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Honored Advisor

Re: Comms breathing in and out

Thanks BA,

Somehow I think that statement is true for most of the commodity markets including corn..

 

" the market you hear quoted is 3% of the hogs sold, so there`s a rest of the story to it."

 

How is grain any different as long as unlimited contracts can be traded without the backing of the actual commodity..

 

Wag the dog?

 

 

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Honored Advisor

Re: Comms breathing in and out

Interesting to think about betting on a long shot oil problem while the whole country in betting on a lottery 😎
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Advisor

Re: Comms breathing in and out

The Mai/Ledson fund described in The Big Short as "a garage band hedge fund" basically did just that sort of thing on the way of turning $110,000 into a $25M stake that was big enough to make another $100M on the financial crash.

 

There are risks that the market grossly underprices.  The trick, of course, is to find them and have the inevitable large number of losers amount to a lot less than the few big winners. They were clever, also lucky in rolling up the stake that put them in that position.

 

My comments were concerning the linked article's hypothetical case of $250 oil from a Saudi/Iran War blowing everything so thoroughly apart that I wouldn't bet on anything conventional retaining any value whatsoever.

 

A couple billion barrels in storage amounts to maybe 150 days of their production and the market would discount that almost immediately, in fact it probably wouldn't be available to the market as hoarding would set in.

 

 

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Veteran Advisor

Re: Comms breathing in and out

Actually there are a lot of smaller players in the Oil industry and they are feeling pinched at these prices at these prices kind a look like livestock where you've got a lot of people on the production side and then when you get to the processing like the Packers or the refiners things are a lot more concentrated and that's where the real power lies
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Advisor

Re: Comms breathing in and out

3.50$ corn is 1980 prices what was your precious oil then? It's just another political agenda to weed out the little guys. Very similar to the oil now when it gets low enough they won't stand a chance then a dozen mega corps will come in and run it all just like the farming it is a joke more like a slap in the face to the masses. Just peasants in the eye of the real people that run this country.
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Veteran Contributor

Re: Comms breathing in and out

This cheap oil is result of war being fought in the middle east but its economic war and so far a limited shooting war but we are getting closer to this every day. Saudi is flooding the market with oil to cut off finances of Iran and we are responsible for this with us becoming unreliable ally to the Saudi's, Egyptians, etc in the middle east. At same time we have left Isis in syria move oil through Turkey. Not sure why we have let this happen but in time we will see who we are paying off. This is greatest mess we have seen in over 100 years since Great Britian set up middle east back then putting powers of region against each other and where we could maniplate these powers. I think its Obama's world view of what British did especially that of Winston Churchill why he has gone down this road of undoing this in the Middle /East. We have serious political problem and if we continue to see commodities plunge like this were going to economic crisis world wide and us as extreme debtor nation will soon have financial crisis here.  This is going to be very difficult year and one that could test the US financially in many sectors in the economy.