Re: Why Did Oil Prices Drop?

Discussion in 'Computer Support' started by Whiskers, Oct 11, 2008.

  1. Whiskers

    Whiskers Guest

    On 2008-10-11, Buffalo <> wrote:
    > Anyone or everyone know?
    > I don't.
    > Sounds like the greedy got burnt and stopped speculating on oil.
    > What is the real reason??


    The speculators are guessing that the financial upset will reduce demand
    in the future, so the speculators aren't so willing to risk getting stuck
    with oil they paid more for than they can sell it for.

    --
    -- ^^^^^^^^^^
    -- Whiskers
    -- ~~~~~~~~~~
     
    Whiskers, Oct 11, 2008
    #1
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  2. Whiskers

    HEMI-Powered Guest

    Whiskers added these comments in the current discussion du jour
    ....

    >> I don't.
    >> Sounds like the greedy got burnt and stopped speculating on
    >> oil. What is the real reason??

    >
    > The speculators are guessing that the financial upset will
    > reduce demand in the future, so the speculators aren't so
    > willing to risk getting stuck with oil they paid more for than
    > they can sell it for.
    >

    I am not a proponent of the many conspiracy theories surrounding
    Big Oil but I do strongly think that the futures markets including
    the so-called speculators had to pretty much withdraw because they
    could no longer get financing at all in the current credit crunch
    and/or they were no longer willing or able to pay what it might
    cost. Either way, for a couple weeks now, the more understandable
    supply and demand curves have dictated prices.

    You are also right, I think, that the speculators that are still in
    the game are afraid of not being able to unload the oil because
    their buyers can't get credit or perhaps because they're afraid of
    what our Fed or the G7 or even the G20 might do if they get scared
    enough and reckless enough to majorly move into nationalization of
    all financial institutions as well as artificially propping up
    their currency values against other currencies they float against.
    The basic problem driving the market down so fast all week was
    people are just so damn scared to be in the market at all, but them
    savvy speculators are even more scared, as you say, to accidently
    get caught holding the bag.

    --
    HP, aka Jerry

    "Don't say 'can't' when you really mean 'won't'"
     
    HEMI-Powered, Oct 11, 2008
    #2
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  3. Whiskers

    HEMI-Powered Guest

    timotimo added these comments in the current discussion du jour
    ....

    > Obama will probably make a lot of otherwise untapped oil
    > available (use it or lose it policy). This will bring the
    > price down too.
    >
    > Assuming hes president which looks highly likely.
    >

    Obama ain't gonna be able to do a damn thing domestically any more
    than McCain will if he manages to stage an upset. These guys can
    only print so much money before it dawns on them that they simply
    cannot fund their individual pet projects, no matter which any of
    us may like or dislike.

    The use it or lose it policy is effectively in place right now if
    you consider that there are other ways to prevent oil exploration
    other than creating prohibitions in Congress, chiefly just throw up
    enough roadblocks such as the always easy environmental impact
    statements that will take far longer than the techical side of
    drilling. Why do you suppose those greedy oil companies aren't
    drilling on the 64,000,000 acres they already have leases on? 'Cuz
    they can't, and partially because much of it doesn't really have
    any oil.

    Anyting that Obama and the Ultra Left green loons may be able to
    push through on use it or lose it will tend to increase prices, not
    decrease them because the little extra oil that might be added to
    our domestic supply will continue to be constrained indefinitely.

    --
    HP, aka Jerry

    "Don't say 'can't' when you really mean 'won't'"
     
    HEMI-Powered, Oct 11, 2008
    #3
  4. Whiskers

    HEMI-Powered Guest

    philo added these comments in the current discussion du jour ...

    >
    >> Obama will probably make a lot of otherwise untapped oil
    >> available (use it or lose it policy). This will bring the
    >> price down too.
    >>
    >> Assuming hes president which looks highly likely.
    >>

    >
    >
    > Assuming Obama wins, he'll be inheriting a nice mess.
    >
    > From the debates, he seems like a well focused person.
    >
    > Though I really do respect McCain...
    > he has made a few too many "poor judgment" calls to get my
    > vote.
    >
    > That's why I posted the link (above) to Buckley's statement.
    >

    Funny story adapted from a business environment: After his
    innauguration, Obama is invited by Bush to stop by the oval and
    get a bit of advice from the outgoing president. When they get
    their, Bush says there are 3 sealed envelopes in the desk and
    Obama can just open them each time he gets into trouble.

