Tuesday, June 24, 2008

Speculation is not a Dirty Word

For all my rants against beefers (aka big, evil funds) and oil market speculators, I want to make it explicit that speculation is neither a dirty word nor a dirty business. Everyone should be free to speculate to the extent of his or her desire. That's what freedom means and clearly, being a populist libertarism, you expect that from me. But ...

But that means as a person ... not a giant pool of big money. Human freedom is to be exalted, but not groups of big money pools. Those need to be regulated and / or prohibited from trashing markets necessary for price discovery, and overwhelming natural hedgers by their sheer size and thus manipulating prices higher in the same manner as the old "corners" on markets.

And the rich pour money into these pools in the search for "excess returns" and "stable returns". Do they invest in a new oil field ? Or a new mine ? Or in new discoveries ? No. They pour money into financial products and beefers who act as their vikings to loot more plunder in trading pools. The rich should just find a good broker to pick some stocks and private investments in new mines, oil, or ventures. This layer of beefers needs to be heavily regulated.

Populist libertarianism is a two word concept. The "populist" part means that the big pools of money, the ruling classes, must be limited in their ability to raid the common man.

71 comments:

Bud said...

" The rich should just find a good broker to pick some stocks and private investments in new mines, oil, or ventures. "


give me a f'ng break !!!


populist libertarian my ass


vladimir lenin and mao tse-tung wud be proud of the Bman

Bunkerman said...

lol Bud. Rape & pillage forever !

Bunkerman said...

hmmm ... analogies: one viking is not a problem .. a boatload is.

mern said...

MIDLAND, Mich., June 24 /PRNewswire-FirstCall/ -- The Dow Chemical Company (NYSE: DOW - News) will raise the price of its products by as much as an additional 25 percent in July in an effort to offset the continuing relentless rise in the cost of energy and hydrocarbon feedstocks.


still not stagflation?

Gm to raise prices, lower production.

still not stagflation?

funny at the office yesterday a group of 10, in the kitchen, all bitching about the economy and how bad this recession is.

shud i have told them we r not in a recession and inflation is within a comfort zone?

that wud have been worse than burpgate

mern said...

working out watching babblevision.

coming up.

speculation and oil

fwiw

Bunkerman said...

that's just making adjustments due to a high cost raw material.

not "inflation".

mfl59 said...

mern get off the treadmill/elliptical sir....time for some real workouts....


www.crossfit.com

mern said...

bman, can i buy some pot from you?

perhaps in your bunker you invented some new strang. whatever it is, i want some!

Bud said...

sometimes i wonder wether the Bman really went to MIT

he sounds more like a graduate of the South Harmon Institute of Technology......aka....S.H.I.T.


PS......what movie was that school from? no googling.....i doubt any of you have seen it

mern said...

DOW raises prices 45% in 2 months, and its not inflation?

art cashin was just saying we have not seen inflation like this since spain starting bring in tons of gold from the west.

i am going to have to goog that info for dates but i doubt it is within the last 200 yrs.

then he said he expects to test the lows and break em.

Repub senator(maine) collins totally agress with you on the speculators. need to goog her too, but either she had a stroke or just cant speak the language well. even if i agree (which i sorta do), WE STILL NEED THIS. these idiots in the govt will never get off their fat asses until it is a "CRISIS". we will never get nuclear where it needs to go unless prices stay up here and go higher.

the ceo of DOW, who i wud listen to over anyone in DC, says the demand is simply too great from the crib country's and energy prices are going higher.

i hope and pray we hold these lows, becuase if we dont, mr dimon gonna start making cuts fast. id probably be the first to go, in tampa.

lotta people talking about oil being at a top and it was on the cover of barrons. Stagflation seems to remian a 4 letter word very few people are willing to use.

d'oh

Spin-em said...

Accepted?.....cheezola movie

Spin-em said...

still better than Dirty Rotten Scoundrels.looool

Bud said...

yes Accepted.........average flic

but i liked the name of the school

mfl59 said...

is this a recession?

mfl59 said...

no worries....Greenspan and Paulson say the economy is fine/housing is bottoming/mkt is cheap....

mfl59 said...

whats up now mern?

mern said...

inflation

;-)

maverick said...

Starting this next month mfl.

http://www.t-nation.com/readTopic.do?id=632710

http://www.staleytrainingprograms.com/products/edt-dvd/edt-video.htm

http://www.youtube.com/watch?v=TluJFiyiflY

Frosty said...

first AL pitcher grand slam in 37 years...willie would have given up the four ball free pass...20 game set with the metropolitans and the west is won.

mfl59 said...

the metropolitans have quit in june...really sad to watch....

die yankees die

Bunkerman said...

odd comment by Cashin ... inflation was at least triple this in the 1979-1980- period.

mfl59 said...

mav that guy is no joke....i think his work is the basis for crossfit...

i puked all over the basement after the thrusters/pullup workout last week...

mern said...

he was talking about world wide inflation not just america.

he even went further saying that when spain broght back the gold the inflation did not spread to china and other parts of the world, like this time.

maverick said...

