View Poll Results: The price of gas under President McCain would have been

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  • $1.86

    2 3.92%
  • $2.00

    0 0%
  • $2.50

    0 0%
  • $3.00

    2 3.92%
  • About the same

    47 92.16%
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Thread: If McCain had won in '08, gas would cost...?

  1. #61
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    Re: If McCain had won in '08, gas would cost...?

    Quote Originally Posted by Tucker Case View Post
    It's not illegal to do what they do, but it is predatory.
    Not at all Tuck. All they are doing is holding stocks of product for the percieved monetary value and what they think will be the optimum price point. They are essentially playing the same economic side of petroleum that retailers play with stock, except the stakes are higher and the risks are far greater.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

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    Re: If McCain had won in '08, gas would cost...?

    Quote Originally Posted by LaMidRighter View Post
    Not at all Tuck. All they are doing is holding stocks of product for the percieved monetary value and what they think will be the optimum price point. They are essentially playing the same economic side of petroleum that retailers play with stock, except the stakes are higher and the risks are far greater.
    That doesn't contradict my point since the same methods are used to drive up prices are used in both markets all the time. The reason oOil speculation is predatory while stock speculation isn't is because the people who fund the profits of those speculators aren't other investors (which is the case with the stock market) but everyone else.

    If you profit from stocks, you do so because other investors made bad moves. every time. If you lose money in the stock market, some other investor profits from it and vice versa.

    If you profit in commodities trading, you do so because people who require that commodity in order to use it have no other choice but to pay you for it. If you lose money in commodities trading, though, some other investor profits from your mistake. The people who end up paying for the profits on one side of the equation gain nothing on the other. They simply do not lose.

    Comer to think of it, perhaps parasitic investing is a better name for it.
    Tucker Case - Tard magnet.

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    Re: If McCain had won in '08, gas would cost...?

    Quote Originally Posted by Tucker Case View Post
    That doesn't contradict my point since the same methods are used to drive up prices are used in both markets all the time. The reason oOil speculation is predatory while stock speculation isn't is because the people who fund the profits of those speculators aren't other investors (which is the case with the stock market) but everyone else.

    If you profit from stocks, you do so because other investors made bad moves. every time. If you lose money in the stock market, some other investor profits from it and vice versa.

    If you profit in commodities trading, you do so because people who require that commodity in order to use it have no other choice but to pay you for it. If you lose money in commodities trading, though, some other investor profits from your mistake. The people who end up paying for the profits on one side of the equation gain nothing on the other. They simply do not lose.

    Comer to think of it, perhaps parasitic investing is a better name for it.
    I just can't agree here Tuck. Commodities brokering is in fact a different animal than stocks, that's the truth and I do agree there. I can make the same exact long/short argument for other consumables such as corn, wheat, other food stuffs, textiles, etc. the consumer "must" buy in these markets as well and likewise there are people betting on shortages and surpluses, yet no one considers these predatory. Oil is a commodity and like anything else it's supply has ebbs and flows.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

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    Re: If McCain had won in '08, gas would cost...?

    Quote Originally Posted by LaMidRighter View Post
    I just can't agree here Tuck. Commodities brokering is in fact a different animal than stocks, that's the truth and I do agree there. I can make the same exact long/short argument for other consumables such as corn, wheat, other food stuffs, textiles, etc. the consumer "must" buy in these markets as well and likewise there are people betting on shortages and surpluses, yet no one considers these predatory. Oil is a commodity and like anything else it's supply has ebbs and flows.
    The part in bold is where you are wrong. I consider that kind of thing just as parasitic.
    Tucker Case - Tard magnet.

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    Re: If McCain had won in '08, gas would cost...?

    Quote Originally Posted by Tucker Case View Post
    The part in bold is where you are wrong. I consider that kind of thing just as parasitic.
    Well okay, you've got me there Tuck. I guess I should have said I've never heard of it referred to as predatory before. LOL.

    Here's my point, if you want materials, goods, and services to move someone has to do it, money is required across the supply chain and it comes from either reserves, loans, or investment. All speculators are doing is investing in the goods, materials side of the supply chain and without them I would actually argue prices would be worse because to either pay back loans or make up reserves the margins on products would have to increase. With investors literally risking money the only responsibility becomes returning their principle. To get crude to market someone has to move it, speculators are simply betting on what it's value and quantity will forecast out, in reality it's kind of like betting over/under on a sporting even.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

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    Re: If McCain had won in '08, gas would cost...?