    So, a little while goes by, Obama gets into trouble and opens the
    1st envelope. "Blame your predessor" it says, he does, and gets
    out of trouble. A little more time goes by, he gets into trouble
    again and opens the 2nd envelope, which says "blame the unions".
    He blames the Federal employees union and squeaks by again.

    Finally, he gets into trouble a 3rd time, opens the last envelope
    and reads:

    WRITE THREE LETTERS.

    Seriously, I think that a senario like that is possible if you
    wink a little. I'm sure that Once the new president, whoever it
    really is, gets on the job and actually takes a look around, he
    will quickly discover that options are severely limited on
    domestic economic issues, healthcare reform, and even the war in
    Iraq. No president inheriting a major mess has been able to do
    much until/unless he's able to get it under control.

    My take, YMMV.

    --
    HP, aka Jerry

    "Don't say 'can't' when you really mean 'won't'"
     
    HEMI-Powered, Oct 11, 2008
    #4
  5. Whiskers

    HEMI-Powered Guest

    philo added these comments in the current discussion du jour ...

    > It's true...
    > a "leader" only has so much he/she can actually control.


    No matter what it may have sounded like, I wasn't making an oblique
    attack on Sen. Obama. The same story could apply to McCain or any
    new president. There really is some OJT that comes with the
    territory.

    But, in this particular election, circumstances starting just a
    month ago have entirely changed the complexion of what either Obama
    or McCain's true flexibilty may really be. We know that each would
    approach the job vastly differently but both would be equally
    constrained by the fiscal realities I've outlined.
    >
    > I do work, from time to time...for a guy who founded one of
    > the largest chemical company in the US...
    > after 40 years he was kicked off the board of directors.
    >
    > A common story!
    >

    Sometimes there's justice, and sometimes there isn't. Prevailing
    wisdom right now of an almost 100% sampling of the American people
    that are majorly pissed off that their government would even
    attempt to spend so much of their tax dollars on helping greedy
    executives knocking down tens of millions of dollars in
    compensation even as they're allowing their companies to flounder,
    untold number of elected politicians from both parties that somehow
    forgot who their bosses really are, and the terminally stupids,
    numbering well in excess of 5 million who knowingly or unknowingly
    signed up for loans that wouldn't even pass the laugh test for
    reasonableness.

    I think the American people want to see all the real guilty people
    punished whether it be Big Oil, Big Finance, Big Wall Street or
    even Big Government. And, I think that people who work hard and
    manage to pay their bills on time cannot even comprehend what I
    think is a true cost of the bailout that may be in excess of $7
    trilion. That number is so huges that few people can even cite
    examples of how many things they normal consume could be bought
    with that much.

    --
    HP, aka Jerry

    "Don't say 'can't' when you really mean 'won't'"
     
    HEMI-Powered, Oct 12, 2008
    #5
  6. Whiskers

    HEMI-Powered Guest

    philo added these comments in the current discussion du jour ...

    > Yep I am certainly among the 90% of Americans who are pissed
    > off.


    Me, too. Count me among the vast majority who don't want the pols
    to piss away my hard earned tax dollars to anyone, not just the
    greedy CEOs.

    > The thing that irks me the most is that Bush does to have the
    > guts to apologize.
    >

    There are lots of things we can say about the Bush economic
    policies of the last 7+ years including the profligate waste in
    spending for the war in Iraq that was never justified, but for
    the record, his Administration did try in 2003, 2004, 2005, and
    2006 to get legislation enacted to rein in the Fannies and
    Freddies. However, even when the Red Team held the majority in
    both houses, the Blue Team was still able to block an up or down
    floor vote. That is deplorable at best. At worst, our friends
    such as Barney Frank, Chris Dodd and Charles Schumer may have had
    good hearts by trying to extend the American Dream of home
    ownership, but they also raked in hundreds of thousands in
    campaign contributions over the last decade. Interesting, the
    agent of change from Illinois has been in the Senate less than 4
    years, 3/4 of which he's been running for president, yet he is a
    close 2nd to Dodd in Fannie/Freddie graft.

