Say Anything Blog

Hedging generally is called for in a volatile market, in order to stabilize the price and quantity swings.  This is standard economic knowledge, btw.  Commodity markets, due to their nature, tend to be volatile, thus the hedging(or “speculation").  It’s reactive, not proactive.
The example most often used to demonize the hedge market, the Hunt brothers attempt to corner the silver market, was an example of an attempted monopoly, and had nothing to do with the normal speculation that goes on in commodity markets.
This is just another example of the leftie “redefinition” game.  It’s CYA time for the Dem energy restrictionists; they are trying to avoid the responsibility for the consequences of their energy policies since Carter.

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As noted on these very pages some six weeks ago, if Congress stupidly tries to impose unreasonable regulatory limitations on the futures markets, the traders who drive those futures markets will simply pick up and move their business elsewhere… a process which has already begun in anticipation of more market regulation.

“Poverty of goods is easily cured; poverty of the mind is irreparable.”

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’T OWN THE ELECTRIC AND WITH THE GENERATOR RECHARGING THE BATTERIES WE WOULD NOT USE THE ELECTRIC WE WOULD JUST RECHARGING THE BATTERIES. THEN THEY COULD SELL PART OF THE OIL TO OTHER COUNTRIES FOR THE HIGH DOLLARS AND
ABOUT EVERYONE WOULD BE HAPPY AND THE AUTO COMPANIES COULD PUT A LOT OF PEOPLE BACK TO WORK. AND THE AIR LINE WOULD BE ABLE TO GET CHEAPER FUEL AND PUT MORE PEOPLE BACK TO WORK. GOD BE GOOD TO US AND WAKE THE PEOPLE UP IN JESUS NAME I ASK. DONALD KEITH MANKA

WELL I JUST LEFT A MESSAGE ABOUT THE ELECTRIC CAR AND FIGURED OUT HOW TO CONTACT THEM AND SENT THEM A MESSAGE ON HOW IT COULD BE DONE. ALL I ASK FROM THEM TO PUT THEIR PEOPLE BACK TO WORK. WE HAD BETTER DO IT BEFORE SOME OTHER COUNTRY DOES IT. GOD BESS ALL AND A GOOD NIGHT.

Who let this keith_glory2 guy out of his cage? You invited the insane out to play.

Robert108, hedging and speculating are not the same thing.

Hedging is what a business does to reduce risk.  A business that uses a commodity buys futures in that commodity so that they can have price certainty and make other agreements.  This has an economic benefit.  It helps produce something and has a benefit for the market.

Speculation is what somebody does when they buy futures in a commodity gambling that it will go up, just so they can sell and make a profit.  Nothing is produced by speculation.  It just adds a middleman and is a detriment to the market.

Nothing is produced by speculation.  It just adds a middleman and is a detriment to the market.

Thanks for the Marxist spin.  Your economic ignorance is noted.  The thing you seem to be unaware of is that when the “speculator” buys his futures, the seller of the commodity gets the price he wants for his goods.  In our system, no transaction takes place unless both parties see a benefit.  It is not “detrimental to the market”, since, if commodity prices are stable, there is no point to hedging or speculation. The terms are interchangable, btw.  You lefties use “speculation” when you want to demonize the transaction, and “hedging” when you talk about the source of the Soros fortune.
On the other hand, if the commodity prices go down, those who bought at the higher price lose money.  It’s called “risk”, and it’s what determines the amount of return possible in a transaction. The greater the risk, the greater the reward.

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to robert108 about me being a marxist i thought that i am and alway have been living in a free country, call me a demorcrate or republican but not a marxist, you must be in the buying and selling oil so if i don’t like paying $4.00
plus for a gallon of gas so that you will get richer off the people. if you like seeing food, gas, propane, natual
gas, electric and more go up in price because you are getting rich off the people making a hard ship on the working people not speculators in the oil.and you call it a risk well the electric car would keep you from taking such a risk, the greater the risk the greater the reward for just a few the rest of us have to make you rich i don’t think so. i am rich in gods love i am not full of greed. i have something that money can’t buy, i have god, jesus and the holy ghost, a good wife, and god meets our needs not our wants. you say if i don’t know by now don’t mess with it. well my freind let me tell you it is about time all the people take a stand and say enough is enough. may god bless you and you family. donald keith manka

i am rich in gods love

Then why do you complain and demonize others so much?
I think you’re confused(in fact, I know you’re confused).  Lestat is the Marxist here.
I suggest you get an elementary economics book, since you seem entirely ignorant on the subject.

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Speculation is what somebody does when they buy futures in a commodity gambling that it will go up, just so they can sell and make a profit.  Nothing is produced by speculation.  It just adds a middleman and is a detriment to the market.

Rubbish!!!  What is produced is a profit for the person or entity willing to take the risk.  And it is that profit, and the reward for taking the risk, that ultimately drives this, or any other, economy.  Without risk and reward, without profit, there is no economy… no goods, no services.

“Poverty of goods is easily cured; poverty of the mind is irreparable.”

...hedging and speculating are not the same thing.

