TPS

The point is that SS will not be broke. No where in that article did it say that it's actually a funding short fall, which it will be 25 years into the future. This spin is being pushed in order to get the masses to accept cuts NOW! Which is absolutely idiotic. But the dopes will swallow it. Medicare is a serious problem which needs to be resolved. As far as getting one's money out of SS, that depends on how long you live! If you live long enough, you will take out more than you ever put in. The total you put into it is irrelevant to the total you take out (other than qualifying you for a certain monthly payment)! So your statement about getting F'ed out of 20% of your money just shows your ignorance, especially when you try to tie it to one's politics. Yeah, it's my liberal philosophy.... SS is a pay-as-you-go system. Our SS taxes support current retirees, not our future benefits, which is why it's idiotic to have someone tell you/us that we need to raise taxes (or cut benefits) NOW in order to support future retirees.

That's hilarious coming from Fox news! Pot meet kettle... So I suppose the headline topic was meant to grab attention so we'd read the propaganda?

The dichotomy between financial traders and commercial: FTimes

Holy crap! It's gonna be broke in 25 years?!? Well, not quite broke, it just won't be able to meet 100% of its obligations based on today's projections. You'll still get 80% of your benefits if no changes are made.

I agree they have a direct impact via the new issues. Everytime the APs want more units to sell, they buy an allotment from USO, which means USO has to buy more contracts. That has been my contention day one. The disagreement I have is that the secondary trades of existing shares on NYSE Arca does not influence futures prices. It's the same as a share of stock. An increase in the value of a company's stock does not change the value of its assets. New issues of stock used to finance more assets does. Read the prospectus shmo.

It's obvious someone doesn't know how the USO ETF works... The managers of the fund sell allotments of 100,000 units (the initial offering prices was $50) to big banks and brokerage houses (known as authorized purchasers--APs), who in turn sell these shares to other investors, including retail investors. The managers of USO use the funds raised from the APs to buy futures contracts on oil, but will also buy other oil-related investments--swaps and options. The ETF shares sold by the APs to retail investors trade on NYSE Arca like any secondary market. It is no different than selling a share of stock--I'm selling to another invetor, hence NO impact on futures contracts. The value of the ETF will obviously be related to the NAV of the underlying futures contracts. It may trade above NAV, it may trade below. All of that buying and selling of existing ETF shares has NO impact on the underlying futures! It's the other way around--the changing value of futures prices changes NAV of USO and therefore the ETF price. Now since you claim to have traded futures, I assume you understand that the USO fund only has to put up the margin on the futures investments, not the actual value. This means the majority of the funds raised by USO are invested in treasuries. Only about 10% of USO assets goes to meeting margin, the rest is in treasuries. This is why a change in margin has no impact on futures contracts that make up ETF investments. Read the prospectus. That said, USO will/does sell more allotments when the APs want more shares to sell to retail investors, and USO then buys more futures contracts. It is also possible for an AP to redeem an allotment of 100,000 units, which means the fund will reduce the number of contracts it buys. This happens about as regularly as corporations issue or buy back stock. Otherwise, the existing 45.3 million units outstanding trade just like any other stock. You are wrong.

Going in and out of ETFs has no impact on the futures contracts that make up its value. REtail investors buy and sell the ETF which is independent of the underlying contracts. Margin has no impact on the number of futures contracts in the USO ETF. In fact, the majority of funds that the ETF raises via its offering is invested in money market instruments and other relatively short treasuries because of margin. The USO fund sells shares based on the total value of the contracts, yet the fund only puts up 6-8% of the capital to meet the margin requirement. Do you really think the movements in commodities, especially oil, in the past week (today!!) are based on fundamentals? I hope everyone continues to use alternatives to driving and filling gas tanks so these mo-fos lose their shirts. Demand is falling; suppliers are cutting production. The Saudis initially increased supply because of Libya, then cut back because no one was buying. Investment flows are distorting futures markets and therefore spot prices. The futures markets now function like casinos, not markets for hedgers. All it would take is for the Fed to raise rates by 25 bps and oil would drop another $15, but they have masters too...

I don't think it's a fair comparison to say that a margin change in oil should have the same effect as it had in silver. I would agree that $100 is closer to "a fair price" than $112.... Once again, a change in margin won't shake out futures contracts tied to ETfs.

