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Sell all your oil investment gains Monday

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halik

Lifer
Oct 10, 2000
25,696
1
0
Originally posted by: Skoorb
Originally posted by: halik
Originally posted by: LegendKiller
Originally posted by: Aimster
oil is not going to drop
Want to put a friendly wager on that?
Seconded... there is a bullish bias in the market, but more supply will drop it for sure.
Stop using your brain. If you want to know where the market is going you need to bash your head in with a mallet and then throw a dart on a wall with random numbers. There is no rhyme or reason in it.

OIL UP $5 TODAY

It hit a record today, and yes this is after the 200k output. See, no sanity in the market at all )
Like I said, there's a bullish bias to it, so news that support lower price get less weight than the ones with higher price. It will come off by the end of the week for sure.

It's all behavioral finance in the end - the concept of overconfidence leads people to dismissing negative signals and and take positive signals as reinforcements.



Dollar is down 1% against a basket and july contracts are up 4%. Anyone wanna run the regressions ? Legend Killer? :D
 

Aimster

Lifer
Jan 5, 2003
16,129
2
0
oil is never going to drop below $100/barrel again.

dollar is weak while demand keeps catching up. When the dollar finally stabilized the problem will then be supply/demand.
 

Martin

Lifer
Jan 15, 2000
29,178
1
81
Can I get your predictions for tomorrow? If I do the exact opposite of what you say, I'll be rich in no time.
 

miketheidiot

Lifer
Sep 3, 2004
11,062
1
0
Originally posted by: Aimster
oil is never going to drop below $100/barrel again.

dollar is weak while demand keeps catching up. When the dollar finally stabilized the problem will then be supply/demand.
lol
 

JS80

Lifer
Oct 24, 2005
26,260
4
81
Originally posted by: Skoorb
Originally posted by: halik
Originally posted by: LegendKiller
Originally posted by: Aimster
oil is not going to drop
Want to put a friendly wager on that?
Seconded... there is a bullish bias in the market, but more supply will drop it for sure.
Stop using your brain. If you want to know where the market is going you need to bash your head in with a mallet and then throw a dart on a wall with random numbers. There is no rhyme or reason in it.

OIL UP $5 TODAY

It hit a record today, and yes this is after the 200k output. See, no sanity in the market at all )
hah oil ended down

what a fucking racket. can't wait until this shit unwinds and hedge funds blow up.
 

mozirry

Senior member
Sep 18, 2006
760
1
0
Originally posted by: Martin
Can I get your predictions for tomorrow? If I do the exact opposite of what you say, I'll be rich in no time.
My prediction was to sell Mon. morning because the price range was perfect. Oil ended down because it was stupid to weigh a 150k stoppage in flow due to a fire over a 200k increase provided by a supplier.

I'm sure it might spike a bit higher towards that $140 mark, but I say it's not worth the risk at this point.

There should be a slow and jumpy trend downwards from here on.
 

BansheeX

Senior member
Sep 10, 2007
348
0
0
Sorry guys, we might see some pullbacks here and there, but commodities aren't a bubble. The falling dollar relative to other currencies (which will eventually unpeg) has started to shift demand and purchasing power elsewhere at our expense. Totally sustainable increases in dollar terms, billions of people over there producing and saving. Even though Saudi Arabia is promising more production, Mexico and Venezuela subsidizing more of their own negate that. Politicians continuing to block and tax domestic companies negate it. A complete lack of alternatives for current needs after blocking nuclear for thirty years negate it. No legitimate savings for investment in alternatives negate it. The next bubble to pop is going to be the bond market. Sit back and relax, get some lube.
 

mozirry

Senior member
Sep 18, 2006
760
1
0
Originally posted by: BansheeX
Sorry guys, we might see some pullbacks here and there, but commodities aren't a bubble. The falling dollar relative to other currencies (which will eventually unpeg) has started to shift demand and purchasing power elsewhere at our expense. Totally sustainable increases in dollar terms, billions of people over there producing and saving. Even though Saudi Arabia is promising more production, Mexico and Venezuela subsidizing more of their own negate that. Politicians continuing to block and tax domestic companies negate it. A complete lack of alternatives for current needs after blocking nuclear for thirty years negate it. No legitimate savings for investment in alternatives negate it. The next bubble to pop is going to be the bond market. Sit back and relax, get some lube.
$150 is a bubble, I think oil is sustainable at above $100, but not much more then that. The $3 (EDIT gallon gas) was the sweet spot for the consumer to keep confidence somewhat average, but it is killing the return on almost any other stock even at those levels.

