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Senior Advisor

What is illegal speculation

We have congressmen and the president requesting justice department investigations into illegal speculation. Evidently food prices and gasoline prices are too high.

 

 thoughtt that is the way capitalism is supposed to work. Speculation is apart of capitalism is it not? Longs are betting on higher prices and shorts are betting on lower prices. Are t6here limits on commodity p-rices beyond which they cnnot go. Gs prices approaching $5 is a bit troublesome until you consider endland and europe paying much higher prices at the pum.

 

BVecause we have q history o0f cheap energy, does not mean it is written in stone  It seems to me that consumers need to suck it up and pay the price.

Npw if their is price collusion between energy companies, lets throw the rascals i9n jail. But if it is merely willing buyers and sellers coming negotiating terms, what is the complaint?

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11 Replies
Advisor

Re: What is illegal speculation

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Contributor

Re: What is illegal speculation

Looks like it will be in the ..."eye of the    E.  Holder""

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Advisor

Re: What is illegal speculation

   This is just part of Obamas 2012 campaign.   But they all know whenever there is a big rise in gas prices the economy sputters and no president or maybe party, has won reelection to the White House under such circumstances.   He's in trouble and he knows it, but the repubs may be able to snatch defeat from the jaws of victory yet.

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Re: What is illegal speculation

Fine and good.

 

And don't come whining to me when all that speculative length has to been violently liquidated,-when, not if.

 

Perhaps you will make the right decision re: your own interests, perhaps not.

 

Good luck. Let both the buyer and seller beware and God help us all.

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Senior Advisor

Re: What is illegal speculation

I thinK we've seen the previews of herky jerky spec trade. But, IF the longs are liquidated in a vIolent scene - then it's oVer. Reset. Continue.

 

By the way, if all the longs liquidate, what do they do with their money then?

 

So, can there be a violent liquidation if physical is short? Serious question. What would be the picture be?

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Senior Contributor

Re: What is illegal speculation

Palouser if all the commods tank it will take grains with it. The short corn crop will get rationed by reduced ethanol margins. At least that's how I see it.

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Senior Advisor

Re: What is illegal speculation

Funny mentals don't mean much when Panic sets in!

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Senior Advisor

Re: What is illegal speculation

I disagree. Grain is in strong hands and there is currently NO assurance that the needed grain stores will be replaced given North American demand and planting debates. Food is the one neccesity besides air and water.  Yes the specs can bail. Fine, I'll wait it out at this point and have several times this year. Spec phenoms are transitory. Where do they go after they get out if they still want returns?

 

Yes, I agree that some sort of major panic can take place - like the Wall St fiasco that resulted in the Great Recession. But let's face it, everyone's antenna are out now. We just went through a super quake and are still in a reactor emergency (by the way, that's not even over and no one's paying attention any more). In a very worst case scenario everything could go to hell still. BUT I CAN"T BUILD A MARKETING PLAN ON THAT!

 

Given the current conditions of physical grain one would be a fool to bail out now due to fear, though that isn't the same as making incremental and periodic sales according to a plan or goals. How many bailed early this year announcing that the top might fall in at any time? Fear is not a marketing plan in my book unless the fundamentals dictate it. Right now that is NOT the case. Globally there is every reason to believe prices could go a lot higher. I'm not saying they are until some of the weather trends extend. But if they do I believe there is a lot more money to be made than lost.

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Senior Contributor

Re: What is illegal speculation

I get it that fundamentals are very bullish for grains. I just can't let go of the influence of other commodities. When oil hit $130+ no one was predicting that when it fell grains woulf tank too, but they did. There is an inherent relationship especially with oil. If oil retraces to $70 there is no way ethanol plants could continue paying $7 and make a profit. Something will have to give. Maybe this time oil will not correct that far. If ethanol profitability tightens production will slow leaving more corn to be available for other users and the rationing will be sudden and complete. Or am I way off track?

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