[Z06] GM's future and Z06/ZR1
07-07-2008, 05:49 PM
#121
Pro
I'm pretty sure they said that in the late 70's and look where we are. It may not be the same kind of power but trust me there will be more of it. That is just the way humans operate, more power always! Hell, we can't even be satisfied with 200mph in a stock, from the factory vehicle! Gotta make it MORE!
I'd bet that by 2020, the Corvette will be in the 300mph range either by gas, electric or some other means.
I'd bet that by 2020, the Corvette will be in the 300mph range either by gas, electric or some other means.
#2) Kind of power has nothing to do with amount of power. There ain't gonna' be no more after 2009 or 2010. The days of a power war are well and truly over.
#3) 300mph by 2020? You are living in a fantasy world.
You will never see a Corvette with more power than the ZR1. And I'd bet my house on that. Faster? Maybe, but not because of a power increase but because of weight reductions, etc. Z06 with more than 505hp? Forget about it.
So buy your Z06 now.
07-07-2008, 06:05 PM
#122
Team Owner
GM has tons of cash and will not go bankrupt any time in the foreseeable future. Any
What they do not have are products that are both fuel efficient and with a reputation like the Prius.
If you think the vette can't die, read All Corvettes are Red. It almost happened in the '80's and it can certainly happen now.
What they do not have are products that are both fuel efficient and with a reputation like the Prius.
If you think the vette can't die, read All Corvettes are Red. It almost happened in the '80's and it can certainly happen now.
07-07-2008, 06:08 PM
#123
Burning Brakes
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Dr. Williams is the retired head of the economics department at
George Mason University. His credentials are quite adequate.
http://www.townhall.com/columnists/w.../archive.shtml
http://www.gmu.edu/departments/economics/wew/vita.html
Ha ha ha ha. Who's wearing a tin foil hat ?!?! You crack me up.
Econ 101. Washington has been squeezing energy production for
30 years. Demand has continued to rise. Demand exceeds supply,
hence price goes up. Duh. And you want to pin it on futures
trading. Wow.
Joe
George Mason University. His credentials are quite adequate.
http://www.townhall.com/columnists/w.../archive.shtml
http://www.gmu.edu/departments/economics/wew/vita.html
Ha ha ha ha. Who's wearing a tin foil hat ?!?! You crack me up.
Econ 101. Washington has been squeezing energy production for
30 years. Demand has continued to rise. Demand exceeds supply,
hence price goes up. Duh. And you want to pin it on futures
trading. Wow.
Joe
So who is right? You, or your retired professor? If it's the retired Prof, then I'm right too, I just don't think its socially responsible to make money on the backs of this nations economy only because I can. He thinks the pricing function of futures plays a good role. I thinks it's obvious that it doesn't. But why am I saying this? You linked the article and then said that you think it's all supply and demand. Clearly you didn't understand the article you linked.
I typically philisophically disagree with people who post articles on Townhall.com, such as Anne Coulter and Michelle Malkin. No surprise there.
07-07-2008, 06:15 PM
#124
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GM has tons of cash and will not go bankrupt any time in the foreseeable future. Any
What they do not have are products that are both fuel efficient and with a reputation like the Prius.
If you think the vette can't die, read All Corvettes are Red. It almost happened in the '80's and it can certainly happen now.
What they do not have are products that are both fuel efficient and with a reputation like the Prius.
If you think the vette can't die, read All Corvettes are Red. It almost happened in the '80's and it can certainly happen now.
"Wagoner sought to reassure investors and analysts with GM shares falling to their lowest level since the mid-1950s and new concern surfacing on Wall Street that the auto giant may have to raise capital."
"As we've said before, we've got a very good, solid funding base under any scenario we see, solid through the end of this year," Wagoner told reporters after attending an economic summit with U.S. Democratic presidential candidate Barack Obama."
