Ah Gordon Gekko, fictitious corporate raider of the 1980s. He was a smarmy SOB but as a capitalist he nailed it. When everyone is out for a buck, everyone tries to one up the other guy and product quality goes up and cost goes down. Yes, there are situations where some regulation is good to protect the public but when the suits in DC wanted to curb futures trading in energy that wasn't it.
Fortunately, the house did not pass that bill. Hmmm, could it be that oil dropped 25 bucks in the interim? Speculators are bad when oil goes up and good when it falls. They are good when house prices go up but not when they fall. And the reverse for stocks, right?
We've gone over this topic before but here is a more comedic twist, courtesy of Fortune Magazine and posted to a chat list by a trader/analyst names Clayton Seitz.
What Onions Teach Us About Oil
Basically, everyone was whining when there was a futures contract here and prices plummeted. They banned it and now onion volatility dwarfs oil and corn.
Guess who is asking that onion futures trade again? You guessed it, the same onion growers that wanted it banned.
"There probably has been more volatility since the ban," said one of them.
Silly rabbit, restricting free trade is for ________ (you fill in the blank)
1 comment:
"Non-trader."
Ones who has no idea on market dynamics and economic cyclical nature.
New blog title is beautiful.
It's rather poetic.
Well done chap!
T.C.B.
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