What is Digg?169 Comments
- staden121, on 06/11/2008, -1/+31A solution to keep motorists happy is to install porn monitors at each pump. That way you can watch other people getting f#$%ed at the same time you are.
- phydeaux70, on 06/11/2008, -0/+25An article on Digg that gives more than one side of the story? What is going here???
- rrife, on 06/11/2008, -6/+19You need "speculators" since they're what drives the future markets, which allows companies like Southwest to provide services at dirt cheap prices. They also provide a "buffer" that prevent prices from fluctuating constantly.
- skidooer, on 06/11/2008, -1/+13"Unlike housing speculation, commodities futures do exactly nothing to influence the current price of a commodity."
As a farmer I can tell you that's not exactly true. If I see the future prices are going through the roof, I'll hold off selling my crop because the current market price usually follows suit. - zadadka, on 06/11/2008, -6/+17Same old story...bad commodities brokering, invariably exacerbated by short-sighted spot-buying and hanging on too late for the extra few cents which don't then materialise as the bottom falls out from under you.
Stock-brokers will be the first against the wall when the revolution comes. - ericthegreat, on 06/11/2008, -0/+8Excellent description on what's been happening recently.
- FairDinkumMate, on 06/11/2008, -1/+9History shows that as long as the US has cheap oil, it WILL NOT fund or pursue alternatives(or even better fuel efficiency). Almost every other developed nation improved the efficiency of their vehicle fleets significantly after the 70's oil shock - except the US. Why? The other nations didn't want to be held hostage by OPEC again & so taxed oil to encourage less consumption. Nobody in US politics had the balls or foresight to do the same & you're now in trouble because of it. The worst thing that could happen to the long term prospects of the US economy is for oil to drop significantly again because it would remove any incentive to improve your efficiency.
And ANWR has at MAXIMUM estimates 300,000 barrels per day production. So even it came online tomorrow it would add 0.3% to the global supply. That is a virtually irrelevant amount & would have NO impact on prices. - NoCt1, on 06/11/2008, -1/+8as someone in the energy field specifically oil trading.. speculators do impact the price. i can see the price jump a dollar instantly as soon as someone says oh this just happened.. or when someone is saying that they can see the price reach this level.. it goes up...
- inactive, on 06/11/2008, -0/+7"Revolution"? Is that a new Nintendo system? Because harsh comments on Digg are about as revolutionary as most of today's "activists" get.
- sdsurf, on 06/11/2008, -4/+11How about drilling our own damned oil? There are well over 30 years worth of oil here in the US, which is far more than enough time to allow us to pursue alternative energy sources. ANWR, Florida, the Dakotas... billions and billions of barrels of recoverable oil, and the "environmentalists" won't allow us to drill - all while Castro is allowing the Chinese to drill almost literally in sight form our shores off of Key West with angular drilling rigs that are recovering oil that is beneath our sovereign territory. Drill here and solve the problem.
- nodong, on 06/11/2008, -5/+12Diggers don't know ***** about economics or finance. They jump on any bandwagon that allows them to feel self-righteous. Unlike housing speculation, commodities futures do exactly nothing to influence the current price of a commodity.
- MISking, on 06/11/2008, -6/+13They're right that regulation needs to happen so the speculators don't get out of control.
- sump22, on 06/11/2008, -14/+20Thumbs up if you think they need to take Oil futures trading off the market. Speculation has no business being a deciding factor in what we pay for oil. It provides no 'buffer' and the futures market isn't entirely necessary.
- spinchange, on 06/11/2008, -0/+6It's not that the futures markets aren't necessary - It's that they've been "modernized" with almost ZERO oversight, transparency, or regulation. The law allowing it was literally written by the Enron lobbyists.
http://en.wikipedia.org/wiki/Commodity_Futures_Mod ...
There are commercial buyers and even "speculators" who provide liquidity and have legitimate need for foward contracts on commodities. The futures markets predates the parabolic spike in price and commodities as an "asset class" - that is a new phenomena.
http://hsgac.senate.gov/public/_files/052008Master ... - iamnotcreative, on 06/11/2008, -0/+6Because drilling our own damned oil will have the effect of lowering the price per barrel a whole 75 cents, and won't be available for 10 years.
http://www.mcclatchydc.com/251/story/38223.html
and even if we were able to immediatly gain the benefits of drilling here that still doesn't solve anything, it just delays it for 30 or 40 years. Which means that it would take 20 or 30 years for short sighted people to start thinking about renewable energy source.
