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Remove excessive speculation from food and energy commodities
September 23 active ingredient cialis, 2008
Dear President Bush and Members of Congress:
We are writing to you today to draw your attention to a deeply disturbing phenomenon in the commodities futures markets and to enlist your aid in solving this grave crisis.
Many experts at recent Congressional hearings have testified that institutional investors have poured hundreds of billions of dollars into the commodities futures markets, driving up food and energy prices to historic levels.
Half of all the people in the world (more than three billion souls) subsist on less than $2 a day.In normal times active ingredient cialis, they are forced to spend half of that amount to feed themselves and their children. Active ingredient cialis: today, the actions of institutional investors have contributed to a doubling or tripling of food prices. Active ingredient cialis: as a result, many of the world’s poor can no longer afford the food that they need to survive.The lives of millions of people have been endangered and Wall Street is partially to blame.
Commodity futures prices have come down in recent weeks – active ingredient cialis. Active ingredient cialis: nevertheless, the regulatory loopholes that undermine the intent of the Commodity Exchange Act remain open, ready to re-introduce extreme market volatility, political instability and much human suffering, while primarily benefitting a few dozen corporations and investment banks who “win” whether prices rise or fall.
The World Food Programme estimates that 100 million people will face starvation as a result of the recent jump in food prices.This is a global crisis of unprecedented proportions.
Many of our organizations are working hard, here in the U.S – active ingredient cialis.and around the world, to help those who are poor and malnourished; active ingredient cialis.The number of people who are suffering the impacts of this crisis is growing exponentially; active ingredient cialis.We have worked with these people for years to find ways for them to improve their lives and livelihoods.Sadly, because of skyrocketing food prices, the steady progress they have made is being wiped out; active ingredient cialis.It is agonizing for our organizations to witness this dire situation in which their need increasingly exceeds our ability to help; active ingredient cialis. Active ingredient cialis: our donors are also hurting financially as a result of the dramatic increases in food and energy prices.Our financial resources simply cannot keep pace with the critical shortage of food supplies in an ever-increasing number of communities worldwide.
We are not asking for financial support; active ingredient cialis.We are asking for justice.
Food is not a speculative investment. The artificial demand that has been created by investors’ rampant speculation in commodities futures has put tremendous upward price pressure on food and energy commodities.Never before have institutional investors made allocations of this magnitude to commodity indices.How has this happened? The Commodities Futures Trading Commission (CFTC) active ingredient cialis, which is responsible for regulating agricultural commodities and enforcing speculative position limits, has opened the door for Wall Street banks to speculate in agricultural futures contracts in essentially unlimited quantities.
Every day, in the U.S.and around the world, we see the faces of millions who are suffering, even starving, as a result of these investors’ actions. Active ingredient cialis: will you please help them by compelling the CFTC to close trading loopholes and enforce speculative position limits in energy AND food commodities markets?
The actions of Wall Street should not be allowed to trample human rights and dignity.
Signed:
ActionAid USA
Africa-Europe Faith & Justice Network (AEFJN)
Afrika-Europa Netwerk, Netherlands
Agribusiness Accountability Initiative
Agricultural Missions, Inc.
Bay Area Community Services
Biblical Formation by the Missionaries of Africa in Jerusalem
Caney Fork Headwaters Association
Center of Concern
Claretian Missionaries
Columban Central JPIC coordinator
Columban Justice, Peace, and Integrity of Creation Office
Cumberland Countians for Peace & Justice
Daughters of the Sacred Heart
Farmworker Association of Florida
Fellowship of Reconciliation-USA
Food First/Institute for Food and Development Policy
Food & Water Watch
Foreign Policy in Focus
Global Exchange
Greater Grand Rapids Food Systems Council
Heifer International
Institute of the Blessed Virgin Mary
Justice, Peace and Integrity of Creation Commission of the Union of Superiors General of men and women religious congregations (USG/UISG)
Justice, Peace and the Integrity of Creation Committee, Eastern Province USA of the Claretian Missionaries
Labor Council for Latin American Advancement
Maryknoll Office for Global Concerns
National Catholic Rural Life Conference
National Family Farm Coalition
NETWORK: A National Catholic Social Justice Lobby
Network for Environmental & Economic Responsibility, United Church of Christ
Nicaragua Network
Oklahoma Black Historical Research Project
Office of Peace and Justice, Sisters of Charity of New York
Organic Consumers Association
Partners In Health
Pax Christi International
PaxWorks
Pesticide Action Network North America
Quixote Center
Red África Europa Fe – Justicia (Africa Europe Faith and Justice Network)
Red Ambiental Loretana – Peruvian Amazon
Religious of the Sacred Heart of Mary
Rural Advancement Fund
Rural Coalition
Federation of Southern Cooperatives/Land Assistance Fund
SHARE Foundation: Building a New El Salvador Today
Sisters of Charity Federation
Sisters of Notre Dame de Namur Justice and Peace Network
Small Planet Institute
Society of Missionaries of Africa
Southeastern North Carolina Food Systems Program
Staff 8th Day Center for Justice
Sustainable Agriculture of Louisville
The Congregation of Holy Cross
The International Presentation Association of the Sisters of the Presentation
The Oakland Institute
The Order of the Servants of the Sick (Camillians)
UNANIMA International
United Methodist Church, General Board of Church and Society
Washington Fair Trade Coalition
World Hunger Year
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“Morgan Stanley and Goldman, both based in New York, can retain non-financial assets such as commodities or equity holdings for at least two years; buy cheap cialis.They are also entitled to three one-year extensions.