Coal is a hotspot right now
 

StageLeft

No Lifer
Sep 29, 2000
70,150
2
0
Originally posted by: mozirry
Originally posted by: BansheeX
Sorry guys, we might see some pullbacks here and there, but commodities aren't a bubble. The falling dollar relative to other currencies (which will eventually unpeg) has started to shift demand and purchasing power elsewhere at our expense. Totally sustainable increases in dollar terms, billions of people over there producing and saving. Even though Saudi Arabia is promising more production, Mexico and Venezuela subsidizing more of their own negate that. Politicians continuing to block and tax domestic companies negate it. A complete lack of alternatives for current needs after blocking nuclear for thirty years negate it. No legitimate savings for investment in alternatives negate it. The next bubble to pop is going to be the bond market. Sit back and relax, get some lube.
$150 is a bubble, I think oil is sustainable at above $100, but not much more then that. The $3 (EDIT gallon gas) was the sweet spot for the consumer to keep confidence somewhat average, but it is killing the return on almost any other stock even at those levels.

Coal is a hotspot right now
Yep, it's been too quick of a boil and habits are now changing. I am so tired of people pointing to the weak dollar for this, as if the weak dollar is all that matters (it simply doesn't account for much of the recent run-up). How a person can say that this is based on fundamentals when, 6 business days ago, it went up almost 9% in a single session, is beyond me.

 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: BansheeX
Sorry guys, we might see some pullbacks here and there, but commodities aren't a bubble. The falling dollar relative to other currencies (which will eventually unpeg) has started to shift demand and purchasing power elsewhere at our expense. Totally sustainable increases in dollar terms, billions of people over there producing and saving. Even though Saudi Arabia is promising more production, Mexico and Venezuela subsidizing more of their own negate that. Politicians continuing to block and tax domestic companies negate it. A complete lack of alternatives for current needs after blocking nuclear for thirty years negate it. No legitimate savings for investment in alternatives negate it. The next bubble to pop is going to be the bond market. Sit back and relax, get some lube.
The dollar depreciated 35% in the time oil went up 600%. This has nothing to do with the dollar and everything to do with a mix of changing fundamentals (china) and over-investment bubbleheads due to too little regulation of the futures market.

If it is anything more than that, please explain how global demand is either flat, negative, or just marginally increased (depending on measurements) in the last 12 months, yet, somehow, oil has doubled in price. Explain how this somehow happens *EXACTLY* when all of the capital fled the housing and ABS market in general and flew into commodities through index funds, mutual funds, hedge funds, pensions, and other players.

Funny, unrestrained futures market lead to the tulip bubble too.


What's pathetic about you is that you're so concentrated on the dollar and apocalyptic visions that you can't see the real problems. Tunnel vision at its finest.
 

palehorse

Lifer
Dec 21, 2005
11,521
0
76
I love watching LK light the paulbot-end-of-the-world-zealots on fire! It's always a great show...
 

BansheeX

Senior member
Sep 10, 2007
348
0
0
Originally posted by: palehorse
I love watching LK light the paulbot-end-of-the-world-zealots on fire! It's always a great show...
Notice how the last three posts accuse me of only blaming the dollar even though I go into supply/demand and geopolitical issues afterwards and our inability to address those problems in the near-term. I'd say the "tunnel-vision" is entirely in the RP mock-and-balk camp. At the other side of every long trade is a short. If people were taking delivery on this oil and keeping it in their backyard, that would be an overproduction glut bubble like housing. Nothing is pretend here. It's all being consumed at these prices. Not accumulated, consumed. So explain how this is mostly speculative? Good luck with that one.

