On Thu, 03 Aug 2006 12:07:16 GMT, "JoeSpareBedroom"
wrote:

"Jack Goff" wrote in message
.. .

Only thing is, Joe doesn't want to stop futures trading for oil. He
supports handing it over to the oil companies.

First of all, the phrase "handing it over" is a silly idea. They *already*
participate in the exact same futures markets as the gamblers who are just
there for the thrill. I taught you earlier that the gamblers needed to be
eliminated. The gamblers often have no knowledge of what factors *really*
affect oil production, which is one of the reasons the price is where it is
today.

You seem to like the idea of keeping the gamblers in the oil futures game,
right? But, what if those same players were able to do the same thing with
everything you buy in the supermarket? Would you be interested in seeing the
price of vegetables double or triple because a bunch yahoos thinks the
presidential election in Mexico is a major threat? That's *exactly* what
you're seeing now with oil.

There are industries in this country which, for many years, have had their
own informal hedging methods, kept within each industry without any
participation (aka "static") from the type of investor who belongs at a race
track. Chemicals & groceries are two such industries. I'm in the latter
industry, and my job is to help buyers cost-average their purchases based on
*real* information about weather, past buying habits of the public (for
which they have unbelievably accurate data), and knowledge of the corporate
condition of the raw material producers. If my customers "buy wrong", it
rarely hurts the retail customer because temporary price jumps are absorbed
into the larger universe of past purchases. Grocery chains know they can't
take a 75 cent can of beans and crank it up to $1.25 just because *they*
screwed up. The product will just sit on the shelves.

The difference is this: The buyers I deal with know which factors *really*
affect their business, and which ones are nonsense. Want an example? You can
probably come up with one. Think back to hurricane Katrina. One big thing
affected almost every supermarket chain & wholesaler in the country,
regardless of location. What do you think it was?


Bull hockey. Safeway did it with tomatoes.

Let's boycott 'em.
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***** Have a Spectacular Day! *****
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John