07-07-2008, 08:17 PM
#125
Team Owner
You've got more confidence than Wagoner has regarding liquidity. They really don't have tons of cash and that is a real problem that must be dealt with soon.
"Wagoner sought to reassure investors and analysts with GM shares falling to their lowest level since the mid-1950s and new concern surfacing on Wall Street that the auto giant may have to raise capital."
"As we've said before, we've got a very good, solid funding base under any scenario we see, solid through the end of this year," Wagoner told reporters after attending an economic summit with U.S. Democratic presidential candidate Barack Obama."
"Wagoner sought to reassure investors and analysts with GM shares falling to their lowest level since the mid-1950s and new concern surfacing on Wall Street that the auto giant may have to raise capital."
"As we've said before, we've got a very good, solid funding base under any scenario we see, solid through the end of this year," Wagoner told reporters after attending an economic summit with U.S. Democratic presidential candidate Barack Obama."
http://www.bnet.com/2407-14028_23-207985.html
The problem is that several years ago, GM's cash reserve was much higher and the direction of the curve remains negative.
I have maintained for years that even with the legacy costs GM and the other US auto makers face, the single biggest problem is that they have yet to produce a car that the average American consumer is interested in buying in large numbers. Make an Accord or Camry equivalent that is comfy, reliable and has an interior that looks like it didn't come out of a Cracker Jack box, and market share will go up. It is not that Honda or Toyota have any great secret, they have made a better product for a long period of time. You can argue all you want about all of the great cars we produce, but the bottom line is what the consumer purchases. Nothing else matters.
I find it inconceivable that managment has been able to be so incompetent for so long.
I also believe that the Corvette could well see the axe if sales continue to weaken. When you are trying to keep a company afloat, tradition doesn't mean as much as it does in good times.
Last edited by vette6799; 07-07-2008 at 08:21 PM.
07-07-2008, 11:20 PM
#126
Team Owner
I'm pretty sure they said that in the late 70's and look where we are. It may not be the same kind of power but trust me there will be more of it. That is just the way humans operate, more power always! Hell, we can't even be satisfied with 200mph in a stock, from the factory vehicle! Gotta make it MORE!
I'd bet that by 2020, the Corvette will be in the 300mph range either by gas, electric or some other means.
I'd bet that by 2020, the Corvette will be in the 300mph range either by gas, electric or some other means.
When they really admitted they had a problem the had about 35 billion so it is going real fast. Anything is possible as you see from the articles and nothing is golden.
Ford sold or mortgaged most of it's holdings even factories to raise cash to make a turn around and GM may be in the same boat.
Chrysler was always weaker to start with but it will still cost them the same or more to develop new cars, engines and drive trains. It will cost them more because they sell fewer units. They will be cutting many vehicles from thier line including the Viper. They are trying to increase volume by selling vehicles like the pickup and minivan to others like Nissan to rebadge.
Taking years to get a car to market to increase profits is slow. GM can't wait till all the money is gone and say we need money as they weaken even rumours will put people off from buying their cars. I am sure Toyota is gloating so keep buying them!
Last edited by John Shiels; 07-07-2008 at 11:39 PM.
07-08-2008, 08:23 PM
#127
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Unfortunately, economics 101 has no place in this market. Thanks to the brilliance (sic) of Phil Graham, I can buy oil futures, and they have a marvelous track record as a hedge against inflation. No, I can't actually receive oil, so as a future purchaser, I am purely a speculator. Now, lets say I see the market in managing a fund of these crude oil futures, and all of a sudden anyone who wants a nice hedge against the rising oil prices can dial up my fund and buy some with a Fidelity account.
Now, who, in right mind, wouldn't want a hedge against inflation right now? The Fed is powerless to stop it, because decreasing the money supply would weaken the already angry credit market. Increasing fuel prices drive up supply chain costs for everything. *EVERYTHING*. That is inflation. Real wages in turn not only cannot rise in turn, but we, as consumers, are both tapped out credit-wise and facing ever-growing fuel bills ourselves. Our real income is heading downhill fast.