I'll also add that inflation has a serious lag effect and can take a long time to spread out when wealth in dollars is as concentrated as it is. Notice how oil went up hundreds of percent, but gas itself hasn't yet. We WILL see $8 a gallon in the coming years.
 

StageLeft

No Lifer
Sep 29, 2000
70,150
2
0
Gas has taxes and refining, two things that are unrelated to the cost of oil. The run-up has been unnatural. We could argue all day long, but ultimately when it does burst we'll know who was right.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: BansheeX
Originally posted by: palehorse
I love watching LK light the paulbot-end-of-the-world-zealots on fire! It's always a great show...
Notice how the last three posts accuse me of only blaming the dollar even though I go into supply/demand and geopolitical issues afterwards and our inability to address those problems in the near-term. I'd say the "tunnel-vision" is entirely in the RP mock-and-balk camp. At the other side of every long trade is a short. If people were taking delivery on this oil and keeping it in their backyard, that would be an overproduction glut bubble like housing. Nothing is pretend here. It's all being consumed at these prices. Not accumulated, consumed. So explain how this is mostly speculative? Good luck with that one.

I'll also add that inflation has a serious lag effect and can take a long time to spread out when wealth in dollars is as concentrated as it is. Notice how oil went up hundreds of percent, but gas itself hasn't yet. We WILL see $8 a gallon in the coming years.
This is why I love you guys. So blissfully ignorant, you really have no f'ing clue how things work. You provide so many hours of entertainment.

I will post more later.
 

StageLeft

No Lifer
Sep 29, 2000
70,150
2
0
Originally posted by: LegendKiller

I will post more later.
You might as well talk to a wall. Remember arguing gold standard with paulbots? It's like that. Only the bubble's actual contraction will convince these people, though they'll probably blame it on something else like 'look, OPEC increased production and it went down, i told you it wasn't a bubble!".

 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: BansheeX
Originally posted by: palehorse
I love watching LK light the paulbot-end-of-the-world-zealots on fire! It's always a great show...
Notice how the last three posts accuse me of only blaming the dollar even though I go into supply/demand and geopolitical issues afterwards and our inability to address those problems in the near-term. I'd say the "tunnel-vision" is entirely in the RP mock-and-balk camp. At the other side of every long trade is a short. If people were taking delivery on this oil and keeping it in their backyard, that would be an overproduction glut bubble like housing. Nothing is pretend here. It's all being consumed at these prices. Not accumulated, consumed. So explain how this is mostly speculative? Good luck with that one.

I'll also add that inflation has a serious lag effect and can take a long time to spread out when wealth in dollars is as concentrated as it is. Notice how oil went up hundreds of percent, but gas itself hasn't yet. We WILL see $8 a gallon in the coming years.
So, in followup...

1. The "dollar problem" is only about 5% of the actual contribution to the raise in oil prices.

2. If geopolitical or supply/demand were the issue, then why the 100% runup in a year, despite flat/declining demand. This is in the face of *INCREASING* Opec production, Saudi going up 800k barrels, Brazil finding a huge field, increased activity off of Cuba, and increased activity in Alberta and the Bakken. Oil demand and production shortfall has been about the same over the last 7 years, yet oil has increased over 600%.

Did the "efficient" market suddenly wake up from a collective stupidity to realize oil should be 6x as much? Yeah, that's it!

3. You claim that for every long there is a short. Great, that's true. However, when a short can offset with a long and that short can do the same, you get a tangled web of contracts.

You see, this problem is far more complex than housing, in that yes, you don't have to take physical delivery in order to increase the price, you just have to take more contracts. Consider that the number of contracts outstanding equate to about a *DECADE* of production. Do you think the market can ignorantly not price in the fact that a whole decade of production is already taken and accounted for?

What's also interesting is the fact that this is probably one of the biggest cases of pump and dump we've ever seen. The fact that banks can lay on trillions of dollars worth of contracts, contribute only 5% "equity", while only 5% of that 5% is truly equity Tier I capital. Effectively you are 400x leveraged.

What happens when, say, one of these people who are so heavily "invested" were to release a statement saying that oil will hit a price $20 more than the current? What happens when that analyst happens to work for a bank with a few tens of billions of "notional" of outstanding futures. Isn't that an interesting little tidbit from the .bomb era?