Some more facts... 1. Futures markets are more volatile now. Last week's drop exceeded the value on margin. The exchange is looking for a little more protection. 2. With a fixed margin amount, as the value of contracts increases because price is increasing, the margin as a % of value decreases--creating more leverage for all traders. So, when margin was $6,750/contract and oil was $80/ barrel, margin was 8.44% of the total value of a wti contract (1,000 barrels per). With oil at $100, the old margin as a % of value fell to 6.75%. The new margin value raises the % cost back to 8.44% with a $100 price. 3. Don't confuse speculators with investors. My argument is that new instruments (ETFs) have increased the demand for futures contracts that make up the value of the ETF. The USO ETF isn't going to leave the futures market--margin has almost no impact on the demand for ETF futures-related investments. These are passively managed funds. The managers are required to buy a set number of contracts. Margin has a slight impact on the ETF's return. ETFs and swaps are where the demand for futures contracts is being driven, not your so-called traditional speculators who directly participate in the futures markets. 4. The majority of the players in oil now are big banks, pension funds, hedge funds, and I think they have sufficient capital for the additional margin. The days of the individual futures trader speculating and/or making market postions is over. The market has changed since you traded, in case you didn't notice.

Just spin it... got to love this one: if the banks are causing high commodity prices, then they need to do a better marketing job to the public so as not to get blame....

While there are a lot of disagreements here at PPP, I think there was broad agreement that QE2 wasn't going to impact the economy much. Unless there was some other unstated goal they were trying to achieve, it was a bad idea.

This is a good piece trying to discern what happened last week. oil prices

I think you're right on JtSP. On O, recall also, the last few games there were no-names at WR. They lost everyone but Johnson. Hopefully Easely is in the mix this year too--I expect big things from him. On D, the Dareus pick alone creates a significant improvement. The Pats said they focused on taking out KWilliams; now they can't. In addition, Dareus will free up the OLB so he'll be 1-on-1. On the negative side, there will be growing pains with a very young D.

Doc, There is a negative relationship between the $ and oil now (it used to be positive--pre 2000/1). I can imagine program traders have investment programs that move when the dollar moves. If that's the case, are they also programmed to make the reverse move? While the usual causality runs from $ to oil, maybe this time the steep drop in oil (and other commodities) drove the $ up? I looked at that relation yesterday too. Commodities and oil were trending down all week, the $ wobbled all week (without trend) until yesterday's crash.

It's a combination of this and what Rob said. Raise the price because I can (lots of news about higher oil prices), but also because I'm going to need more cash to replace inventory, so I can pay for it without having to borrow. I lower prices only after I sell off the expensive inventory, and I make more money because my replacement costs are lower. Prices tend to be flexible up but sticky down.

According to this link: In my view, the "commodity bubble" (not just oil) got started last fall, further fueled by QE2 in November. For Oil, it was pumped up by MENA activity to get the retail dopes in for the final push... It was a sector bubble, not just oil, hence the across-the-board drop/pop. Bloomberg

Yeah baby! $99.80. Conversation with myself...

I'm projecting that Nix trades down to the Pats for the 27 picks (or so) they have next year...

Well, that didn't take long... Wonder if crude will crack the $100 barrier today?

Because someone like Belichek would've picked him and picked his brain.

I think Moats benefits the most from Dareus. He only played about half the games at OLB and still had pretty decent stats for a rookie, from a small school, learning a new position, after initially being tested at ILB.

I think most of them are described as hard working, high character too--much like last year's crop.

This is pretty good from his Coach: Davis on Searcy and White

You need to have some credibility in order to lose it....

It's the CFTC commission members. Chilton is the only one fighting for strict limits. You mean, "how long can a bubble last?" This one started a little over a year ago. I think we're getting close to the tipping point--look for a serious correction in oil this month. Also, what I have said is that the investment demand is the main driver now, that does not mean there is no influence from "fundamental" underlying demand. My contention is that if you removed the influence from the investment flows, then prices would mainly reflect the STEADY growing demand from emerging markets, and we would not see the rapid spikes and volatility. Take a look at the most recent trade data. Oil imports are at a 12 year low (in barrels, not dollars). Demand in the US is falling and inventories are maxed out. So you really believe the current price is "market clearing"? This piece suggests the fundamental price should be $75-85 and that the CFTC has basically turned a blind eye... seeking alpha