will depend on maintaining and achieving self-sufficiency
in energy...
...The capacity for self-sufficiency in energy is a great goal. It is
also an essential goal, and we are going to achieve it.
Tonight I ask all of you to join together in moving toward that goal,
with the spirit of discipline, self-restraint, and unity which is the
cornerstone of our great and good country."
</excerpt >
Tricky Dicky
Address to the Nation About National Energy Policy.
November 25th, 1973
Didn't Carter say the same? And Clinton? And Bush II?
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Date: 16 Sep 2007 20:24:55
From: vey
Subject: Re: Contradictory Facts
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Luke wrote:
>
> Hardly. Sordid geopolitics and armed incursions notwithstanding the
> price and availability of oil has been largely beyond the control of
> the Americans for over a generation. OPEC proved that 34 years ago.
Can you even *imagine* what the true price would be if oil wasn't
subsidized? Think about it: one small ship with a crew of 300 in the
Persian Gulf costs over a million dollars a day to operate and we
routinely keep at least twenty of them there. Never mind the costs of
operating an A/C with a crew of 5,000 and right now there are at least
two of them there. If there was no subsidy, the oil companies would be
paying for that and oil prices would reflect it. After all, if it can't
be moved to a place it can be sold, it's pretty much worthless.
>
> Oil is now a fungible global commodity following the laws of supply and
> demand and subject to the vagaries of the market.
Not when the speculators take over.
You didn't see that when house prices went crazy? You think that "Flip
That House" and all of it's TV derivatives weren't really happening all
over the US? Right now, my taxes reflect these nutty prices and what
fools paid for "investments" that are now empty, that they can't unload
for half of what they paid.
You didn't see that with the crazy dot com fiasco? When there were
people telling us (with a straight face) on the Today Show, that the
reason the fundamentals "didn't work anymore" was because we had "new
economy."
That wasn't "the market" at work. That was the Fed fiddling with the
money supply.
The fundamentals aren't working with oil either. Time to find out why.
>
> It's not a newsflash: The free market ain't free at all. Vis oil, why
> try to control what you can't? Better that you embark on a sane energy
> policy and direct the subsidies where they will do most good.
>
Then why pretend there is a "free market" when there hasn't been one
since the 1880's? The reason that the subsidies will continue is because
the corporations and the rich want them to. Sanity has nothing to do
with it.
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Date: 16 Sep 2007 21:41:45
From: Luke
Subject: Re: Contradictory Facts
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In article <fckhav$m3o$1@news.datemas.de >, vey <junker@ericvey.com>
wrote:
> Luke wrote:
>
> >
> > Hardly. Sordid geopolitics and armed incursions notwithstanding the
> > price and availability of oil has been largely beyond the control of
> > the Americans for over a generation. OPEC proved that 34 years ago.
>
> Can you even *imagine* what the true price would be if oil wasn't
> subsidized? Think about it: one small ship with a crew of 300 in the
> Persian Gulf costs over a million dollars a day to operate and we
> routinely keep at least twenty of them there. Never mind the costs of
> operating an A/C with a crew of 5,000 and right now there are at least
> two of them there. If there was no subsidy, the oil companies would be
> paying for that and oil prices would reflect it. After all, if it can't
> be moved to a place it can be sold, it's pretty much worthless.
>
The price of extracting oil varies widely. I've read of estimates
ranging from a few dollars per barrel (Ghawar, Saudia Arabia, but since
Aramco is tight-lipped about production specifics who really knows?) to
close to $30 (Alberta tar sands) and beyond.
And excellent book on the subject is "Twilight in the Desert" by
Matthew Simmons. The author heads an investment bank specializing in
the energy sector.
I'm not equipped to comment on specific subsidies (U.S.) oil companies
receive courtesy of the American taxpayer, but history has well
documented that American foreign policy initiatives, covert and overt,
from Mossadegh to the current debacle in Iraq, have long sought to
secure oil supplies, intentionally or otherwise enriching big oil in
the process.
This is a most pernicious, inhumane form of subsidy paid in blood and
brutality. But it's a strategy yielding diminishing returns: petroleum
prices and supply lines are as volatile as ever.