EDT training is great and will produce results but crossfit will kick your arse and buckets are necessary.

maverick said...

check out these petite hard bodies doing 13 solid minutes of ass kickin

http://www.youtube.com/watch?v=iavq_y20thc

Spin-em said...

"Would you look at the ass on that.....Yeah...He must work out"

mfl59 said...

Cashin hasnt been bullish since the Panic of 1907....

mern said...

mfl, nice work ethic. im jealous.

i sometimes workout until i puke but that is becuase of my asthma.

maybe i am ready to try some HGH.

anyone got the number of revys doc?

what am i supposed to say?

hey doc, im too lazy to eat right and exercise but i want the abs of an 8 yr old boy?

or i desparetely want to make love to a school boy?

i mean really, who wants to meet at a bar at 10am?

well i just figured frosty was a raging alcoholic.

pass the elax

lol

MAN I PRAY THAT WAS DA BOTTOM!

Frosty said...

good to see the real buyers at work today...scooping up value by the truck load...Bunky must be busy backing up the half track today.

8 yr old abs to match the bald sack indeed sir.

maverick said...

I see mern trying to increase my tnnk fees to 7k

maverick said...

tank

Spin-em said...

pass the ice cubes sir.......

Bunkerman said...

no recession ... slow growth ... low inflation ... painful adjustments due to high energy costs ... weather failures.

that's it.

Hmmm was in line at McD to buy my bacon ranch salad with grilled chicken & a couple snack wraps with grilled chicken [@$1.39 !) ... two 11 year old kids ahead of me ... both have cell phones.

some recession ... kids with cell phones in a small town. sheesh.

Frosty said...

agreed...not much has changed...GE is trading where was 14 yrs ago...inflation, pppfffttt.

Bud said...

'kids with cellphones'


huh?????


what's wrong with you Bman?? cellphones to kids today is like.....well......baseball cards when i went to school......sheeeeeeeeeeeeeeeeh



PS......frosty used to collect dolls when he was 8 years old

Bud said...

mav these guys are just bitter and upset that they couldn't make money in the tank

it works for me ....and i suspect you too


'ops expo'

pffffffffffffffffffffffft

Bunkerman said...

uh ... frosty ... the beefers control all the money ... that has changed. All money in trading funds ... little "real" investment

so it's chop-city endlessly as they stomp in the mud

mfl59 said...

Bud dont forget...the reverend likes extra starch...

mfl59 said...

Bunkerman could you please define the term "real buyers"....thanks

Bud said...

'xtra starch'


lmaooooooooooooooooooooooooooo

Bud said...

the reverend is one of the most aatute market watchers i know of

mfl59 said...

lmaoooo exactly....a lot of watching....not much action....

Bunkerman said...

a real buyer holds the shares more that a few days-weeks-months. Non-real buyers or non-real sellers are virtual buyers and sellers who create chop and wild swings and the lunacy we've experienced for a while.

when all the rich dump money into beefer trading funds, the market can't go anywhere as they are all virtual.

the analogy is a actual particle like an electron versus a electron positron pair created out of the vaccuum field that soon annihilate. The virtual particles create a choppy, foamy soup that if intense enough, caused major distortion fields.

I think I defined this before.

mfl59 said...

how can one tell if the buying is real or virtual?

Bud said...

mfl with the 76mph fastball......and the Bman popped it up

Bunkerman said...

it's tough ... but dip buying is always possible real buyers.

but sometimes it's just short covering.

I suspect baiting ... but swing anyway.

mfl59 said...

no baiting...that was a real question....

there are those who believe "beefers" dont even exist

Bunkerman said...

true, some do not think market manipulation exists, nor window dress, option pinning, etc.

Of course some believe the earth is 6000 years old, too. Some creationists believe in human-caused global warming, too.

[hehe I proved that a few months ago]

Bunkerman said...

dip buying in a credible trend is usually real.

mern said...

actaully bud. i left the tank becuase i cudnt stand the consistent facist remarks from revy.

plus u knew i was pretty over it well before i quit trading.

i made decent money in there, but i noticed my best ideas come from me and not really in there.

but pretty much by the time i joined that place, my swing was like david duval, and i was like george carlin early sunday. i was dead, but i didnt know it yet.

agree with bud, 11 yr olds with cell phones is like me having 50,000 baseball cards and my matchbox cars.

land lines r taking a dirt nap, and the cell plans provided to the consumers famalies r probably much much cheaper, when adjusted for inflation, that say a basic wire line 10 yrs.

i do not see how focusing on one of the small areas of deflation or disinflation trumps companys like DOW, MO, KFT etc etc etc raises prices like never before, but i only went to dayton.

like georgey boy says: "its only inflation if you believe it is inflation"

or was that about lying?

im busy today and dont have time to focus on gud banter

;-)

mfl59 said...

does jeremy grantham read this blog?

In 5 years I expect that at least one major "bank" (broadly defined) will have failed and that up to half the hedge funds and a substantially percentage of the private equity firms in existence today will have simply ceased to exist". -- Jeremy Grantham, July 2007

mern said...

that up to half the hedge funds and a substantially percentage of the private equity firms in existence today will have simply ceased to exist".



there goes my dream of doing (basically) nothing.