What happens when that new price target is met? Do you layer on new trades? Of course, because you can always claim higher price targets!

Interestingly enough, the banks are in trouble, but many are having their asses saved by commodities trading.

This is a brilliant scheme, in that you never have to take delivery, are 400x leveraged, have a commodity that is highly sought after, and a captive market. Ohh, and by the way, you can trade an unlimited amount, there's no regulation on how much you can handle, you don't even have to report it to your banking regulator, and nobody can track how much you have or what you're doing with it.

Nah, doesn't sound like a bubble to me at all!

That doesn't even touch the fact that capital has flown from the debt markets, en masse, and "index funds" created from these futures are plethoric at this point. What happens when TRILLIONS of dollars goes from one market to another? The new market valuations explode!

Isn't it a bit suspicous that all of this happened at the *EXACT* same time that regulations were removed overseeing futures *AND* when the debt markets blew up, eliminating a more lucrative investment? No, not suspicious in the slightest!

Your problem is that you look at such a pathetically small picture and you think that by reading one aspect you're getting the whole thing. As with Ron Paul's ideas, you're woefully unprepared to think of the big picture.

What's funny is that when this thing blows up and the banks beg for mercy from the Fed, you're going to be screwing "ZOMG, NO FAIR!", yet, with a little bit of brains, you could have prevented the whole thing.
 

ScottMac

Moderator<br>Networking<br>Elite member
Mar 19, 2001
5,471
2
0
Originally posted by: Skoorb
Originally posted by: LegendKiller

I will post more later.
You might as well talk to a wall. Remember arguing gold standard with paulbots? It's like that. Only the bubble's actual contraction will convince these people, though they'll probably blame it on something else like 'look, OPEC increased production and it went down, i told you it wasn't a bubble!".

Well, no. Then it'll be a conspiracy of {a | some | the} evil cabal (and / or George Bush et al).

It's never market forces or unintended consequences, c'mon.
 

BansheeX

Senior member
Sep 10, 2007
348
0
0
I have bookmarked this thread and will resurrect it when oil collapses back down to $70 as you guys say. Because at this point, you aren't just arguing with "conspiracy theorists" anymore, you're arguing against analysts like Schiff and Puplava who identified the tech and housing bubbles in their early stages, avoided them entirely, and are saying that oil ISN'T a bubble. They've been right, and people like LK and the OP of this thread have been wrong. For YEARS. And LKs long diatribe doesn't really answer anything. The dollar has seen a 50% drop in the last eight years, not 5%. And people are still buying and burning at these prices regardless of who is contractually locking in. It's called a bull market, not a bubble.
 

StageLeft

No Lifer
Sep 29, 2000
70,150
2
0
Originally posted by: BansheeX
I have bookmarked this thread and will resurrect it when oil collapses back down to $70 as you guys say. Because at this point, you aren't just arguing with "RP loonies" anymore, you're arguing against analysts like Schiff and Puplava who identified the tech and housing bubbles and are saying that oil ISN'T a bubble. They've been right, and people like LK and the OP of this thread have been wrong. For YEARS. And LKs long diatribe doesn't really answer anything. The dollar has seen a 50% drop in the last eight years, not 5%. And people are still buying and consuming at these prices regardless of who is contractually locking in. It's called a bull market, not a bubble.
You came up with the $70, not anybody here. Anyway, plenty of analysts think it is a bubble and by the very nature of the beast, if we were all in agreement it was a bubble, it wouldn't be possible to have one, would it? They only exist because people are chickens running around with their heads cut off.
 