> >
> > Oil is now a fungible global commodity following the laws of supply and
> > demand and subject to the vagaries of the market.
>
> Not when the speculators take over.
I reiterate: "subject to the vagaries of the market" Speculating on
commodities is a facet of the marketplace, it's not limited to oil.
You're free to participate.
>
> You didn't see that when house prices went crazy? You think that "Flip
> That House" and all of it's TV derivatives weren't really happening all
> over the US? Right now, my taxes reflect these nutty prices and what
> fools paid for "investments" that are now empty, that they can't unload
> for half of what they paid.
>
> You didn't see that with the crazy dot com fiasco? When there were
> people telling us (with a straight face) on the Today Show, that the
> reason the fundamentals "didn't work anymore" was because we had "new
> economy."
Cyclical binges of mass avarice are a great American past time. Your
due for a hangover.
> That wasn't "the market" at work. That was the Fed fiddling with the
> money supply.
>
> The fundamentals aren't working with oil either. Time to find out why.
Here is the fundamental fact: the supply of *cheap, easily extractable
oil* is diminishing; world demand is increasing. Its price will
continue to rise as long as that equation persists. Fed
intervention/policy can only mitigate the effects of this trend, it
cannot overturn it. And if the trend continues apace $100 per barrel in
a couple of years is a reasonable expectation.
<snip >
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Date: 16 Sep 2007 22:43:59
From: vey
Subject: Re: Contradictory Facts
|
Luke wrote:
>
> The price of extracting oil varies widely. I've read of estimates
> ranging from a few dollars per barrel (Ghawar, Saudia Arabia, but since
> Aramco is tight-lipped about production specifics who really knows?)
There are a lot of folks that don't even know about ARAMCO. That doesn't
stop them from having an opinion, though.
to
> close to $30 (Alberta tar sands) and beyond.
>
> And excellent book on the subject is "Twilight in the Desert" by
> Matthew Simmons. The author heads an investment bank specializing in
> the energy sector.
Not heard of it, thanks.
>
> I'm not equipped to comment on specific subsidies (U.S.) oil companies
Not just US companies benefiting. BP and RD Shell are also well
represented. The Royal Navy keeps a small, but present force down there
and it's not for nothing.
> receive courtesy of the American taxpayer, but history has well
> documented that American foreign policy initiatives,
Don't forget British initiatives
>covert and overt,
> from Mossadegh to the current debacle in Iraq, have long sought to
> secure oil supplies, intentionally or otherwise enriching big oil in
> the process.
>
> This is a most pernicious, inhumane form of subsidy paid in blood and
> brutality. But it's a strategy yielding diminishing returns: petroleum
> prices and supply lines are as volatile as ever.
>
>
> I reiterate: "subject to the vagaries of the market" Speculating on
> commodities is a facet of the marketplace, it's not limited to oil.
> You're free to participate.
And I reiterate. Things have changed. The vagaries of the market have
little to do with the "new" speculative methods. Sadly, I am not and you
are not free to participate in these new energy exchanges. I say again,
there are new, since 2002, private energy markets now in the US.
Unregulated (I am and you are too stupid to know we could lose money)
they are manipulating the entire world market since the majority of
energy use is in the US.
>
> Cyclical binges of mass avarice are a great American past time. Your
> due for a hangover.
The manipulation of the energy market, after 5 years, can't be explained
as a cyclical binge. It should have corrected by now.
>
>
> Here is the fundamental fact: the supply of *cheap, easily extractable
> oil* is diminishing; world demand is increasing. Its price will
> continue to rise as long as that equation persists. Fed
> intervention/policy can only mitigate the effects of this trend, it
> cannot overturn it. And if the trend continues apace $100 per barrel in
> a couple of years is a reasonable expectation.
Quite true, but there is a layer of excess of about 33% that has been
showing for some time. No one seems to be able to account for it. Demand
has *not* been exceeding supply, yet it has been constantly there and
doesn't seem to want to go away. Co-incidentally, it was about the time
that the private energy exchanges appeared that the extra layer
appeared. Can anyone say that one caused the other, of course not. Why?