The change of status “will have no impact on our commodities business,” Michael Duvally, a New York-based spokesman for Goldman, said by phone.” Click for Article
- Morgan Stanley Will Seek Further Fed Exemption in Commodities
- Chanyaporn Chanjaroen
- Bloomberg
- September 24, 2008
So apparently when Goldman Sachs and Morgan Stanley both agreed this week to become bank holding companies and therefore regulated by the Federal Reserve one of the deals they struck was that they could automatically hold onto their commodities businesses (both derivatives and physical trading) for at least 5 years.
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“For all the talk of OPEC, the biggest threat to high oil prices in the short term might be the implosion of Morgan Stanley or Goldman Sachs, which would trigger a massive number of low-priced oil-futures contracts to flood the market all at once in search of buyers to liquidate those contracts.
“If either of these entities were to collapse, we believe the downside for commodities would be tremendous as these companies unwind positions,” Valerie Wood, president and owner of Energy Solutions, told Platts on Monday; buying generic cialis.”In particular, we know Goldman Sachs has large investments in crude oil and natural gas commodities because its own Goldman Sachs Commodity Index fund [comprises] about 39% crude oil commodities and about 6% natural gas commodities – buying generic cialis.A liquidation of GSCI shares would directly result in the selling of these commodities, and selling pushes prices lower.” Click for Article
- Bailing Out The Oil Market
- William Pentland
- Forbes
- September 23, 2008
Very astute article that covers all the bases in the debate. Bottom line is that an end to Index Speculation will bring artifically inflated prices in all commodities back to reasonable levels. In the meantime the protection by the Federal government of Index Speculators keeps prices high. Over and over we see the government at all levels and in both parties choosing Wall Street over Main Street; buying generic cialis.
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First it is important to note that we as a country are about to spend more money bailing out the millionaires on Wall Street (who made huge bets with borrowed money) than we have spent on the entire Iraq War!! We have had a long and vigorous debate on Iraq and now Bush, Paulson, Bernanke, Cox, Lukken and others want to take $3,000 out of every man, woman and child’s pocket to give it to Goldman Sachs, Morgan Stanley, AIG, Lehman, Merrill, et cetera so that they can unload the toxic waste they created and walk away. (Don’t forget that Lehman has set aside $2.5 billion to pay multi-million dollar bonuses to its top people.)
“Watching the price of oil has been enough to give anyone — consumers, traders, policymakers — economic whiplash; cialis consultation.From a July 11 peak of $147, prices slid by nearly 40 percent over two months before bouncing much of the way back in the past week.
The leap in the October crude oil contract — which ranged from $103 to $130 yesterday alone — ignited new calls for tougher government oversight of commodities markets, in which financial firms and investors have played a bigger and bigger role” Click for Article.
- Oil’s Wild Ride
- Steven Mufson
- Washington Post
- September 23, 2008
“`I know for a fact that some members of Congress are working to include speculation legislation in the financial markets legislation,” CFTC Commissioner Bart Chilton said yesterday in an e-mail.“ Cialis consultation: those efforts, I think, may get fueled by the large spike in oil prices.” Click for Article.
- Oil Short Squeeze Prompts Call to Curtail Speculators (Update1)
- Tina Seeley
- Bloomberg
- September 23, 2008
Now what is the one thing that every American would like to see happen ASAP – lower gasoline prices. What is the one thing that the world’s poor would like to see happen ASAP – lower food prices.