Oil is not the long term answer for our energy needs as a species; it was a cheap and easy way to build our industrial base but at the same time we should have realized that someday the party would end and something would have to be available to take its place. If renewables had been getting the same attention 30 years ago as they are today we would be in a much better position for when the inevitable happened. Instead policy was set by people such as yourself who cannot envision the human race continuing without oil. - spinchange, on 06/11/2008, -0/+5>>"Diggers don't know ***** about economics or finance. They jump on any bandwagon that allows them to feel self-righteous"
so what do you know, and what is it that you're doing?
>>"commodities futures do exactly nothing to influence the current price of a commodity."
speaking of not knowing *****... - drmangrum, on 06/11/2008, -0/+5You sure about that?
Africa
* Angola (January 1, 2007)
* Libya (December 1962)
* Nigeria (July 1971)
* Algeria (1969)
Middle East
* Iran (September 1960)
* Iraq (September 1960) (Excluded from OPEC production quotas since 1998)
* Kuwait (September, 1960)
* Qatar (December 1961)
* Saudi Arabia (September 1960)
* United Arab Emirates (November 1967)
South America
* Ecuador (1973–1993, since 2007)[21]
* Venezuela (September 1960)
Former members
* Gabon (full member from 1975 to 1995)
* Indonesia ( member from December 1962 - December 2008 )
Prospective members
* Bolivia, Sudan and Syria have been invited by OPEC to join.
* Brazil is currently pondering membership due to a sizable oil find in the Atlantic.[23] - Winston84, on 06/11/2008, -11/+16Buried for using the word "theorists" ..
- drmangrum, on 06/11/2008, -1/+5Fine you want an explanation?
In June of 2002 the price of oil was $22.16/barrel Today it's roughly $135.00 give or take a few bucks depending on which insect farted in the middle east. Some quick math, the price per barrel has jumped over 600% in the last 6 years. Do you honestly believe the dollar has inflated 100% per year?
Now lets look at the yearly average of the price of oil, we'll start in '95:
95: $16
96: $20
97: $18
98: $11 -- Saudi Arabia, Venezuela and Mexico. dumped lots of oil on the market to drive the price down to try and force American suppliers out of business.
99: $16
00: $27
01: $23
02: $22
03: $27
04: $37
05: $50
06: $58
07: $64
08: $116 -- so far
The dollar did not inflate 35% between 03 and 04. The dollar did not inflate 35% between 04 and 05. The dollar certainly didnt inflate 81% between 07 and 08. - synarchy, on 06/11/2008, -0/+4Let's see. Fed decides for the first time in its history to make loans to financial firms that engage in investment banking and hedge fund deals. That's because, says the fed, those firms overexposure (over leveraging) to now worthless mortgage paper, and if "we" allow them to fail, they could take down the entire financial system. Of course, the loans only go so far, the investment banks need to make money to refill their coffers (so they can pay back the loans). Hrmm, what's an easy way to make a whole bunch of money quickly (provided you have an easy source of seed cash)?
How about this?
"Now the billions of dollars they're getting from the Fed is being diverted into commodities which is destabilizing the world economy; driving gas prices to the moon and triggering food riots across the planet. ... A conservative calculation is that at least 60% of today’s $128 per barrel price of crude oil comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York NYMEX futures exchanges and uncontrolled inter-bank or Over-The-Counter trading to avoid scrutiny. US margin rules of the government’s Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex, by having to pay only 6% of the value of the contract. At today's price of $128 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120. This extreme “leverage” of 16 to 1 helps drive prices to wildly unrealistic levels and offset bank losses in sub-prime and other disasters at the expense of the overall population.”
http://www.informationclearinghouse.info/article20 ...
Nothing to see here, just move along now. - peteophile44, on 06/11/2008, -2/+6Are you saying the Chinese are drinking our milkshake?
- inactive, on 06/11/2008, -1/+5"Conspiracy theorist"??