The only way to re-stabilize (note I didnt say lower... just stabilize... I dont think we'll ever see <$90 light sweet crude again) oil is to dis-allow anyone from buying oil futures if they cannot actually receive, by law, the oil. Then those of us with a lot of money will be less able to easily hedge against inflation, just like the little guy. And we might be forced to...oh... I dunno... do something constructive with our money like invest it in a business or in somewhere useful. And if you think some drilling off the coast of Florida (or AK, or CA, or WA, or NJ for all I care) that will bring oil online in 5+ years is going to keep me from betting on oil futures? Give me a break! Most oil futures and derivatives are less than 6 months.
Thats not economics 101... that's economics 332 (options and derivatives), but its the dominant force today in everything from GM's troubles to the USA's resource security.
Thanks Phil Graham!
Now, who, in right mind, wouldn't want a hedge against inflation right now? The Fed is powerless to stop it, because decreasing the money supply would weaken the already angry credit market. Increasing fuel prices drive up supply chain costs for everything. *EVERYTHING*. That is inflation. Real wages in turn not only cannot rise in turn, but we, as consumers, are both tapped out credit-wise and facing ever-growing fuel bills ourselves. Our real income is heading downhill fast.
The only way to re-stabilize (note I didnt say lower... just stabilize... I dont think we'll ever see <$90 light sweet crude again) oil is to dis-allow anyone from buying oil futures if they cannot actually receive, by law, the oil. Then those of us with a lot of money will be less able to easily hedge against inflation, just like the little guy. And we might be forced to...oh... I dunno... do something constructive with our money like invest it in a business or in somewhere useful. And if you think some drilling off the coast of Florida (or AK, or CA, or WA, or NJ for all I care) that will bring oil online in 5+ years is going to keep me from betting on oil futures? Give me a break! Most oil futures and derivatives are less than 6 months.
Thats not economics 101... that's economics 332 (options and derivatives), but its the dominant force today in everything from GM's troubles to the USA's resource security.
Thanks Phil Graham!
Most futures go out to a year not justy 6 months and LEAPS go for several years. Last week oil futures for August delivery were at 146 a barrel. The LEAP (oil future) for Jan 2013 delivery was at 124 a barrel, now figure out that one. Saudi's themselves say oil should be no higher than 100 brl
The oil futures market is being bid up purely on speculation and has nothing to do with supply and demand. Rumored a lot of mid east proxy money bidding in the oil futures market. What a surprise.
07-08-2008, 10:07 PM
#128
Unfortunately, economics 101 has no place in this market. Thanks to the brilliance (sic) of Phil Graham, I can buy oil futures, and they have a marvelous track record as a hedge against inflation. No, I can't actually receive oil, so as a future purchaser, I am purely a speculator. Now, lets say I see the market in managing a fund of these crude oil futures, and all of a sudden anyone who wants a nice hedge against the rising oil prices can dial up my fund and buy some with a Fidelity account.
Now, who, in right mind, wouldn't want a hedge against inflation right now? The Fed is powerless to stop it, because decreasing the money supply would weaken the already angry credit market. Increasing fuel prices drive up supply chain costs for everything. *EVERYTHING*. That is inflation. Real wages in turn not only cannot rise in turn, but we, as consumers, are both tapped out credit-wise and facing ever-growing fuel bills ourselves. Our real income is heading downhill fast.
The only way to re-stabilize (note I didnt say lower... just stabilize... I dont think we'll ever see <$90 light sweet crude again) oil is to dis-allow anyone from buying oil futures if they cannot actually receive, by law, the oil. Then those of us with a lot of money will be less able to easily hedge against inflation, just like the little guy. And we might be forced to...oh... I dunno... do something constructive with our money like invest it in a business or in somewhere useful. And if you think some drilling off the coast of Florida (or AK, or CA, or WA, or NJ for all I care) that will bring oil online in 5+ years is going to keep me from betting on oil futures? Give me a break! Most oil futures and derivatives are less than 6 months.
