Comments on: Oily Speculations http://cafehayek.com/2009/07/oily-speculations.html where orders emerge Mon, 16 Jan 2012 02:06:33 +0000 hourly 1 http://wordpress.org/?v= By: Anonymous http://cafehayek.com/2009/07/oily-speculations.html/comment-page-1#comment-178824 Anonymous Thu, 27 Aug 2009 20:05:00 +0000 http://70.32.86.159/2009/07/oily-speculations.html#comment-178824 This criticism seems to take Professor's Greenberger's comments out of context and is thus sorely misguided. First, the professor's assertions about passive investing was merely intended to distinguish between those who are hedging their positions in commodity markets and have an interest in the underlying assets (such as farmers do in wheat). Second, until recently, betting that oil prices would increase was a pretty sure bet (especially if you were engaging in wash sales) just as betting in real estate was a sure bet (again, until recently). The reason why "everyone and their grandmothers" don't do this is because: 1) commodities trading is fairly esoteric and typically thought to be the exclusive domain of the "professionals;" and 2) the profitability could be assured only where speculators traded in sufficient volume to drive the market, something grandma cannot do. This criticism seems to take Professor’s Greenberger’s comments out of context and is thus sorely misguided. First, the professor’s assertions about passive investing was merely intended to distinguish between those who are hedging their positions in commodity markets and have an interest in the underlying assets (such as farmers do in wheat). Second, until recently, betting that oil prices would increase was a pretty sure bet (especially if you were engaging in wash sales) just as betting in real estate was a sure bet (again, until recently). The reason why “everyone and their grandmothers” don’t do this is because: 1) commodities trading is fairly esoteric and typically thought to be the exclusive domain of the “professionals;” and 2) the profitability could be assured only where speculators traded in sufficient volume to drive the market, something grandma cannot do.

]]> By: Anonymous http://cafehayek.com/2009/07/oily-speculations.html/comment-page-1#comment-176826 Anonymous Sat, 15 Aug 2009 06:55:00 +0000 http://70.32.86.159/2009/07/oily-speculations.html#comment-176826 "They have great topics like this one on www.energytalkradio.com and donate 30% to charity! Check them out." “They have great topics like this one on http://www.energytalkradio.com and donate 30% to charity! Check them out.”

]]> By: MnM http://cafehayek.com/2009/07/oily-speculations.html/comment-page-1#comment-52830 MnM Tue, 30 Nov 1999 07:00:00 +0000 http://70.32.86.159/2009/07/oily-speculations.html#comment-52830 <blockquote>If not, why is it okay for him passively (and speculatively!) to buy, say, a few dozen shares of Microsoft "hoping to make a buck when their prices rise" but not okay for other persons to speculate in oil for the very same reason?</blockquote> <p>Great question. I wonder what his response would be. </p>

If not, why is it okay for him passively (and speculatively!) to buy, say, a few dozen shares of Microsoft "hoping to make a buck when their prices rise" but not okay for other persons to speculate in oil for the very same reason?

Great question. I wonder what his response would be.

]]> By: JohnK http://cafehayek.com/2009/07/oily-speculations.html/comment-page-1#comment-52831 JohnK Tue, 30 Nov 1999 07:00:00 +0000 http://70.32.86.159/2009/07/oily-speculations.html#comment-52831 <p>If the market consists of individual transactions, how does the commodities market make any sense?<br /> If I had an oil well in my backyard, why is the price determined not by what I and the refinery determine is a fair price, but by the commodities market?<br /> It seems to go against all free market principles.</p> If the market consists of individual transactions, how does the commodities market make any sense?
If I had an oil well in my backyard, why is the price determined not by what I and the refinery determine is a fair price, but by the commodities market?
It seems to go against all free market principles.

]]> By: vidyohs http://cafehayek.com/2009/07/oily-speculations.html/comment-page-1#comment-52832 vidyohs Tue, 30 Nov 1999 07:00:00 +0000 http://70.32.86.159/2009/07/oily-speculations.html#comment-52832 <p>JohnK,</p> <p>If you were just funning and I am walking into your trap, so be it.</p> <p>The price you negotiate with the refinery for the oil produced from the well in your backyard is an individual transaction and has no commodities market dictates contained in that deal. The commodities market prices could be used by the two of you as a guideline, advice as to worth of your oil at the current time, if you will; but, nothing prevents you from selling above or below that price, and of course nothing prevents the refinery from beating you down in price as much as they can.</p> <p>So, going into the negotiations you might be advised to check the market prices just so you know what your starting place in the negotiations is going to be.</p> JohnK,

If you were just funning and I am walking into your trap, so be it.

The price you negotiate with the refinery for the oil produced from the well in your backyard is an individual transaction and has no commodities market dictates contained in that deal. The commodities market prices could be used by the two of you as a guideline, advice as to worth of your oil at the current time, if you will; but, nothing prevents you from selling above or below that price, and of course nothing prevents the refinery from beating you down in price as much as they can.

So, going into the negotiations you might be advised to check the market prices just so you know what your starting place in the negotiations is going to be.

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