TPS

voter purge

The run up in prices coincides precisely when HFs and IBs started pouring billions into futures. Their "anslysts" were yapping up the probablility of $200 prices to get more suckers in. As I said last June/July, we'd probably see it unwind within 6 months, and one of the reasons I gave was because Americans would adjust behavior based upon $4/gal gas. Now a recession. Demand is playing a role, but I believe that it was speculation that drove 50-60% of the price increase; you disagree. It's not like you haven't been wrong lately... Btw, just finished a conversation with a friend who manages a HF, and he told me about a very recent conference call with other managers, and one of the things they talked about was "unwinding their oil positions..."

Pop goes the speculative oil bubble!

It's defined by the number of employees--500 or less.

I am sure they learned from the previous administration... Ohio 2004

You ain't kiddin'. The country can't take another 8 years of their policies...

No one knows what the cost of the payout will be for sure. The "big fellas" now have access to the Fed, so they'll be fine. It's the HFs and insurance companies that may go under from this. It's my understanding that the obligations must be paid October 21.

Haven't you guys figured out that total federal revenues include SS taxes? The government doesn't keep it in a lock box, it uses it like general revenue. But, hey, we all know that you guys are the party that wants to foment class warfare... Btw, since the last update of that graph was 9/21, it doesn't include the bailout.

I thought you were going to say, "is also a Goldman Sachs hack..."

I'd agree. While the Lehman CDS settled Friday, the payouts will occur over the next several weeks. Anyone who has access to the Fed shouldn't have a problem, so watch out for a few hedge funds and insurance companies.

Oil is down for several reasons. Here's my list: - $4/gal gas changed habits and reduced demand. - the slowing US economy has reduced demand, and now a slowing global economy. - The acceleration of the financial crisis had speculators (IBs and HFs) unwinding their positions in a scramble to increase capital. - And, one of the strategies used by speculators was to go long on oil and short on the $, so that any fall in the $ was an impetus to take more long positions in oil (the argument made was that the $ would fall on increased inflation, and oil was the hedge). The financial crisis has caused a "flight to the $", so the $ strengthening has reversed the effect. Once we get passed this crisis, speculators in commodity futures need to be reined in. Not saying speculators need to be eliminated, rather like the regulated exchanges, there need to be limits on the quantity of contracts they can buy. If HFs and others want to "invest" in commodities, they should purchase the stock of such firms, not try to use the futures markets as a short-term profit machine.

Good point. Are the IBs raising the margin requirements to generate more capital for themselves for fear of their own demise, or to protect against the demise of the HFs? Ironically, their behavior may bring about what they are trying to protect against--the failure of both parties!

Here's an interesting bit of news on what may be driving some of the selling: margin calls If so, it's not just panic herd mentality driving this.

I would say absolutely to this if you mean by "empire" the US will no longer try to be the world's cop and unilaterally push policies on the rest of the world too. We can't afford $650 billion defense budgets in order to support an empire. As SNation pointed out, we have an economy that was essentially propped up by non-real factors--finance and real estate (with the healthcare industry as the only other main driver of jobs). Throw in the anger being created in the political arena, and it makes for some difficult times indeed. Will this create an opportunity for US? Is it possible for US to refocus the economic model from unlimited consumption desires (toys) to sustainable growth? I can imagine a world where the US takes the lead on alternative energy development, building liveable cities, spending more on research to cure cancer than to create wmds, etc. But I don't see the leadership, nor am I certain that a majority of the American people would support this type of change. Which raises an interesting question: for the most part, like the US itself, there is a sharp divide between the right and left here at PPP; is it possible to come up with a set of economic development goals that the majority of us here would support? Then, could the American people actually effectuate change? I think the bailout bill showed it's possible to get people riled up enough to get involved, but I don't know if an economic plan could be crafted that would motivate people to do so. Ok, time to get a beer and stop my idealistic thoughts...

I certainly am not going to attack one of Bill the Cat's supporters!!

And which politician are you talking about?

This is essentially what Spitzer said in his editorial in Washington Post last March (?).

As I said, Paulson should be keel-hauled, especially if he let his bias influence the decision.

The world markets tanked last night and the futures are indicating another blood bath today. Articles/blogs I've been reading this week suggest much of the turmoil has been due to the anxiety over today's settlement of Lehman's cds contracts. One estimate shows the sellers of the insurance might have to payout $400 billion, and many of the sellers were banks. It's been argued that the reason the interbank loan market has frozen is due to 1) banks are hoarding their cash to meet their obligations; and 2) no one knows who the losers will be, and the losers might be taken down because of this. There are two scenarios: one, the settlement goes well, the obligations are less than expected, and no one is taken down--the markets would react positively; two, the opposite, and all hell breaks loose. I'm going to be at a bar with some scotch and beer as the market closes....

Tomorrow will be interesting too. The cds contracts on Lehman will be settled. A few bloggers have speculated this is what has the market on edge. Very likely a couple more institutions are taken down because of the losses here.

Read the first page of the thread I started on futures speculation last may: futures speculation

As I posted, the bailout was supposed to assuage the fears of the markets (financial markets), but didn't. I said nothing related to what you said I think.

It's a better option than what they previously touted and something I mentioned in one of the discussions about the bailout. Supposedly, "we are the government." It creates a greater likelihood of a "return on our investment" of $700 billion. When we're through this mess in a few years, the government can sell its equity stake--by low, sell high!

the markets obviously think it sucks. For those who supported it and essentially called the average American idiots for not supporting it, why didn't it have any positive impact on the markets?

Christ, you must be drunk from all of your distilling! And I am surprised the "cognoscenti" here bought into this one--ok I'm not, it fits right into what the right believes. This idiot--you finknotaclue--is taking averages and making generalizations. The 11%...what is the average income of the 11%? Of course they pay more in taxes than the average amount that they "consume" in government services--they take in 50% of the income!!! Example: Two different people--Warren Buffet and you. He's got billions of $s worth of assets, and you, well who knows, but let's assume $100K. Should Warren pay the same $20K to the government to protect his assets as you? Who has more to lose? Think of it as insurance. Would you pay the same amount to insure your $100K vs. Warren's $1 billion? If you have more to lose, you damn well better be paying more to "insure against the loss of your assets." And could you please explain what the hell you mean by "the price of higher taxes for more spending programs"?