Thats not economics 101... that's economics 332 (options and derivatives), but its the dominant force today in everything from GM's troubles to the USA's resource security.
Thanks Phil Graham!
Now, who, in right mind, wouldn't want a hedge against inflation right now? The Fed is powerless to stop it, because decreasing the money supply would weaken the already angry credit market. Increasing fuel prices drive up supply chain costs for everything. *EVERYTHING*. That is inflation. Real wages in turn not only cannot rise in turn, but we, as consumers, are both tapped out credit-wise and facing ever-growing fuel bills ourselves. Our real income is heading downhill fast.
The only way to re-stabilize (note I didnt say lower... just stabilize... I dont think we'll ever see <$90 light sweet crude again) oil is to dis-allow anyone from buying oil futures if they cannot actually receive, by law, the oil. Then those of us with a lot of money will be less able to easily hedge against inflation, just like the little guy. And we might be forced to...oh... I dunno... do something constructive with our money like invest it in a business or in somewhere useful. And if you think some drilling off the coast of Florida (or AK, or CA, or WA, or NJ for all I care) that will bring oil online in 5+ years is going to keep me from betting on oil futures? Give me a break! Most oil futures and derivatives are less than 6 months.
Thats not economics 101... that's economics 332 (options and derivatives), but its the dominant force today in everything from GM's troubles to the USA's resource security.
Thanks Phil Graham!
Second...Why don't you explain how speculations works in say the finance industry?
Third...We are all speculators. Example..let's say that you heard on the new that something happen to the supply of gas..a pipeline broke for example and the news says that the price of gas will probably increase by .10 tomorrow. What would everyone on this board do..we would go out and fill up our tanks so we could be the price increase. That is SPECULATION.
Example #2...Let's say you want to buy a house but you just have not pulled the trigger yet. You hear on the news that the Fed will increase the prime rate by say 1% next month. Now if you are smart you wil go out and pull the trigger on your purchase to try and beat the rate increase. You are now SPECULATING that it will be cheaper to buy today than tomorrow.
Fourth..Walter Williams has forgotten more about economics than you, I and eveyone else on this board knows.
07-08-2008, 10:56 PM
#129
Burning Brakes
GM must reconstruct its labor contracts, in order to stay in business, the union MUST go, its rubbish. They have let the other manufactors destroy them in this aspect for far too long, and now are seeing the results. An it is very sad as they seemingly have started producing quality products again verus some of the mid 90s debacles.
07-09-2008, 01:49 AM
#130
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First..It's not the speculators that are driving up the coost of oil. What do they do...they speculate on the future prices and they also go by what the USA is doing (speculating about waht we will or will not do).....and...that is nothing. The speculators would not want to be holding oil at x price and be stuck with it when it comes down and is Y price. The announcement that Congress was opening the way for domestic production would lead to downward pressure on oil prices. Why do you think Bush went to Saudi Arabia in May-to aks them to increase production which they cut 2-3 time in a 1-2 years. Go look and see what happened to the price of crude when they cut production.
Second...Why don't you explain how speculations works in say the finance industry?
Third...We are all speculators. Example..let's say that you heard on the new that something happen to the supply of gas..a pipeline broke for example and the news says that the price of gas will probably increase by .10 tomorrow. What would everyone on this board do..we would go out and fill up our tanks so we could be the price increase. That is SPECULATION.
Example #2...Let's say you want to buy a house but you just have not pulled the trigger yet. You hear on the news that the Fed will increase the prime rate by say 1% next month. Now if you are smart you wil go out and pull the trigger on your purchase to try and beat the rate increase. You are now SPECULATING that it will be cheaper to buy today than tomorrow.
Fourth..Walter Williams has forgotten more about economics than you, I and eveyone else on this board knows.