    Quote Originally Posted by LaMidRighter View Post
    Here's my point, if you want materials, goods, and services to move someone has to do it, money is required across the supply chain and it comes from either reserves, loans, or investment.
    Speculation really has little effect on those aspects, though, since many, if not most investment sales are from one investor to the other rather than being from the producer to the investor. Nor do investors actually pay for shipping. It's almost a separate issue entirely.

    The system is designed so that ultimately, rich investors win, everyone else loses.


    I would actually argue prices would be worse because to either pay back loans or make up reserves the margins on products would have to increase.

    Why would you argue that? The vast majority of businesses use the model you describe above without having any major increases in price because of it (except when investors perform tehir predatory actions with regard to fuel, that is).

    Why would it be dramatically different for commodities?
    Tucker Case - Tard magnet.

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    Re: If McCain had won in '08, gas would cost...?

    Quote Originally Posted by Tucker Case View Post
    Speculation really has little effect on those aspects, though, since many, if not most investment sales are from one investor to the other rather than being from the producer to the investor. Nor do investors actually pay for shipping. It's almost a separate issue entirely.

    The system is designed so that ultimately, rich investors win, everyone else loses.
    Think about this though. While the money is investor to investor the money is still moving around and this is encouraging a continued influx of money into the market, these guys are moving product which is being traded with the intent of getting it to the market. Sure we could say "just sell it to the refinery" but it's not even close to that simple. The exploration company must move it, and like every other commodity they have the best tools to get the product but not necessarily distribute it, therefore a middleman with the means to get the raw materials out becomes necessary. When these middle men don't have enough product the value increases, too much and their bottom line suffers due to a surplus changing the value per unit down. Speculators are just a money injection into the situation, they make their money by guessing correctly. This is why I say they are more indicator than factor.





    Why would you argue that? The vast majority of businesses use the model you describe above without having any major increases in price because of it (except when investors perform tehir predatory actions with regard to fuel, that is).

    Why would it be dramatically different for commodities?
    This is why I stated that commodities are a different animal. They are dependent heavily on supply and distribution, moreso than a retailer, manufacturer. If you take a loan on projections of having say...... 1,000 units production per 980 units demanded you are doing well, making a return on the initial production, paying back the loan with interest, and you have reserves available for resale all leading to profit. But if anything causes a hiccup in production and say you can't fullfill that projection then you would be running at a loss meaning you must pay the debtor and production employees and hope you can make a minimal return at cost which is fine. Under investments the individual understands that they are taking the risk and may never realize a return, the responsibility is to make that return happen but it allows a little more flexibility in pricing. You wouldn't have to shock the market with a price increase and risk the demand side based on supply while still taking in cash. Food commodities especially exemplify this when you consider that a hard freeze can wipe out a crop, oil would be next as a well could not pan out or go dry before the projected return is satisfied. Hard metals not so much, we pretty much know what is out there and what can be projected, they are more dependent on the demand side.

    On the distribution and retail side the quantity to be shipped and available is pretty well known, it can be accounted for and planned for. Which is why the business models are completely incompatible.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

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    Re: If McCain had won in '08, gas would cost...?

    Quote Originally Posted by LaMidRighter View Post
    This is why I stated that commodities are a different animal. They are dependent heavily on supply and distribution, moreso than a retailer, manufacturer. If you take a loan on projections of having say...... 1,000 units production per 980 units demanded you are doing well, making a return on the initial production, paying back the loan with interest, and you have reserves available for resale all leading to profit. But if anything causes a hiccup in production and say you can't fullfill that projection then you would be running at a loss meaning you must pay the debtor and production employees and hope you can make a minimal return at cost which is fine. Under investments the individual understands that they are taking the risk and may never realize a return, the responsibility is to make that return happen but it allows a little more flexibility in pricing. You wouldn't have to shock the market with a price increase and risk the demand side based on supply while still taking in cash. Food commodities especially exemplify this when you consider that a hard freeze can wipe out a crop, oil would be next as a well could not pan out or go dry before the projected return is satisfied. Hard metals not so much, we pretty much know what is out there and what can be projected, they are more dependent on the demand side.

    On the distribution and retail side the quantity to be shipped and available is pretty well known, it can be accounted for and planned for. Which is why the business models are completely incompatible.

    But that's just it, though. Supply and distribution and demand for using the commodity do not account for the high prices right now. It's because of the artificial demand created by the investors.