Lestat,

Your premise is your first mistake.  Hedging and speculation are exactly the same thing:  paying a premium to assume a risk in hopes of a profit.  The distinction you make is between the various reasons for doing this.  By your illogical rationale, this service, and this">http://www.fuelbank.com/]this one too, ought to be outlawed as speculative rather than being hailed as market innovators.

Furthermore, the underlying assumption behind your difference without a distinction is that the government ought to be in charge of determining who can profit in the market and who cannot… as dangerously counter-productive and un-American notion as you or any other “progressive” has ever offered here.

“Poverty of goods is easily cured; poverty of the mind is irreparable.”

...without profit, there is no economy… no goods, no services.

Exactly.  It’s the environazi wet dream: subsistence level economy, Stone Age technology, and far fewer humans.

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IF THEY HAD TO TAKE ALL THE OIL AND STORE IT INSTEAD OF JUST BIDDING ON THE OIL WITHOUT HAVING TO DO ANYTHING WITH IT THAT IS WHAT YOU CALL PAPER OIL. NOT IF YOU WERE BUYING THE OIL AND TAKING CONTROL OF IT AND THEN YOU COULD SELL IT AND I WOULD NOT SAY A WORD, BUT YOU ARE JUST TRADING PAPER COSTING THE PRICE TO GO UP. BUT IF YOU HAD TO TAKE THE OIL AND KEEP IT SOME WHERE YOU WOULD NOT BUY IT. SO REALLY YOU A PAPER PUSHER AND NOT A OIL MAN. YOU JUST OWN PAPER. THINK THAT ONE OVER SEE WHAT YOU CAN COME UP WITH NEXT. YOU SHOULD HAVE TO TAKE CONTROL OF THE OIL BEFORE YOU CAN SELL ANY OIL BECAUSE UNTILL YOU HAVE THE OIL YOUR ARE JUST PASSING PAPER AROUND RIPING THE PEOPLE OFF.

Keith,

No doubt there is some subject out there on which you are qualified to offer an opinion and have that opinion given serious and thoughtful consideration.  But economics and the function of markets, any markets, ain’t it.

Find another subject.  Save yourself further embarrassment.

“Poverty of goods is easily cured; poverty of the mind is irreparable.”

THE WAR WAS NOT OVER ANYTHING BUT WHEN SADAM TRYED TO KILL BUSH SENIOR THAT WAS WHY WE WENT TO WAR BUT WHEN BUSH JR. STARTED THE POLICE ACTION I AM AGAINST IT. BUSH WAS WRONG FOR NOT TELLING THE PEOPLE WHAT HAPPEND AND WHEN THEY HAD SADAM THEN WE SHOULD HAVE CAME HOME. RIGHT NOW BETTER WORRIE ABOUT IRAN THAT IS WERE THE TROUBLE IS AT. THAT IS WHY I WOULD RATHER HAVE MCCAIN IN AS PRESIDENT IF OBAMA GET IN IRAN WILL COME AFTER US AND I CAN’T TRUST OBAMA TO STAND UP AGAINT THEM OR ISRAEL.

OK I WILL TALK ABOUT SOMETHING ELSE, GOD TELLS US THAT A CAMEL HAS A BETTER CHANCE TO GET THROUGH THE EYE OF A NEEDLE THAN A RICH MAN GOING TO HEAVEN, GOD BLESS ALL.

Every time you buy a newspaper, you are speculating that what’s in it will be worth what you paid for it.
Every purchase is a speculation.

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Lestat - Nothing is produced by speculation.

Nothing except stability of product price in volatile markets. Stability is the raison d’être for the existence of speculators. It is their purpose.

Every time you buy a newspaper, you are speculating that what’s in it will be worth what you paid for it.

r108: I’ll disagree with you a mite...Buying the newspaper may be a potential risk that it is not worth the price of purchase.’
Speculation is when you buy the paper for fifty cents, in hopes that someday you might resell it for a dollar! If that’s the case, you may buy more than one…

For any voter trying to choose between the two candidates for commander in chief, there is no better test than this: When American strategy in a critical theater was up for grabs, John McCain proposed a highly unpopular and risky path, which he accurately predicted could lead to success. Barack Obama proposed a popular and politically safe route that would have led to an unnecessary and debilitating American defeat at the hands of al Qaeda.

Frederick W. Kagan

Proof: Anything involving risk is speculative.  The word “speculator” is being demonized right now, for partisan political purposes; don’t fall for it.

Media uncovers more Palin stories in one weekend than Obama stories in two years. Still no bias detected

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And it is that profit, and the reward for taking the risk, that ultimately drives this, or any other, economy.

Well I disagree, it is production that drives an economy.

Well I disagree, it is production that drives an economy.

You obviously subscribe to the Marxist “labor theory of value” nonsense.
In the real world, supply is created by demand.  How’s the buggy whip industry doing?  How’s the typewriter business these days?  How about that adding machine market?
Without the profit motive, we would all be only doing subsistence work.  Made your own shoes and clothes lately?  How about building a car for yourself?  Grow all your own food?
Educate yourself, Hawk.  Marxist ideology never fed a hungry child.  /humor

Media uncovers more Palin stories in one weekend than Obama stories in two years. Still no bias detected

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i agree with you but you can get the speculators to see it they are full of greed for that money they can’t get enough of it like our government