

Oily Speculations - culley
http://www.newyorker.com/talk/financial/2008/07/07/080707ta_talk_surowiecki/

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te_platt
What really stuck out to me was how pleasant it was to read a news story about
oil that wasn't alarmist. I kept waiting for the "Burn the witches!" segment
that never came.

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Tichy
Wouldn't speculators "punish" themselves if their price expectations were
unwarranted (= big losses for speculators)? What logic could lead to laws to
curb speculation?

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kingkongrevenge
Yes. Futures speculation is a zero sum game. There's a loser for every winner,
so blaming speculators for price movements in the spot market is absurd. What
about the speculators who have lost? Spot prices are well above the delivery
price of most maturing futures contracts.

If politicians want to pillory traders and suppliers the charge should be
keeping prices too low in prior years and being foolishly shortsighted. The
price should have risen much higher much sooner to encourage conservation and
inventory. Current market conditions should have been more broadly foreseen
and the increase should have been more gradual and sooner. Current prices are
clearly justified by supply and demand, future expectations thereof, monetary
policy, and geopolitical concerns.