Second...Why don't you explain how speculations works in say the finance industry?
Third...We are all speculators. Example..let's say that you heard on the new that something happen to the supply of gas..a pipeline broke for example and the news says that the price of gas will probably increase by .10 tomorrow. What would everyone on this board do..we would go out and fill up our tanks so we could be the price increase. That is SPECULATION.
Example #2...Let's say you want to buy a house but you just have not pulled the trigger yet. You hear on the news that the Fed will increase the prime rate by say 1% next month. Now if you are smart you wil go out and pull the trigger on your purchase to try and beat the rate increase. You are now SPECULATING that it will be cheaper to buy today than tomorrow.
Fourth..Walter Williams has forgotten more about economics than you, I and eveyone else on this board knows.
07-09-2008, 02:17 AM
#131
Melting Slicks
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can someone explain how buying futures drives up the cost of the underlying asset?
http://www.telegraph.co.uk/money/mai...ndenham124.xml seems to successfully argue that the folks making money trading on oil have no effect on the price. I'll admit though, I don't fully grasp everything in that article and am not able to critically analyze it anyway.
http://www.telegraph.co.uk/money/mai...ndenham124.xml seems to successfully argue that the folks making money trading on oil have no effect on the price. I'll admit though, I don't fully grasp everything in that article and am not able to critically analyze it anyway.
Last edited by mousecatcher; 07-09-2008 at 02:24 AM.
07-09-2008, 02:38 AM
#132
Le Mans Master
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can someone explain how buying futures drives up the cost of the underlying asset?
http://www.telegraph.co.uk/money/mai...ndenham124.xml seems to successfully argue that the folks making money trading on oil have no effect on the price. I'll admit though, I don't fully grasp everything in that article and am not able to critically analyze it anyway.
http://www.telegraph.co.uk/money/mai...ndenham124.xml seems to successfully argue that the folks making money trading on oil have no effect on the price. I'll admit though, I don't fully grasp everything in that article and am not able to critically analyze it anyway.
IT IS SIMPLE FOLKS. 60,000 CONTRACTS USE TO TRADE PER DAY- NOW IT IS OVER 250,000/DAY THEY ARE CREATING DEMAND THAT DOESN'T EVEN EXIST. CREATING FAKE SHORTAGES
IF THEY WOULD JUST INCREASE THE MARGIN A LITTLE AND LIMIT THE COVERING WITH PUTS. OIL WOULD DROP 40 BUCKS IN ONE DAY !!!!!!!!!!!!!!!
THE BROKERS ARE MAKING A FORTUNE AND DON'T WANT TO LOSE THIS LUCRATIVE DAILY TRADE VOLUME! GREEDY CREEPS
07-09-2008, 06:41 AM
#133
Team Owner
GM must reconstruct its labor contracts, in order to stay in business, the union MUST go, its rubbish. They have let the other manufactors destroy them in this aspect for far too long, and now are seeing the results. An it is very sad as they seemingly have started producing quality products again verus some of the mid 90s debacles.
07-09-2008, 06:44 AM
#134
Team Owner
July 07, 2008
Oil At $200 And A Two-Year Recession
The predictions of $200 oil have made it to the front page of The Wall Street Journal. They have been hanging around in less prominent places, but now they gain some further legitimacy. According to the paper, "Oil's historic ascent from $100 to nearly $150 a barrel in just six months is lending weight to a far grimmer prediction: Crude could reach $200 a barrel by the end of the year." The Journal predicts this would push gas prices to $6 a gallon.
If gas goes that high, several industries will be toast. Airlines and auto companies are obvious. The bankruptcy courts will be filled to overflowing with their lawyers and creditors' counsels. The result could be one of the largest restructuring in the recent history of the US economy. Where the capital will come from to do this is anyone's guess.