Because there is no info available, it's private.
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Date: 18 Sep 2007 00:58:03
From: Luke
Subject: Re: Contradictory Facts
|
In article <fckpfm$fin$1@news.datemas.de >, vey <junker@ericvey.com>
wrote:
> > Here is the fundamental fact: the supply of *cheap, easily extractable
> > oil* is diminishing; world demand is increasing. Its price will
> > continue to rise as long as that equation persists. Fed
> > intervention/policy can only mitigate the effects of this trend, it
> > cannot overturn it. And if the trend continues apace $100 per barrel in
> > a couple of years is a reasonable expectation.
>
> Quite true, but there is a layer of excess of about 33% that has been
> showing for some time. No one seems to be able to account for it. Demand
> has *not* been exceeding supply, yet it has been constantly there and
> doesn't seem to want to go away. Co-incidentally, it was about the time
> that the private energy exchanges appeared that the extra layer
> appeared. Can anyone say that one caused the other, of course not. Why?
> Because there is no info available, it's private.
I don't know what this '33%' excess layer refers to. I take it to mean
the margin by which capacity exceeds demand. Is that it? If so I should
think it can be readily accounted for. Nations and enterprises whose
welfares are bound to the fortunes of the oil industry are behaving in
a predictable manner: they are bent on furthering their interests and
maximizing their profits. It is the prerogative of Russia, Venezuela,
Saudi Arabia, Exxon, BP, Private Equity, etc... to manage and
manipulate the resource so that they may extract the most value. If you
were in their position wouldn't you do the same?
That these interests engage in transactions employing ever opaque
mechanisms and exclusive associations is, again, neither new or
surprising. Robber Barons of the Gilded Age did the same; wealth at
such a rarified level seeks its own, in proceedings beyond public
scrutiny.
When I wrote 'you're free to participate' it wasn't meant to imply the
involvement would be of the same tenor as that restrictive club. I
meant as Joe Sixpack, at the bottom of the food chain, buying oil
stocks or investing in mortgage backed securities -- not a good idea
right now! ;-)
But in spite of all this, the most important determinant of the price
of oil, like any tradeable commodity, is the supply/demand
relationship.
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Date: 18 Sep 2007 20:11:21
From: vey
Subject: Re: Contradictory Facts
|
Luke wrote:
>>> Here is the fundamental fact: the supply of *cheap, easily extractable
>>> oil* is diminishing; world demand is increasing. Its price will
>>> continue to rise as long as that equation persists.
There will be a small increase, that is true. But only if demand
outstrips supply and so far, that is not happening.
Fed
>>> intervention/policy can only mitigate the effects of this trend, it
>>> cannot overturn it. And if the trend continues apace $100 per barrel in
>>> a couple of years is a reasonable expectation.
Actually, the "experts" project even more. $150 a barrel is not
unreasonable.
> I don't know what this '33%' excess layer refers to.
It refers to the current price being 33% higher than it "ought" to be
based upon supply and demand.
I take it to mean
> the margin by which capacity exceeds demand. Is that it?
Nope. It's the excess that I am talking about. I snipped out the
Economics 101 regurgitation.
> When I wrote 'you're free to participate' it wasn't meant to imply the
> involvement would be of the same tenor as that restrictive club. I
> meant as Joe Sixpack, at the bottom of the food chain, buying oil
> stocks or investing in mortgage backed securities -- not a good idea
> right now! ;-)
Joe Sixpack should have every right to participate in any market as an
investor. That is one of the hallmarks of the capital system. Rather
than just a few people controlling things, capitalism says anyone's
money is the same and they have a duty to invest in the system. I'm so
sad that the right-wingers seem to have forgotten that principal.
But unless you don't own, don't rent and pay nothing to live, you are
indirectly affected by these greedy dopes.
>
> But in spite of all this, the most important determinant of the price
> of oil, like any tradeable commodity, is the supply/demand
> relationship.
Let me introduce you to market "Speculation" and his kissin' cousin
"Manipulation." You seem very adept at quoting what you learned in
Economics 101, now it's time for Economics 401.
