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Experts deride senators' plan to ban large investors from oil, other commodity trading
The latest plan circulating in Congress would ban large institutional investors from trading commodities altogether. It is a radical idea that might sound appealing to motorists and small business owners, but experts say it would actually do little to lower prices and could have the opposite effect.
Prohibition in the United States
When Prohibition was introduced, I hoped that it would be widely supported by public opinion and the day would soon come when the evil effects of alcohol would be recognized. I have slowly and reluctantly come to believe that this has not been the result. Instead, drinking has generally increased; the speakeasy has replaced the saloon; a vast army of lawbreakers has appeared; many of our best citizens have openly ignored Prohibition; respect for the law has been greatly lessened; and crime has increased to a level never seen before. - John D. Rockefeller, Jr., 1932
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
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At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
17 hours ago
5 comments:
Stag,
I'm really tired of hearing that speculators can't artificially cause prices to soar. Look at the volume increases in commodity trades. Huge growth.
Was it the fundamentals of rational supply & demand that drove the prices of dot-com stocks and houses? How about Japanese stocks or tulips?
We have a bubble in excess money looking for real returns.
My gut feels worse than ever.
Here's a contrarian multi-year trade: short oil, buy airline stocks (with leverage). Awesome opportunity for a hedge fund betting with other peoples money.
MAB,
I was thinking of doing a hedge fund based on coin flipping.
The Heads We All Win Tails Only You Lose Fund
Unfortunately, there is way too much competition these days. We clearly need to be more financially innovative than that.
Here's a contrarian multi-year trade: short oil, buy airline stocks (with leverage). Awesome opportunity for a hedge fund betting with other peoples money.
It's a great idea but I suspect at least a few funds are already doing that. Maybe we could form a hedge fund investing in hedge fund managers. They seemingly can't lose. We could leverage up the action and keep 20% for ourselves. Better yet!
http://www.sec.gov/answers/hedge.htm
Tip: If you invest in hedge funds through a fund of hedge funds, you will pay two layers of fees: the fees of the fund of hedge funds and the fees charged by the underlying hedge funds.
Let's create a hedge fund that invests in funds of hedge funds' managers. I can almost feel the fees rolling in! Why stop there though. Let's form a hundred similar funds and roll them into a super fund. We could call it...
A Fund of Funds of Hedge Funds' Managers Fund
Meanwhile, CNBC has a fascinating poll today. I paraphrase from memory.
At what price will oil peak?
$150
$200
Already peaked
I'd feel a lot better about "peak price" theory if infinity would have at least been entertained as an option. It would show me that at least somebody out there understands monetary printing press theory. You will note that the poll does not include a time frame.
Inflation is "expected" to run at ~2.5% per year. Even if oil is in a bubble and it pops, the price of oil will still most likely be higher in several thousand years.
Similarly, peak gold price theory worked great for me in 2006. The parabola crashed and I got out before it did. Two years later the price of gold is much higher than when I sold it though. Go figure. Behold the power of inflation.
I clearly need to figure out a way to die early (so my nest egg doesn't run out). The current plan of watching the economy die early might be good enough though. Misery loves companies.
MAB,
Awesome opportunity for a hedge fund betting with other peoples money.
Either your "awesome opportunity" sarcasm was too subtle or you have amazing predictive powers. Perhaps both! I'm just now catching up on some of the news.
Bear Stearns Defendants Showed Disregard for E-Mail Risks
http://www.bloomberg.com/apps/news?pid=20601087&sid=aFCLTwIuFqM4&refer=home
In March 2007, Cioffi urged a Bear Stearns broker to put more money in the funds, telling him it was an ``awesome opportunity,'' according to the indictment. The broker agreed, said Tannin, who later that month bragged in an e-mail that he had successfully lured more money into the funds, prosecutors alleged.
``Believe it or not -- I've been able to convince people to add more money,'' Tannin said in an e-mail, according to the indictment.
Stag,
...or you have amazing predictive powers.
I don't have amazing predictive powers. I'm not bulimic and therefore can't read minds either.
http://www.youtube.com/watch?v=SH7WdkJm3H0
Perhaps the world is just chock full of Derek Zoolanders.
MAB,
We can't all be Derek Zoolanders. 2001 would have been a great time to invest in precious commodities and gasoline in anticipation of the horrible tragedy.
If there is anything that this horrible tragedy can teach us, it's that a male model's life is a precious, precious commodity. Just because we have chiselled abs and stunning features, it doesn't mean that we too can't not die in a freak gasoline fight accident. - Derek Zoolander, 2001
http://en.wikiquote.org/wiki/Zoolander
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