The falling of the dominoes does not end there. Gas and oil prices at unprecedented levels may well push energy costs to 20% to 25% of the income of many middle class households. In regions where the weather gets particularly cold in the Winter, that number could go even higher. Consumer spending would be completely arrested. Retail sales would be damaged beyond all but the most negative predictions.
Any industry which relies on transportation, whether it is newspapers or forestry products, would face costs which could easily wipe out gross margins. The impact could be so profound that it could effect the way that some people get most of their daily news.
Oil at $200 would seize up the economy to the extent that virtually no industry would me immune. Fixing the problem could take a year, and, perhaps, much longer. The US has not seen anything like it and has no experience with remedies, which makes solving the trouble all the harder.
Douglas A. McIntyre
what is the Corvette worth if that happens?
Oil At $200 And A Two-Year Recession
The predictions of $200 oil have made it to the front page of The Wall Street Journal. They have been hanging around in less prominent places, but now they gain some further legitimacy. According to the paper, "Oil's historic ascent from $100 to nearly $150 a barrel in just six months is lending weight to a far grimmer prediction: Crude could reach $200 a barrel by the end of the year." The Journal predicts this would push gas prices to $6 a gallon.
If gas goes that high, several industries will be toast. Airlines and auto companies are obvious. The bankruptcy courts will be filled to overflowing with their lawyers and creditors' counsels. The result could be one of the largest restructuring in the recent history of the US economy. Where the capital will come from to do this is anyone's guess.
The falling of the dominoes does not end there. Gas and oil prices at unprecedented levels may well push energy costs to 20% to 25% of the income of many middle class households. In regions where the weather gets particularly cold in the Winter, that number could go even higher. Consumer spending would be completely arrested. Retail sales would be damaged beyond all but the most negative predictions.
Any industry which relies on transportation, whether it is newspapers or forestry products, would face costs which could easily wipe out gross margins. The impact could be so profound that it could effect the way that some people get most of their daily news.
Oil at $200 would seize up the economy to the extent that virtually no industry would me immune. Fixing the problem could take a year, and, perhaps, much longer. The US has not seen anything like it and has no experience with remedies, which makes solving the trouble all the harder.
Douglas A. McIntyre
what is the Corvette worth if that happens?
07-09-2008, 12:31 PM
#135
Burning Brakes
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can someone explain how buying futures drives up the cost of the underlying asset?
http://www.telegraph.co.uk/money/mai...ndenham124.xml seems to successfully argue that the folks making money trading on oil have no effect on the price. I'll admit though, I don't fully grasp everything in that article and am not able to critically analyze it anyway.
http://www.telegraph.co.uk/money/mai...ndenham124.xml seems to successfully argue that the folks making money trading on oil have no effect on the price. I'll admit though, I don't fully grasp everything in that article and am not able to critically analyze it anyway.
Here's a question to all these pro-speculator authors:
The recent mortgage crisis was caused when investment vehicles were created out of mortage bundles. This investment vehicles created such demand in the mortgage market that people were writing bad mortgages just to get the incredible price for the mortgages.
The fact that an investment vehicle was made out of the mortgage drove the demand for the mortgages WAY up. Nobody wanted the underlying product, the mortgage... just the returns.
How is making an investment vehicle out of oil NOT doing the exact same thing... driving the demand WAY up? The speculators dont actually WANT the oil, they just want the money... just like the speculators in the mortgage crisis.
If this wasnt such an issue, the price for most everything would not be increasing so fast. If inflation wasnt occuring, the fed could increase the money supply to ease credit concerns, and companies like GM would both have access to liquid capitol as well as have a little more time to move it's product line away from trucks and into Volts.
I'm sorry guys... I haven't seen anything but "That's not capitolism!" opinion articles about regulating oil speculation or posts that I just flat out can't understand. It's obvious that either this rampant speculation is dealt with, or we will see many more problems, both for GM and for Corvette owners (who like to drive them a lot).