You may very well say that "Joe Sixpack" may, or may not participate in
the market, but that's not true. Not unless Joe and his family is
willing to take a job a mile from his tent and live without
refrigeration in a tent squatting on land he doesn't own or rent.
Perhaps one lives at home with Mommy paying all the bills. That's about
the same thing.
If Joe owns a house free-and-clear, it's likely that his property taxes
have doubled in the last 5 years. And we are talking thousands of
dollars, not hundreds. What did he do to deserve this? The increase is
due to speculation. Speculation tends to exaggerate normal swings in the
market. Now things are crashing. Not due to speculation, but speculation
made things rise higher and faster and fall faster and harder than the
regular market would cause.
Now we start talking about "Manipulation." Let's say Joe lives in a
house with a normal fixed rate mortgage of 7%. He is watching TV one
night and the advertisement says "re mortgage at 120% and pay off your
credit card bills! Yes, we will loan you more money than your house is
worth, just call this number!" We have all seen these ads and we have
seen them for years. Joe is envious of his neighbor that has a wide
screen TV and says to himself "why not?"
The problem is that the money that Joe borrows has itself been borrowed
and that money was borrowed as well. The new unregulated banks loaned it
because they don't make much money unless they collect interest. This
opens Pandora's box. No one knows exactly who loaned the money Joe got
to buy his wide-screen TV. Likely it came from overseas.
If the only losers in the game were Joe and his mortgage company, 7our
argument would have some weight, but since speculators AND manipulators
are fooling around with borrowed money, the results of their greediness
comes in on you.
Did you know that the UK just suffered the biggest bank run since the
1880's? Why do you think that is? People that had nothing to do with the
crazy lending or borrowing in the US are suddenly afraid to lose their
savings (most people outside the US save money.)
http://www.cbsnews.com/stories/2007/09/17/business/realestate/main3267575.shtml?source=RSSattr=Business_3267575
Do you think you are exempt?
So, you say to yourself, so what if house prices crash? So what if there
is a run on a bank in the UK? Who cares?
Do you have a job? Did you know that your employer relies on borrowed
money to pay you? It's true. People (like you) don't always pay their
bills on time, so how can he pay you on time? Tsk. Most businesses
borrow against their accounts receivable to stay afloat.
So you don't have a job and you work for yourself. Do you think your
customers are always so flush as to pay you on demand? And if their
customers don't pay, then what?
The UK banks loaned money to the US banks. We are all inter-related. US
banks go down, UK banks go down, Singapore banks go down, Japanese banks
go down. If you think it doesn't matter, then try (or have your employer
try) to borrow money after a few of them go down.
So we have seen what has happened to the housing market in the US. It
has shaken the foundation of economies worldwide. Do you think that the
oil market is different?
|
| | | | | | | | | | |
Date: 18 Sep 2007 20:16:34
From: A Muzi
Subject: Re: Contradictory Facts
|
> Luke wrote:
>>>> Here is the fundamental fact: the supply of *cheap, easily extractable
>>>> oil* is diminishing; world demand is increasing. Its price will
>>>> continue to rise as long as that equation persists.
vey wrote:
> There will be a small increase, that is true. But only if demand
> outstrips supply and so far, that is not happening.
>
> Fed
>>>> intervention/policy can only mitigate the effects of this trend, it
>>>> cannot overturn it. And if the trend continues apace $100 per barrel in
>>>> a couple of years is a reasonable expectation.
vey wrote:
> Actually, the "experts" project even more. $150 a barrel is not
> unreasonable.
> > I don't know what this '33%' excess layer refers to.
vey wrote:
> It refers to the current price being 33% higher than it "ought" to be
> based upon supply and demand.
> I take it to mean
>> the margin by which capacity exceeds demand. Is that it?
vey wrote:
> Nope. It's the excess that I am talking about. I snipped out the
> Economics 101 regurgitation.