Watching WTI Crude Oil prices gyrate insanely yesterday it is obvious to every observer that financial players control this market and that forcing Index Speculators out of these markets would bring prices down right away. This could be easily accomplished by the Senate passing H.R.6604 which would re-regulate commodities futures and OTC swaps – cialis consultation.
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“Very quietly compared to all the noise about the big bailout proposal from the US Government and the other move for the Fed to offer a lifeline to struggling mutual cash management funds, new steps to relieve distressed commodities markets were launched Friday by US regulators after Lehman and AIG woes triggered a wave of selling and emergency actions by exchanges earlier in the week.” Click for Article
- Commods: US government help for easing trading strains
- Australasian Investment Review
- September 22, 2008
The CFTC wants to make sure that Lehman and AIG don’t have to sell their commodities futures contracts which would result in them (and other longs on Wall Street) losing money. So rather than the beginning of last week when Crude Oil had it’s largest two day decline in years. Instead we’ve got the last 3 days of the week where Crude Oil has had it’s largest three day increase in years.
Four thoughts spring to mind:
(1) Hasn’t the CFTC been telling us that commodities futures prices are strictly determined by supply and demand? So why do they have to take any action whatsover? Isn’t it impossible for Lehman or AIG or anyone else to make prices budge off of their supply and demand determined price?
(2) Wall Street and the CFTC’s hypocrisy concerning “free markets” is in full bloom. Let the market determine the price – why are you intervening on behalf of Wall Street banks? If the price would fall without intervention then shouldn’t the market be allowed to function and do it’s job? Like Jeffrey Frankel said “there are no atheists in foxholes and there are no libertarians in financial crises.” Wall Street wants “free markets” when it benefits them but they want a massive bailout when they bet big with borrowed money and lose their shirts.
(3) This is further evidence that if Index Speculators were forced to liquidate their positions oil would easily be $65 to $75 per barrel by the time the liquidation was complete.
(4) The American people should be so thankful that Crude Oil is now $107 per barrel instead of $90 per barrel. Thank you CFTC for protecting Wall Street at the expense of 300 million Americans.
UPDATE: WTI Crude Oil posted the largest one day gain in its history trading up $25 per barrel at one point. Apparently there was a massive short squeeze. It is highly unlikely that squeeze was physical producers or consumers so it had to come from speculators. My bet is that there were some people set up short crude in size betting that AIG or Lehman would have to unwind positions they were unable to roll or betting that Goldman or Morgan Stanley would end up on the ropes. Since the CFTC announced that whoever bought AIG or Lehman’s positions would enjoy their hedge exemptions as well, that meant the anticipated liquidation never occurred and the shorts were forced to cover.
So in preventing the crude oil market from crashing the CFTC caused it to crash up. Thanks CFTC! And thanks for lying to us for months now saying all of oil’s price moves were supply and demand. Oil is now up more in the last 3 days than it was up when Iraq invaded Kuwait! And oh by the way ALL 25 commodities in the major commodity indices were up today by an average of 3.7%! They are all reacting to the same supply and demand equation namely the supply and demand of investor money!
I would like for NYMEX to explain how all of this happened on the last day of trading where they claim there are speculative position limits in place!? And what about all the contracts for physical oil that are priced off of the contracts settlement? I guess speculators really are driving the real world price of oil.
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The same Wall Street deregulation that has led to the current financial crisis is also the
source of the recent violent volatility in the commodities futures markets; cheap generic cialis.In both cases,
through the iterative dismantling of the former banking and securities regulatory
structure, and the dismantling of the commodities futures position limits and creation of
dark markets in commodities, the end result has been chaotic moves in capital markets
and commodities markets that have caused significant stress for our economy and
American Consumers.
.
As the crisis has intensified, U.S – cheap generic cialis.Capital Markets Regulators, including the SEC, the
Treasury Department, and the Federal Reserve, have acted in the past weeks to
unilaterally change previous long standing rules and policies; cheap generic cialis.They have taken over
Fannie Mae and Freddie Mac and put it into a “conservatorship”.When AIG got into
trouble with their CDS portfolio the US government loaned AIG up to 85 billion dollars
from the taxpayer and for that service took an almost 80% stake in the company.This
morning regulators announced a plan to create an estimated 800 billion dollar RTC II
program to rid financial institutions of the toxic waste mortgage products created by Wall
Street banks in the last few years.They are going to backstop large money market
mutual funds so that these funds can continue to fund, among other things, brokerage
houses in the overnight funds market.Finally, they have announced that they are going
to the unprecedented step of banning short selling completely in financial stocks.