BansheeX

Senior member
Sep 10, 2007
348
0
0
LOL, if it isn't a bubble, why would anything above that signal a collapse? Oh, hooray, oil went back to $100? I think not.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: BansheeX
I have bookmarked this thread and will resurrect it when oil collapses back down to $70 as you guys say. Because at this point, you aren't just arguing with "conspiracy theorists" anymore, you're arguing against analysts like Schiff and Puplava who identified the tech and housing bubbles in their early stages, avoided them entirely, and are saying that oil ISN'T a bubble. They've been right, and people like LK and the OP of this thread have been wrong. For YEARS. And LKs long diatribe doesn't really answer anything. The dollar has seen a 50% drop in the last eight years, not 5%. And people are still buying and burning at these prices regardless of who is contractually locking in. It's called a bull market, not a bubble.
So in other words, you've got nothing at all. All you have is *OTHER* people's work, same with your idiotic theories about economics and finance. No extrapolation, analysis, reason, logic. Just "BUT...BUT...BUT...HE SAID!" I have my MBA and CFA charter and am doing pretty f'ing well for myself. I called tech bubble and housing bubble too, you can see my calls for housing bubble from 2004, so fucking what?

ROFL, that's why I work at a bank and you're linking youtube videos.

I said the dollar dropped 35% from the day Kabul was freed to today, yet oil went up 616% or so in that area. The dollar's effect on oil is ~5% of the total movement in oil. You suck at math.

Ohh, BTW, where on the USD index were we at 148 in 2000, or any other time? I can't seem to find that, we're at 74 now, so where's your 148?
 

BansheeX

Senior member
Sep 10, 2007
348
0
0
LK, other people are a great resource, particularly ones who have a track record of being correct on their predictions. That's why we have analysts, so us average people can get advice and understand this stuff better. You obviously learned from someone, didn't you?

It's not my fault you can't understand what I'm trying to tell you. OIL IS BEING CONSUMED. IT IS NOT BEING ACCUMULATED FOR LATER SALE. Stop ignoring the fundamental difference of what a bubble is and what a bull market is. If you can't understand my post, this article explains it a bit better

http://www.nytimes.com/2008/05...alink&exprod=permalink
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: BansheeX
LK, other people are a great resource, particularly ones who have a track record of being correct on their predictions. That's why we have analysts, so us average people can get advice and understand this stuff better. You obviously learned from someone, didn't you?

It's not my fault you can't understand what I'm trying to tell you. OIL IS BEING CONSUMED. IT IS NOT BEING ACCUMULATED FOR LATER SALE. Stop ignoring the fundamental difference of what a bubble is and what a bull market is. If you can't understand my post, this article explains it a bit better

http://www.nytimes.com/2008/05...alink&exprod=permalink
Analyst are wrong, often. They were wrong about the .bombs, wrong about housing, and they are wrong about oil.

I know full well that oil is being consumed. I had classes about derivatives/futures in undergraduate, many of them in graduate, and I studied them pretty in-depth for each of the 3 CFA exams.

Current oil is being consumed, yet there can be a disconnect between the consumption and the prices dictated by derivatives, especially since the derivatives can, and have, created far more demand than is currently in place in the whole world. This drives up prices, not through fundamentals, but through paper increases. Houses were being "consumed" also, in a way. You may say that they built up inventory, but that inventory is the same as futures inventory built up, not oil inventory built up.

Easy credit, lack of regulations, lack of capital requirements, and high leverage are all hallmarks of bubbles. This is the same situation, just a bifurcated analysis.

You're too stuck on consumption, but it's because your ignorance about how futures actually work.
 

BansheeX

Senior member
Sep 10, 2007
348
0
0
And if demand never contracts as a result of that price increase from said manipulation or buying up of future phantom goods then it is a sustainable trend. People need oil over many other goods they were previously buying and that's why we've seen it keep going up. But it isn't infinite. There is a reason it is $130 and not $500 right now. And as we go along, if demand does eventually contract substantially, then this all powerful speculator force conspiring to rise oil prices is going to get crushed on these bets since prices will go down.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Originally posted by: BansheeX
And if demand never contracts as a result of that price increase from said manipulation or buying up of future phantom goods then it is a sustainable trend. People need oil over many other goods they were previously buying and that's why we've seen it keep going up. But it isn't infinite. There is a reason it is $130 and not $500 right now. And as we go along, if demand does eventually contract substantially, then this all powerful speculator force conspiring to rise oil prices is going to get crushed on these bets since prices will go down.
Yes, the reason why it's not 500 now is that people know it's not sustainable at that point. They do know it's sustainable at 130 and they are taking their profits. Should it be at 130? Absolutely not.
 

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