>> When I wrote 'you're free to participate' it wasn't meant to imply the
>> involvement would be of the same tenor as that restrictive club. I
>> meant as Joe Sixpack, at the bottom of the food chain, buying oil
>> stocks or investing in mortgage backed securities -- not a good idea
>> right now! ;-)
vey wrote:
> Joe Sixpack should have every right to participate in any market as an
> investor. That is one of the hallmarks of the capital system. Rather
> than just a few people controlling things, capitalism says anyone's
> money is the same and they have a duty to invest in the system. I'm so
> sad that the right-wingers seem to have forgotten that principal.
> But unless you don't own, don't rent and pay nothing to live, you are
> indirectly affected by these greedy dopes.
>> But in spite of all this, the most important determinant of the price
>> of oil, like any tradeable commodity, is the supply/demand
>> relationship.
vey wrote:
> Let me introduce you to market "Speculation" and his kissin' cousin
> "Manipulation." You seem very adept at quoting what you learned in
> Economics 101, now it's time for Economics 401.
> You may very well say that "Joe Sixpack" may, or may not participate in
> the market, but that's not true. Not unless Joe and his family is
> willing to take a job a mile from his tent and live without
> refrigeration in a tent squatting on land he doesn't own or rent.
> Perhaps one lives at home with Mommy paying all the bills. That's about
> the same thing.
> If Joe owns a house free-and-clear, it's likely that his property taxes
> have doubled in the last 5 years. And we are talking thousands of
> dollars, not hundreds. What did he do to deserve this? The increase is
> due to speculation. Speculation tends to exaggerate normal swings in the
> market. Now things are crashing. Not due to speculation, but speculation
> made things rise higher and faster and fall faster and harder than the
> regular market would cause.
> Now we start talking about "Manipulation." Let's say Joe lives in a
> house with a normal fixed rate mortgage of 7%. He is watching TV one
> night and the advertisement says "re mortgage at 120% and pay off your
> credit card bills! Yes, we will loan you more money than your house is
> worth, just call this number!" We have all seen these ads and we have
> seen them for years. Joe is envious of his neighbor that has a wide
> screen TV and says to himself "why not?"
> The problem is that the money that Joe borrows has itself been borrowed
> and that money was borrowed as well. The new unregulated banks loaned it
> because they don't make much money unless they collect interest. This
> opens Pandora's box. No one knows exactly who loaned the money Joe got
> to buy his wide-screen TV. Likely it came from overseas.
> If the only losers in the game were Joe and his mortgage company, 7our
> argument would have some weight, but since speculators AND manipulators
> are fooling around with borrowed money, the results of their greediness
> comes in on you.
> Did you know that the UK just suffered the biggest bank run since the
> 1880's? Why do you think that is? People that had nothing to do with the
> crazy lending or borrowing in the US are suddenly afraid to lose their
> savings (most people outside the US save money.)
> http://www.cbsnews.com/stories/2007/09/17/business/realestate/main3267575.shtml?source=RSSattr=Business_3267575
> Do you think you are exempt?
> So, you say to yourself, so what if house prices crash? So what if there
> is a run on a bank in the UK? Who cares?
> Do you have a job? Did you know that your employer relies on borrowed
> money to pay you? It's true. People (like you) don't always pay their
> bills on time, so how can he pay you on time? Tsk. Most businesses
> borrow against their accounts receivable to stay afloat.
> So you don't have a job and you work for yourself. Do you think your
> customers are always so flush as to pay you on demand? And if their
> customers don't pay, then what?
> The UK banks loaned money to the US banks. We are all inter-related. US
> banks go down, UK banks go down, Singapore banks go down, Japanese banks
> go down. If you think it doesn't matter, then try (or have your employer
> try) to borrow money after a few of them go down.
> So we have seen what has happened to the housing market in the US. It
> has shaken the foundation of economies worldwide. Do you think that the
> oil market is different?
That something is possible doesn't mean it's prevalent or inevitable
even if popular. I know plenty of people like me who've completed a
mortgage commitment and do not finance receivables, nor in fact have any
formal debt against their businesses. My employees have always been paid
promptly every other Tuesday without fail and without exception for 37
years.
Sell your rope to another 'capitalist'!
Choices: profligate, prudent, whatever. Choices.