.
US regulators have now shown their true colors – cheap generic cialis.They are willing to destroy their “free
market” ideology when they feel it is necessary to protect the banking and brokerage
community.While one can debate the merits of their plans or the perceived necessity to
protect the “system”, what one cannot ignore is our current regulatory regime’s ability to
trounce their proclaimed ideological principles when necessary.
.
Unfortunately, this administration and the current regulators have not shown a focus to
act in a similar way to change the rules of the commodities futures markets that would
have a significant benefit to ordinary Americans.The CFTC, the commodities markets
regulator, has taken the view that more regulations are not necessary because they believe
somehow that the same “financial innovation” has not affected them – cheap generic cialis.That is false.
Commodity index swaps and expansion of dark commodities markets have severely
distorted prices for commodities around the world, and greatly amplified an upward surge
in commodities prices; cheap generic cialis.This activity has had significant deleterious affects on American
Consumers and citizens around the world – cheap generic cialis.It has led to food riots, energy dislocations,
and according to the U.N., starvation.
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What Congress and the American Public need to ask our Administration is the following
question: Why, when it comes to protecting the financial firms that dominate the capital
markets you unilaterally change longstanding rules and policies to the abandonment of
your proclaimed “free market” beliefs, yet when it comes to protecting average American
consumers and citizens of the world from excessive speculation in the commodities
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“The House today approved a bill intended to curb oil market speculation; cialis canada pharmacy.The bill is little changed from a version the Democrats tried to expedite in July, but this time it had more Republican support and passed, 283-133.” Click for Article (subscription required)
- “With Extra GOP Defections, House Passes Speculation Bill”
- Darren Goode
- Congress Daily
- September 18, 2008
Great first step in the right direction – cialis canada pharmacy.
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Andy Green, European Director of Investment Policy at Mercer, commented: “If there is an increase in the number of investors seeking to purchase commodity futures, then prices can be pushed up. This could be one of the reasons why markets have fallen into contango.” Read the whole press release HERE.
- Mercer Investment Consulting press release
- June 21, 2006
A lot of people think that commodity index speculation is a brand new phenomenon in 2008, but it has been a problem for several years now.
Back in 2006 right before the mid-term elections the Goldman Sachs Commodity Index was changed and the weight of unleaded gasoline was reduced substantially (click HERE for one article). After that Index Speculators had to sell a large number of gasoline futures contracts and the price came down substantially as a result. Goldman received a lot of criticism for attempting to influence the election. After that they sold the GSCI to S&P.
We have been looking at this phenomenon along with several others since early 2006.
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“It is hard to explain current oil prices in terms of fundamentals alone. Buy generic cialis online: the recent surge in the oil price (from US$80 to over US$100 a barrel) seems to go well beyond what would be indicated by the growth of the world economy.Producers and many analysts say it is speculative activity that is pushing up oil prices now; buy generic cialis online. Buy generic cialis online: producers in particular argue that fundamentals would yield an oil price of about US$80 a barrel, with the rest being the result of speculative activity….
In summary, it appears that speculation has played a significant role in the run-up in oil prices as the U.S – buy generic cialis online.dollar has weakened and investors have looked for a hedge in oil futures (and gold).” Click for Report
- “Regional Economic Outlook: Middle East and Central Asia”
- International Monetary Fund
- May 2008
- Pages 27-28
The number of people who believe a $50 spike followed by a $50 drop in oil is purely supply and demand is shrinking rapidly. Seems like the IMF was ahead of the curve putting out this report in May; buy generic cialis online.
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Philip McBride Johnson who heads Skadden, Arps exchange traded derivatives practice, was Chairman of the CFTC and literally wrote the book on “Derivatives Regulation.” He had the following to say in an interview with American Law Daily published on www.law.com :
What do you make of the huge increase in oil prices and the rising concern over speculation in the commodities markets these days?
The CFTC’s economists are saying that supply and demand seem to be driving this – buy cheap tadalafil uk.But we have clients in the business that have experienced these markets for many, many years, and what I’m hearing from them is that they don’t see any change in the fundamentals of supply and demand.
Is it a matter of institutional investors seeking shelter from the subprime crisis and the credit crunch?