An article from the BBC a few weeks ago said that as much as 60% of oil prices are speculation. - bombula, on 06/11/2008, -2/+6Not the worst article out there, but still pretty stupid holes in the arguments. Short-term speculation drives short-term volatility. That's the stuff about traders shorting, etc. Long-term speculation also drives prices, but in a much larger, trend-based way - how people invest in bonds, US currency, is still based on speculation, and that drives the price up when the dollar is losing value to inflation. Supply and demand are secondary AND they are far from transparent and efficient.
For example, the article says production is 86.6 mbpd but demand is 86.8 mbpd. That's retarded. Saudi Arabia (I've worked there) could boost production overnight by more than 1 mbpd - and 8-10 mbpd in a matter of weeks ... if it wanted to. They are nowhere NEAR full production right now. They are gaming the system completely, restricting supply to drive price up, and ***** the US and everyone else in the process. There goes all your S&D analysis straight to ***** right there. - ghuytro, on 06/11/2008, -1/+5In a nutshell, here is the salient part of the article describing how speculators are affecting prices:
"Reacting to news that Asian countries were beginning to cut their energy subsidies, traders assumed that prices were set to drop. So they started unloading their "long" oil positions -- their bets that prices would rise -- and piling up "short" positions. By selling high and committing to buy low, they planned to make a killing.
But they bet wrong -- worries about the dollar and tough talk on Iran from Israel pushed the price up, putting the short-sellers in a bind. The longer they let their bets ride, the more they stood to lose, but by giving in and covering the bets, they created even more short-term demand, pushing the price even higher. "
So last Friday, gas prices where CDN$1.28/L (US$1.25) at my local gas stations around 6pm. The price of oil spiked some $11 on Friday and on Saturday, gas prices spiked to CDN$1.35/L (US$1.32).
I find it absolutely appalling that consumers are made to suffer the consequences of speculators. Moreover, contrary to what one would have expected to have happened - eg. the price of oil dropping due to expectations of weakening demand in Asia - prices instead ROSE and rose dramatically.
This speculation is resulting in a direct and escalating transfer of income and wealth from consumers and into the hands of oil companies. People aren't putting it into savings or non-gasoline consumption. Transportation costs go up which then has the double whammy of hitting consumer's pocket books again in the cost of higher food prices.
How much longer can this be allowed to go on??? - drmangrum, on 06/11/2008, -0/+3I hope the lot of them end up on the street living in a cardboard box over a steam grate. I'm all for making a buck, but these guys are just greedy. Their greed has tainted the market to an extent that harms millions and will take a decade ( at least ) to repair. Success must be tempered with long-term wisdom, seems they've forgotten the lessons of the past.
- cyberdork, on 06/11/2008, -2/+5Yeah sure. Just that ANWR oil reserves are relatively small. Check the numbers, you will be surprised.
- Lobstah, on 06/11/2008, -0/+3No mention of the weakening dollar having a big impact? Other than that, it's a decent article
- UberNick, on 06/11/2008, -1/+4"They also provide a 'buffer' that prevent prices from fluctuating constantly"
Are you claiming this is the case with our current situation? Do you think fluctuations would be more or less drastic without the speculators? - investr, on 06/11/2008, -2/+5Considering OIL is basically a National Security Issue, we really shouldn't be trading away our security for capitalist profit. I wonder why the Post Office has never been moved private? Hmm.
Besides, even with India and China's increase in higher consumption, it still cannot justify the rate of increase over the same period of time. Complete BS.
Euro/Iraq/Oil trading and debt. - inactive, on 06/11/2008, -0/+3In a true supply and demand scenario, this works. If you build pencils, and yours cost twice as much as the competition but with the same quality, you won't sell many. If you match the "going rate" which is what the market is willing to pay, you'll sell more. If you sell them cheaper, you sell even more. Eventually you hit a plateau where you supply as much as the market wants to buy.
Add speculators to the mix and all of a sudden things go pear-shaped. You get Analyst Jim saying that environmentalists are protecting Amazon rainforests, so pencil wood is getting scarce. That artificially inflates demand because the companies buying the pencils want to lock them in at a cheaper price now. As demand rises, price rises as the pencil companies are unable to keep up with demand. Even if that demand is only on paper, as Analyst Jim and Analyst Bill begin trading in pencil futures on the NYMEX.