    It works the same way that the mortgage mess worked. Values get grossly inflated entirely due to the demand caused investors applying a short-term, profit-right-now investment mentality on an investment that requires a long term mentality. This creates a bubble. It's happened before with Oil (2008 was caused by an oil bubble and it popped, which is what caused prices to crash back down). It'll pop again because the reality of the situation doesn't dictate these prices. The futures look high because of the speculation, not because of supply and demand issue.

    Since it's a commodity, though, it's possible to invest in such a way that even if you are one of the last buyers before the pop, it only affects the insane profits you've enjoyed throughout the buildup process and doesn't actually cause you to lose. The only people who lose in the mix are people who pay these investors for the honor of getting ****ed by their investments (i.e. the people who buy gas at $4 + per gallon).

    The system as it exists only benefits the parasitic investors in the end because over the long haul, the suppliers break even on the bargain (they still have to supply and distribute after the bubble bursts so when it all averages out, they would end up in the exact same place if the parasitic investment practices weren't employed, while most of the money changing hands on the investment market doesn't even involve them).
    Tucker Case - Tard magnet.

  9. #69
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    Re: If McCain had won in '08, gas would cost...?

    Quote Originally Posted by Tucker Case View Post
    But that's just it, though. Supply and distribution and demand for using the commodity do not account for the high prices right now. It's because of the artificial demand created by the investors.
    Not so fast Tuck. Every part of the chain is kinked up right now, drilling is indeed up in some areas but down in others, refining is the biggest problem because we are in a facility shrinkage currently which means that it's harder to keep up with peak demand at the pump, as well the tax per gallon is ridiculous, for every dollar spent per gallon the governmnet makes around forty cents to the oil producers eight, and of course the station also makes around eight cents as well. Speculators do one thing, look at reports meaning they see what's being produced at current value, changes, and how much can get to market at current refining capacity they then act long or short accordingly.

    It works the same way that the mortgage mess worked. Values get grossly inflated entirely due to the demand caused investors applying a short-term, profit-right-now investment mentality on an investment that requires a long term mentality. This creates a bubble. It's happened before with Oil (2008 was caused by an oil bubble and it popped, which is what caused prices to crash back down). It'll pop again because the reality of the situation doesn't dictate these prices. The futures look high because of the speculation, not because of supply and demand issue.
    The mortgage crisis was a multi-faceted problem as well. Speculators got sold a horrendous investment that they kept passing along the line until people couldn't take bad debts off other's hands anymore. The federal got involved years ago forcing more high risk mortgages that the financial managers figured out how to make a buck off of. It wasn't the selling that made the mortgages a toxic asset rather complete dishonesty about the return. Oil speculators aren't buying debt, they are buying shares of available production. Buying a bad loan with paper returns is not the same thing as buying something that will have value(or won't if you guess wrong).

    Since it's a commodity, though, it's possible to invest in such a way that even if you are one of the last buyers before the pop, it only affects the insane profits you've enjoyed throughout the buildup process and doesn't actually cause you to lose. The only people who lose in the mix are people who pay these investors for the honor of getting ****ed by their investments (i.e. the people who buy gas at $4 + per gallon).
    Not all speculators are wealthy people. In fact many people have commodities in their retirement portfolios. And I still assert that there is more damage from outside(government regulation) interference than any internal damage(I'm not letting the industry off the hook).

    The system as it exists only benefits the parasitic investors in the end because over the long haul, the suppliers break even on the bargain (they still have to supply and distribute after the bubble bursts so when it all averages out, they would end up in the exact same place if the parasitic investment practices weren't employed, while most of the money changing hands on the investment market doesn't even involve them).
    People react to the conditions present. Predatory would be intentionally creating a sellers market by cutting the supply short or forcing less supply on the demand end through dishonest means.
    Neither side in an argument can find the truth when both make an absolute claim on it.

    LMR

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    Re: If McCain had won in '08, gas would cost...?

    Quote Originally Posted by rocket88 View Post
    OK, there's been a lot of noise about gas prices. Here's a chance for the haters to tell us how much of a utopia we'd be living in if Obama hadn't won.
    If the President of Iran can spike oil prices by threatening to close the strait of Hormuz, how much do you think Obama is affecting gas prices by canceling the Keystone pipeline, banning drilling in the gulf and Ohio, and actively pursuing an anti-American energy policy?
    Get informed: UNICEF foreign adoption policy is killing orphans and the US gives $132 million to UNICEF every year. Stop the madness.
    For the best news and commentary on the 2012 election from the GOP perspective, visit www.whitehouse12.com.

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