I don’t know – buy cheap tadalafil uk. Buy cheap tadalafil uk: but I do know that speculators as a class do not agree on anything, and yet there is almost unanimity of opinion these days — and the money to make the opinions matter.The fact that prices have been relentlessly trending up suggests a new type of market participant [with] a mentality that is traditionally more in line with investing in securities than trading in commodities.If enough of these wealthy people buy cheap tadalafil uk, or funds, or other entities with a lot of capital decide to flip out of securities for a little while and go into commodities, and they’re all looking for something that is going up, and you get enough billions of dollars thinking that way, then their wish comes true.
- Skadden Lawyer Delves Into the ‘Dark Pools’ of the Oil Boom
- David Bario
- The American Lawyer
- June 19, 2008
Great interview with one of the most knowledgeable men on the planet when it comes to derivatives and their regulation. Click HERE to read the whole article.
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When I was at the University of Chicago getting my M.B.A., Dr.Aliber was so popular that it was very difficult to get into his class. His book on bubbles is required reading for anyone working in the financial markets.
“You’ve got speculation in a lot of commodities and that seems to be driving up the price,” Aliber, co-author of “Manias, Panics, and Crashes: A History of Financial Crises,” said in an interview from Hanover, New Hampshire; cheap cialis generic.“Movements are dominated by momentum players who predict price changes from Wednesday to Friday on the basis of the price change from Monday to Wednesday.” Click for Article.
- “Oil Rally Topped Dot-Com Craze in Speculators’ Mania”
- Michael Patterson and Elizabeth Stanton
- Bloomberg
- June 13, 2008
Here is Dr.Aliber’s biographical sketch from the Carnegie Council:
Robert Z – cheap cialis generic. Cheap cialis generic: aliber is Professor of International Economics and Finance at the University of Chicago.
He is Director of the Center for Studies in International Finance; on the research staff for the Committee for Economic Development and Commission on Money and Credit; and Senior economic advisor for the Agency for Economic Development, U.S.Department of State.
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“Scott Irwin takes down Michael Masters” Click here for Blog Post
I haven’t had a chance to read it in full but will let you know if there are any comments.
I suppose it’s only a matter of time before we hear from Dr; buy cialis generic.Craig Pirrong.
UPDATE: So I’ve read the blog post and I was struck by the following statement “flows of money, no matter how large, do not necessarily affect the futures price of a commodity at a given point in time.”
This seems to be the main argument that academics make (and one that I’ve never heard an actual trader make) that prices of commodities futures contracts must equal the equilibrium price of physical commodity supply and demand and that no amount of money flowing into the futures markets could affect the price.
Any trader will tell you that if a big order comes into the pits then prices adjust. Google the term “Goldman Roll” (a phenomenon which has absolutely nothing to do with supply and demand) and read actual traders talk about how the Goldman Roll moves prices around.
At the end of the day we believe that the price of a commodity futures contract is 100% a function of the supply and demand for that futures contract and that huge financial demand from very large institutional investors can and will move futures prices.
If prices can never be moved beyond their physical commodity supply and demand equilibrium price then why do we need a CFTC? How can one trading firm “manipulate” prices yet hundreds of billions of dollars pouring in cannot even make prices budge?
Update #2: We have heard from Dr; buy cialis generic.Craig Pirrong click HERE for his blog post.
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“Oil prices dropped another 5 percent to a seven-month low on Tuesday, extending the steepest two-day slide since 2004 as mounting economic turmoil sent investors fleeing to safer havens.
The losses came despite U.S – cialis 50mg.supply disruptions after Cialis 50mg: hurricane Ike crashed through the Gulf of Mexico last week and left a quarter of the nation’s energy output idled.” Click for Article
- “Oil in steepest two-day slide since 2004″
- Richard Valdmanis
- Reuters
- September 16, 2008
“The potential for less leverage — or borrowed money — at play in the oil-futures market has already helped spark a sharp fall in oil prices, which have lost about 20% of their value this month.The drop has come amid a slew of factors that should support prices, including a production cut by the Organization of Petroleum Exporting Countries, renewed attacks in key crude-oil producer Nigeria and a major knock to gasoline output in the U.S – cialis 50mg.Gulf Coast in the wake of Hurricane Ike….One executive involved in oil trading said brokerages have reduced or canceled lines of credit to traders, even telling customers they need to double the amount of margin required from last week.” Click for the Article (subscription required)
- “As Oil Speculators Lose Backing, Market Exodus Could Ripple”
- Gregory Meyer
- Wall Street Journal
- September 17, 2008
What Congress could not achieve, Wall Street is doing to itself, namely raising margin requirements. As Wall Street implodes the amount of borrowed money available to large speculators in the oil pits is drying up and they are having to liquidate positions.