Now when you try to step back and rationally analyze the market itself, you get a distorted view thanks to futures, speculations, hedge funds, investment banks, and all the others that never intend to take delivery of the commodity being traded.
These are the core issues here. - WolfGTZ, on 06/11/2008, -2/+5It is sad to drive by and see that the price dropped 10 cents and get excited. It's like getting excited about the fact that the guy trying to rape you is wearing a condom. Something had better happen soon....
- datastorageguy, on 06/11/2008, -4/+7The price of gas has nearly doubled since the Democrats retained control of congress. What have the Democrats done to decrease our foreign dependency on oil and reduce energy costs?
Those bad, awful people at the big oil companies make a 4% profit on Oil sales while the government reaps over 10% in taxes. - JosephStalin, on 06/11/2008, -0/+3ANWR itself is not the answer. However, we need to drill everywhere we can possibly get oil. ANWR, Florida (which Cuba, China, and India are going after now), California, etc. Get the shale oil in the western states (which, is estimated to contain three times as much oil as Saudi Arabia), turn coal into oil (which we have a massive supply of), etc.
We need *our own* damn oil. Getting off of foreign energy needs to be a top priority. - wynja, on 06/11/2008, -0/+3No, speculation is not part of the supply and demand structure. It creates windfall profits that are absorbed by third parties that provide zero utility to the supply or distribution chain.
- zadadka, on 06/11/2008, -0/+3lol
I'll just go check in Second Life :) - datastorageguy, on 06/11/2008, -0/+3Whooahhhh mannnnnn....don't get so heavvyyy with the logic and facts about market forces. This crowd can't handle that.
- wynja, on 06/11/2008, -0/+3What are you talking about? Now that the price of a barrel is up. US production has sky rocketed as old pumps are turned back on.
- SilverBlade2k, on 06/11/2008, -0/+2Lets eliminate the whole 'Futures' aspect of oil trading. Trade only by what is happening *today* and not *in 3 years*
- Rekutyn, on 06/11/2008, -0/+2Thank you!
- Donwangugi, on 06/11/2008, -0/+2But thats not speculation is it? Thats supply and demand, right? As more and more of the corn crop is dedicated to Ethanol production there is less corn dedicated for eating purposes?
Oh wait, thats right, no. - BruiserBob, on 06/11/2008, -0/+2You fail - http://news.yahoo.com/s/ap/20080602/ap_on_re_us/ne ...
- Donwangugi, on 06/11/2008, -0/+2I do not know how much is in Florida. But I do know that to some estimates the oil reserves in ANWR and Dakota would last us, according to current consumption rates. 3 years.
What about oil shale? If we could figure out a way to change that kerogen to oil then we would have the largest oil reserves on the planet, by far. - wynja, on 06/11/2008, -0/+2Yeah, where did you get this notion that it's illegal to tap new wells or make a new refinery? Neither are true. In fact, a new refinery is being built in SD as we speak. Oh, and if you own the mineral rights to land, then guess what you can drill a well and pump out anything you happen to find beneath it. You are thinking about ANWR, and it is a totally different story as ANWR is a federally protected habitat. You know how you can't just go cut down a tree in a national park. Yeah, ANWR is just like that.
- inactive, on 06/11/2008, -0/+2I don't blame OPEC anyway. Why the hell do they need to pump more oil when nobody will buy the excess except futures traders? They're supplying what the market needs.
- darienphoenix, on 06/11/2008, -0/+2Let me guess, AIRPLANE FUEL DONT MELT HOT ENOUGH TO MELT STEEL!1!, right?
- synarchy, on 06/11/2008, -0/+2Go rent and then watch "Syriana".
- inactive, on 06/11/2008, -0/+2The price of oil comes down when demand decreases...They can speculate all day but if demand is not there there is nothing to speculate about..We have to stop being pigs..
- bagelmaster, on 06/11/2008, -0/+2Yes. I'm sure the Saudis are looking out for America's best interests.
/sarcasm - digghasnoethics, on 06/11/2008, -1/+3For the conspiracy theorists out there, the question remains - if $10-15 is the size of the speculator effect (from the obvious evidence), what's your excuse for the other $60 above what you consider to be the 'true' cost?
- lebrad, on 06/11/2008, -1/+3So we should kill foreigners for their oil? I think we're already trying that and it hasn't been going well.
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