07-09-2008, 01:18 PM
#136
Melting Slicks
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The recent mortgage crisis was caused when investment vehicles were created out of mortage bundles. This investment vehicles created such demand in the mortgage market that people were writing bad mortgages just to get the incredible price for the mortgages.
The fact that an investment vehicle was made out of the mortgage drove the demand for the mortgages WAY up. Nobody wanted the underlying product, the mortgage... just the returns.
How is making an investment vehicle out of oil NOT doing the exact same thing... driving the demand WAY up? The speculators dont actually WANT the oil, they just want the money... just like the speculators in the mortgage crisis.
The fact that an investment vehicle was made out of the mortgage drove the demand for the mortgages WAY up. Nobody wanted the underlying product, the mortgage... just the returns.
How is making an investment vehicle out of oil NOT doing the exact same thing... driving the demand WAY up? The speculators dont actually WANT the oil, they just want the money... just like the speculators in the mortgage crisis.
That means if traders take short positions, they should drive the price of oil down, right? Do we know how many long vs short positions are out there?
07-09-2008, 01:23 PM
#137
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JUST ANOTHER GUY BEING PAID BY STOCKBROKERS.
IT IS SIMPLE FOLKS. 60,000 CONTRACTS USE TO TRADE PER DAY- NOW IT IS OVER 250,000/DAY THEY ARE CREATING DEMAND THAT DOESN'T EVEN EXIST. CREATING FAKE SHORTAGES
IF THEY WOULD JUST INCREASE THE MARGIN A LITTLE AND LIMIT THE COVERING WITH PUTS. OIL WOULD DROP 40 BUCKS IN ONE DAY !!!!!!!!!!!!!!!
THE BROKERS ARE MAKING A FORTUNE AND DON'T WANT TO LOSE THIS LUCRATIVE DAILY TRADE VOLUME! GREEDY CREEPS
IT IS SIMPLE FOLKS. 60,000 CONTRACTS USE TO TRADE PER DAY- NOW IT IS OVER 250,000/DAY THEY ARE CREATING DEMAND THAT DOESN'T EVEN EXIST. CREATING FAKE SHORTAGES
IF THEY WOULD JUST INCREASE THE MARGIN A LITTLE AND LIMIT THE COVERING WITH PUTS. OIL WOULD DROP 40 BUCKS IN ONE DAY !!!!!!!!!!!!!!!
THE BROKERS ARE MAKING A FORTUNE AND DON'T WANT TO LOSE THIS LUCRATIVE DAILY TRADE VOLUME! GREEDY CREEPS
Last edited by bmastroman; 07-09-2008 at 01:26 PM.
07-09-2008, 01:26 PM
#138
Burning Brakes
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But yes, thats true. A serious demand for shorts can deep six a commodity, other than the one day or a short period of time where shorts have to be "covered". THat usually created demand for long positions, creating long demand for a brief moment.
07-09-2008, 01:32 PM
#139
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As This Oil Price Cycle Completes It's Current Course, The Ones Holding The 130 And 140 Contracts In The End When The Prices Get Bid Down To About 115 Which It Will Before Year End Will Get Killed Because Nobody Will Be Taking Delivery On The Contracts .
07-09-2008, 02:24 PM
#140
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I should point out that there are a number of consumers of oil that buy futures, in my opinion, quite legitimately. Southwest Airlines weathered a significant part of this storm up until recently by keeping a huge hedge of oil and fuel futures. They can take the oil and fuel (and will).
A very large part of my strategy here is to buy futures on foriegn currencies so that our international supply chain doesnt bring us any FX surprises. If we let the contract expire, which we often do, the supply pool in FX is so massive that it doesn effect a thing. That will only not be different in the case of oil because I think the price will continue to rise, and people will buy those futures prior to expiration for a slight discount rather than just buy off the market.
Now... if the price did go down, it would go WAY down (i.e. a bubble), due to all this futures leverage collapsing demand. That's true. Imagine that. Regulate oil speculation and prices would significantly decrease!