DAMN!

mern said...

if this was a mid cycle slowdown, no way we shud be retesting the MLK lows.

whats cramer cackling these days?

the fed know nothing but we gonna close at 15k before yr end?

opps that was last yr at this time.

mfl59 said...

guess those werent real buyers today, going by the definition...

mfl59 said...

Jim Bianco does not read this blog

"the Fed needs to tighten aggressively to combat out of control inflation"

Bunkerman said...

Beefers can make this market go anywhere they wish. Trillions in trading funds make Ms. Market dance any tune they wish.

Like oil.

Might have been real buyers in AM, but beefer shorts might want to protect their Q2 fees. It's a battle.

Bunkerman said...

Anyone saying the Fed should tighten is an idiot.

Gee ... let's put 5 million Americans out of work ... that should cut oil demand in China.

Really smart.

Then when that fails, they could act like Volcker and put another 5 million out of work.

Sheesh.

Monetary base has almost zero growth and that idiot blames the Fed for "inflation".

fFool.

Bunkerman said...

the the libertarian fools want to let the pension funds buy all the free oil supply in the world ... and drive up headline CPI ... which increases their pension liabilities. Really smart !NOT

Bunkerman said...

Pisani: "traders have the attention span of gnats" lolol

he must read this blog.

It's all trading ... who buys a stock to hold awhile except Bman.

Bud said...

"beefer shorts might want to protect their Q2 fees"


huh?????



what about the beefer longs???


sheeeeeeeeeeeeeeesh

Frosty said...

bond market all already rasied rates...Bunky you need to pay better attention.

Bunkerman said...

sheesh S&P guys re housing index says overall market is back to 2004 ... sheesh what whining !!!

Anyone who bought before 2004 is still in green ... why all this anguish ?

I had a 30% drop in my house from 1987 to 1990 .. but that number was still about 50% over my cost in 1984.

Sheesh ... does no one have a memory any more ?

mern said...

The U.S. corporate profit outlook is deteriorating rapidly, with S&P 500 earnings for the second quarter now seen falling at a double-digit pace from a year earlier, according to Thomson Reuters Proprietary Research released on Tuesday.

The Conference Board, an industry group, said its inflation expectations gauge matched the record-high 7.7 percent it hit in May, which will keep Federal Reserve policy makers concerned over price growth as they meet to decide rates on Tuesday and Wednesday.

The Conference Board said its overall monthly measure of consumers' mood declined to 50.4 this month -- the lowest since 47.3 in February 1992 -- from a revised 58.1 in May. May's reading was originally reported at 57.2.

STAGGER LEE DEFINED

agree the fed cant raise here, the structual inputs to this inflation is not the monetary base like the 70's, it is the overwhelming demand increase becuase of the crib countrys and the FAT usa.

i saw on cnn today a piece how in japan if your stomach is more than 33.6 inches, u r a fatty and your health insurance premiums for your entire company get jacked up.

NOT A BAD IDEA for the FAT americans. my waist is 32 inches and im 5'8. so in japan where most r small like me, i am almost considered FAT. but in this country when i tell people i shud weight 140 not 150 i get laffed at told im skinny.

thats total BS, becuase i can pinch more than an inch!

remember that commercial?

i think where the bman is missing this is comparing the 70's stagflation vs today's stagflation. becuase if u try and tell DOW's customers this is not inflation, they wud roll over and die of laughter.

peace

opps, war and glass!

Bunkerman said...

sheesh frosty ... 10 year UST at 4.5% is not too far from a 40 year low.

long rates need to be at 4.5% to 5% to give bondholders a 3% real return from 2% inflation !!!

Overnight money gets no real reurns as studies show.

Bunkerman said...

beefers longs are out of business.

Bunkerman said...

Conference Board: an overpaid club of CEOS. Sure, I'll listen to them. They are probably re-negotiating a fat raise.

Frosty said...

How Many Rate Hikes are Priced In?

According to the latest Fed Fund futures, there is an 88.6 percent probability that interest rates will be at 2.25 percent on September 19th and a 67 percent chance that it will be at 2.50 percent on October 29th. Although the future contracts are pricing in a near guarantee of tightening before the end of the year, there has been a lot of speculation that the futures contracts are overestimating rate hikes because traders who were banking on 1.50 or 1.75 percent interest rates have been forced to reverse their positioning.

Bunkerman said...

uh... so I was right and they were wrong before re the Fed.

And so am I to listen to the omniscient traders again ?

;-)

Fed to raise .25 when housing bottom is confirmed. So maybe .25 in fall as I expect housing bottom is now. So the traders agree with me - not other way around.

;-)

mern said...

the fed wud be insane to raise rates.

even though cashin was pointing out how several central banks r tightening and other r not, and they better get on the same page or 87 mite happen again.

there r a lot of angels dancing on the pin of inflation but the fed is not one of them currently.

now wud we be here if alan didnt take us to 1% to fight deflation?

NO WAY!

Frosty said...

Bunky...so you are calling a bottom...no you did call a bottom...please post the buy list in the morning.

Frosty said...

I knew your were set for the fast ball...dug in, gripping the bat...nasty hook indeed.