--
Andrew Muzi
www.yellowjersey.org
Open every day since 1 April, 1971
|
| | | | | | | | | | | |
Date: 18 Sep 2007 22:16:57
From: Luke
Subject: Re: Contradictory Facts
|
In article <13f0u227qq47701@corp.supernews.com >, A Muzi
<am@yellowjersey.org > wrote:
> Choices: profligate, prudent, whatever. Choices.
Whew! I choose to go for a bike ride....
|
| | | | | | | | | | | |
Date: 18 Sep 2007 21:59:33
From: vey
Subject: Re: Contradictory Facts
|
A Muzi wrote:
>
> Choices: profligate, prudent, whatever. Choices.
Something else I should mention is that last year my property taxes went
up $5,000 because of these speculators. The "comps" they bought with
borrowed money are sitting around me empty -- too expensive to rent and
too overpriced to sell.
That's $5,000 I have to pull out of my back pocket and exactly how do
you think I will do that? Only one way I know to do it . . . my prices
will go up.
But my price increase (multiplied by a million others in the same boat
as I am) won't have any effect on the economy as a whole, will it? I
didn't think so.
But you believe in "the market" whatever that means. Swell. People
believe in fairy tales, too.
|
| | | | | | | | | | | |
Date: 18 Sep 2007 21:37:30
From: vey
Subject: Re: Contradictory Facts
|
A Muzi wrote:
I know plenty of people like me who've completed a
> mortgage commitment and do not finance receivables, nor in fact have any
> formal debt against their businesses.
That's excellent. Good for you. A small business completely without
debt. I'm the same way. I don't have inventory and I don't want
employees. I am in the service biz.
Consider the small shop. According to your plan you don't even borrow
against inventory. Your capital is in your inventory, but is that a good
place to put it? How much interest does it earn there sitting on a shelf?
How many large or medium sized ones (over `1,000 employees) can you
point to that do things the way you do? And when the speculators crank
up your property taxes, it doesn't matter?
|
| | | | | | | | | |
Date: 18 Sep 2007 18:42:43
From: vey
Subject: Re: Contradictory Facts
|
Luke wrote:
> In article <fckpfm$fin$1@news.datemas.de>, vey <junker@ericvey.com>
> wrote:
>
>>> Here is the fundamental fact: the supply of *cheap, easily extractable
>>> oil* is diminishing; world demand is increasing. Its price will
>>> continue to rise as long as that equation persists. Fed
>>> intervention/policy can only mitigate the effects of this trend, it
>>> cannot overturn it. And if the trend continues apace $100 per barrel in
>>> a couple of years is a reasonable expectation.
>> Quite true, but there is a layer of excess of about 33% that has been
>> showing for some time. No one seems to be able to account for it. Demand
>> has *not* been exceeding supply, yet it has been constantly there and
>> doesn't seem to want to go away. Co-incidentally, it was about the time
>> that the private energy exchanges appeared that the extra layer
>> appeared. Can anyone say that one caused the other, of course not. Why?
>> Because there is no info available, it's private.
>
>
> I don't know what this '33%' excess layer refers to. I take it to mean
> the margin by which capacity exceeds demand. Is that it? If so I should
> think it can be readily accounted for. Nations and enterprises whose
> welfares are bound to the fortunes of the oil industry are behaving in
> a predictable manner: they are bent on furthering their interests and
> maximizing their profits. It is the prerogative of Russia, Venezuela,
> Saudi Arabia, Exxon, BP, Private Equity, etc... to manage and
> manipulate the resource so that they may extract the most value. If you
> were in their position wouldn't you do the same?
>
> That these interests engage in transactions employing ever opaque
> mechanisms and exclusive associations is, again, neither new or
> surprising. Robber Barons of the Gilded Age did the same; wealth at
> such a rarified level seeks its own, in proceedings beyond public
> scrutiny.
>
> When I wrote 'you're free to participate' it wasn't meant to imply the
> involvement would be of the same tenor as that restrictive club. I
> meant as Joe Sixpack, at the bottom of the food chain, buying oil
> stocks or investing in mortgage backed securities -- not a good idea
> right now! ;-)
>
> But in spite of all this, the most important determinant of the price
> of oil, like any tradeable commodity, is the supply/demand
> relationship.
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