"John R. Carroll" wrote in message
...
F. George McDuffee wrote:
As the investigations grind on and on and on, the facts are
begriming to float to the surface like so many dead fish. It now
appears (with every possible spin) that 49% of the traders/trades
in crude oil over the last few months indeed were speculators or
in the terminology of the report "non-commercial market
participants."

Told ya'.


--

John R. Carroll
www.machiningsolution.com



People are speculating on oil selling short, too.
What effect do they have on the market?

=)

Jon wrote:
"John R. Carroll" wrote in
message ...
F. George McDuffee wrote:
As the investigations grind on and on and on, the facts are
begriming to float to the surface like so many dead fish. It now
appears (with every possible spin) that 49% of the traders/trades
in crude oil over the last few months indeed were speculators or
in the terminology of the report "non-commercial market
participants."

Told ya'.

People are speculating on oil selling short, too.
What effect do they have on the market?

Less.
When you short anything your largest gain is realized when whatever you
shorted goes to zero.
The sky is the limit in the other direction.
Short selling is a great hedge but a poor strategy otherwise.

The article George quoted from glosses over the big problem, which is the
source of the new money.
Futures contracts are gambles in the truest sense of the word unless you
have a genuine interest in the underlying commodity.
Banks and other mortgage lenders were prevented by law from making such bets
until recently and for good reason.

How would you feel if the article had substituted the name of the bank where
your demand deposit accounts are or maybe your mortgage is for the term
"non-commercial market participants"?

That is what they meant and it's the truth. It's also the reason Banks used
to be Banks and Investment Banks weren't allowed to cross over. That's all
changed to the point that provate equity firms effectively control
Investment Banks that control or operate as Banks. We aren't at the begining
of the end at this point. We are about a year beyond the end of the
beginning and the middle could be real ugly.

--

John R. Carroll
www.machiningsolution.com

On Fri, 15 Aug 2008 10:29:19 -0700, "John R. Carroll"
wrote:

Jon wrote:
"John R. Carroll" wrote in
message ...
F. George McDuffee wrote:
As the investigations grind on and on and on, the facts are
begriming to float to the surface like so many dead fish. It now
appears (with every possible spin) that 49% of the traders/trades
in crude oil over the last few months indeed were speculators or
in the terminology of the report "non-commercial market
participants."

Told ya'.

People are speculating on oil selling short, too.
What effect do they have on the market?

Less.
When you short anything your largest gain is realized when whatever you
shorted goes to zero.
The sky is the limit in the other direction.
Short selling is a great hedge but a poor strategy otherwise.

The article George quoted from glosses over the big problem, which is the
source of the new money.
Futures contracts are gambles in the truest sense of the word unless you
have a genuine interest in the underlying commodity.
Banks and other mortgage lenders were prevented by law from making such bets
until recently and for good reason.

How would you feel if the article had substituted the name of the bank where
your demand deposit accounts are or maybe your mortgage is for the term
"non-commercial market participants"?

That is what they meant and it's the truth. It's also the reason Banks used
to be Banks and Investment Banks weren't allowed to cross over. That's all
changed to the point that provate equity firms effectively control
Investment Banks that control or operate as Banks. We aren't at the begining
of the end at this point. We are about a year beyond the end of the
beginning and the middle could be real ugly.
===========
As usual, John appears to be exactly on target.

While the run-up in petroleum prices caused considerable economic
dislocation because of increase fuel and feed stock costs, the
real danger was behind the scenes in the [mis]allocation of
capital into nonproductive activity, with much of it borrowed.

Indeed, the steep fall in oil prices is likely to be far more
damaging than the steep rise in total economic terms. Several
very large oil futures traders went bankrupt within hours of the
announcement of CFTC clamp-down, even before it was enforced, and
these companies have considerable commercial bank loans in
addition to other debts.

The failure just one of these firms because of the central
position it had in the US midwest in domestic oil storage and
transportation, in addition to speculation in oil futures, is
causing considerable dislocation in the oil trade in Oklahoma and
Texas, in addition to flushing several billion dollars down the
tubes.

As the "dead fish" continue to float to the surface, additional
companies will be placed under overt stress because of shrinking
credit availability thus making there actual financial status
visible, and forcing other agencies to take mandated actions.
One example:
=========
(Reuters) - The U.S. government has asked bankrupt auto parts
maker Delphi Corp (DPHIQ.PK) to transfer more than $1.5 billion
of unfunded pension obligations to former parent General Motors
Corp (GM.N) by September 30, the New York Times said.

The paper, which did not specify how it obtained the
information, said failing that Delphi will have to contribute
more than $2 billion to the fund. It said if a deal was not
reached, Delphi may have to terminate its pension fund.

In a letter to GM and Delphi, the federal Pension Benefit
Guaranty Corp (PBGC) warned it would lay claim to $8 billion if
the auto maker does not keep its pension plans intact, the paper
said. This would dilute the claims of Delphi's other unsecured
creditors, who are owed about $3.5 billion.
snip
===========
[total 11.5 billion $]
To put this in perspective, the market cap [total value of all
outstanding stock] of the entire General Motors corporation is
about 6.3 billion.
http://finance.yahoo.com/q?s=gm

To see the complete article click on
http://news.yahoo.com/s/nm/20080815/... LqNWvLmyBhIF

Be reminded that GM and Chrysler [Cerberus] are joined at the hip
by their joint ownership of GMAC, and the tax payers are liable
for much of GMAC obligations through the FDIC. Didn't know that
GMAC had a FDIC insured bank? Click on
http://www.gmacbank.com/index.html?e...eyword=gm+bank


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).

F. George McDuffee wrote:
On Fri, 15 Aug 2008 10:29:19 -0700, "John R. Carroll"
wrote:

Jon wrote:
"John R. Carroll" wrote in
message ...
F. George McDuffee wrote:
As usual, John appears to be exactly on target.

In all fairness it isn't me.
It's my Peeps. They are the ones that really know wa'zzup wid'dis stuff.
LOL
The important thing isn't who you know, it's the only thing and why the game
really is rigged but without actual colusion.
Not usually anyway and because it just isn't necessary.
'Course, you knew that.


--

John R. Carroll
www.machiningsolution.com