    > He and his team simply point back to the Clinton years and say
    > it's all due to
    > the previous administration's actions. Not only is that 100%
    > "bull"... but even if it were true, then it's still the
    > present administration's fault for not doing something about
    > it.


    The source is the Clinton Administration when the notion of cheap
    loans to poor people to enable them to buy houses. However,
    Bush's house isn't too clean, but most of the problem has been
    recent. Henry Paulson's predessor as Treasury Sec., John Snow,
    sound the alarm bells in 2004 as did the previous Fed chairman
    Alan Greenspan, both testifying before a Republican led Congress
    that year. But, tragically for the American taxpapers, nothing
    happened.

    > Anyway, my complaining does me no good. The economy will
    > *always* go in cycles...
    > and I have just been carrying on as normal.
    >

    Less than 19% of Americans believe that government can fix any
    given problem but between 53% and 70%, depending the poll and
    it's subject, say that government IS the problem. There have been
    credit crisis-driven economic declines 5 times prior to today
    since the Great Depression yet nobody seems to understand ...

    "Those who cannot remember the past are condemned to repeat it."
    oft mis-quoted as "Those who refuse to heed the lessons of
    history are doomed to repeat them." and also oft misquoted as "He
    who fails to heed history is forced to relive it." - George
    Santayana, Philosopher

    --
    HP, aka Jerry

    "Efficiency is doing things right, effectiveness is doing the
    right things" - Peter Drucker
     
    HEMI-Powered, Oct 12, 2008
    #6
  7. Whiskers

    HEMI-Powered Guest

    philo added these comments in the current discussion du jour ...

    > Well,
    > as they say:
    >
    > The road to hell is paved by those who have had good
    > intentions.
    >
    > And I guess I can add:
    >
    > Those who have had bad intentions are driving on that road!
    >

    philo, please don't misinterpret my comments as ANY defense of
    them who are so obviously guilty. The pols have no direct
    criminal guilt yet associated with their actions or inactions,
    but rather they are guilty of letting their own good intentions -
    that of expanding cheap housing - get compromised by accepting
    campaign contributions to the point where they forgot or
    intentionally ignored their oversight responsibilities.

    I'll ignore the speculators because I think theirs is the
    smallest likelihood of criminal guilt.

    Which leaves us with the top execes, especially the CEOs, of
    Fannie and Freddie, Bear Stearns, Merrill-Lynch, Lehman Brothers,
    AIG and many others just now coming to light. In all these cases,
    something disfunctional happened to the executive compensation
    systems.

    For background, most publicly owned companies have strict rules
    in their corporate charters that presumably only allow paying of
    bonuses and stock options when there are profits, and usually
    only when profits exceed a threshold amount.

    However, in cases just now coming to light, CEOs conveniently and
    successfully petitioned their board to alter the formula on the
    pretext that SEC required mark-to-market accounting practices
    which forced financial institutions to account for the actual
    market value of their loans rather than the face amount. CEOs
    contended that these believed paper losses were so severe that
    their claimed outstanding management should be rewarded even
    though investor share prices were dropping, leveraging was going
    up, defaults on loans were rising, and yes, there is now evidence
    of intentional or just plain stupid cooking of the books.

    If this isn't bad enough to make you want to pummel these guys on
    the street, they then realized that their own end was near and
    arranged for truly outrageous golden parachutes when they bailed
    ahead of the sheriff coming to get them.

    Now so jokingly, my recommendation to the Federal wonks giving
    away my tax money to save these companies from the excesses of
    the clowns who ran them into the ground would be to pack them off
    to Gitmo and not let them return until they agree to return to
    the taxpapers their entire compensation plus interest and
    criminal penalties during the periods in question, likely going
    back to at least 2004 but maybe even into the 1990s.

    Am I pissed? Ya think?

    --
    HP, aka Jerry

    "Efficiency is doing things right, effectiveness is doing the
    right things" - Peter Drucker
     
    HEMI-Powered, Oct 12, 2008
    #7
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