AIG as one of the largest traders (and creator of the Dow Jones AIG Commodity Index) is obviously having an impact in the oil markets. Most likely we’ve got a relief rally today based upon the fact that AIG can now use the American people’s money in order to finance their large oil positions.
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Earlier today we posted comments by Michael Cembalest who is the Global Chief Investment Officer of J.P.Morgan’s Private Bank. We talked to Michael and he said that he would prefer not to wade into the public debate over speculators’ role in commodity price volatility and does not consider himself an expert. At his request we are removing his comments from the blog. His comments are public comments and we are clients of J.P.Morgan but we respect Michael’s desire to not be placed in the center of this debate.
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Representatives of Japan’s METI were briefing Congressional leaders last week on measures adopted by Japan’s cabinet in the last two weeks to address excessive speculation.
Apparently METI issued a White Paper in May that analyzed excessive speculation in commodity markets.
According to a staffer in the meeting their initiatives include
- strengthening position limits and increasing margin requirements
- improving the monitoring of investment flows into commodity markets
- requiring regular public reporting of commodity investments by pension funds.
Attached is a PDF (2.1 MB so it’s pretty hefty) that details the findings and the initiatives
When I find a link to the white paper I will post that as well (if it’s in English).
If they put the paper out in May then it sounds like they were well ahead of the curve.
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Energy Subcommittee Hearing: to receive testimony on recent analyses of the role of speculative investment in energy markets (Hearing Room SD-366)
Tuesday cialis cheap no prescription, September 16, 2008
02:30 PM
Witnesses
Mr.Michael Masters , Masters Capital Management, LLC.
Mr; cialis cheap no prescription.Robert McCullough , McCullough Research
Dr – cialis cheap no prescription.Jeffrey Harris , Chief Economist, Commodity Futures Trading Commission
Ms.Blythe Masters , Securities Industry and Financial Markets Association
Mr.Terry Duffy , CME Group
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“The Commodities Market Bubble: Money Manager Capitalism and the Financialization of Commodities”
- L; buy cialis cheap.Randall Wray
- Research Director – Center for Full Employment and Price Stability
- Senior Scholar – Levy Economics Institute -Bard College
- September 2008
Click the hyperlink below to download the PDF
The Commodities Market Bubble
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“The Oil Price Really Is A Speculative Bubble”
- R.S; cheapest generic cialis online.Eckaus
- Professor of Economics Emeritus
- Massachusetts Institute of Technology (MIT)
- Center for Energy and Environmental Policy Research (CEEPR)
- June 13, 2008
Click the hyperlink below to read the study.
11 pages long and well worth it.
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Philip Verleger has taken it upon himself to try and rebut our report The Accidental Hunt Brothers – Act 2.
Click HERE for his rebuttal.
Several people have asked us for our response. Well what can you say? Other than calling us names he really just gives an alternative view for why crude oil prices have shot up and then plummeted.
So this is what I will say:
(1) We believe that the price of WTI crude oil futures contracts is determined by the supply and demand of WTI crude oil futures contracts – it’s that simple.
There is a huge new source of demand from institutional investors who want to buy crude oil futures contracts and that affects the price as much as demand from any other source.
(2) Spot prices for physical oil are based off of the WTI crude oil futures price, so ceteris paribus a $1 increase in the “paper barrel” price will result in a $1 increase in the physical barrel price.
(3) Both the suppy and demand for crude oil are highly inelastic especially in the short run. When crude oil prices rise by $10 or $20 or $30 per barrel then the world is stuck paying that higher price until eventually they can sell their SUV (which just plummetted in value) and buy a Prius (which are in short supply).
(4) We don’t see much if any inventory growth because inventory is held in the ground. If crude oil starts piling up then the producers can simply pump less. They have no incentive to grow inventories and see crude prices drop as a result.
We’ll just have to leave it up to our readers to decide for themselves which they believe is the more plausible explanation.
Our report “Act 2″ was really meant to be read in conjunction with the larger and more comprehensive report “The Accidental Hunt Brothers.” I just gave 4 quick bullet points in this blog post so if you want greater detail then I would encourage you to read the big report – cialis cost low.
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THE ACCIDENTAL HUNT BROTHERS – ACT 2
If you click on the hyperlink above you can download the September 10th report entitled “The Accidental Hunt Brothers – Act 2” by itself. Please note that “Act 2″ is really an update to the first report so they are meant to be read together.
If you click in the banner at the top of this page you’ll get both reports and it will download quicker since they’re compressed in a zip file.
Any comments on the report can be made in response to this post.