A goodly portion of the reason gas prices have plunged lately, and a 38% decline meets my definition of a plunge, is due to the fact that Goldman Sachs tweaked the weighting on their commodity index. So what, right? Well, all the folks out their running managed futures funds, hedge funds and other various and sundry financial types, all had to go out and change their weighting of actual holdings in gasoline because that’s the benchmark their performance is measure by.
Here’s another analogy. The Dow 30 is composed of 30 stocks. There are a lot of mutual funds that own “the index” as we call it. All 30 stocks. But what happens when the Dow 30 changes the stocks that make up the index like they did in 2002. They removed AT&T, Kodak and International Paper and replaced them with AIG, Pfizer and Verizon. Now, all the stocks the index dumped took a dive, right? Because all the mutual funds, hedge funds and asset managers that hold the index dumped those stocks.
It’s the same with Goldman’s Commodities Index. If they reduce the percentage of gasoline in the index all the folks who follow the index’s weightings do the same and voila! Gas plunges.
Great timing too.
Which leads to three questions: what’s the economic rationale of making gasoline a smaller portion of overall commodoties in such a gasoline centric economy?
Why now?
And finally, who made the call to do so?
Might it have anything to do with the fact that the new Treasury Secretary used to be the Chairman of Goldman Sachs?
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It doesn’t really work that way. Not that much money is invested in poorly designed indices (such as the Dow). It used to be possible to game the SP500 and Russell 2000, but they’ve more or less dealt with that.
Goldy,
Please provide some references to support your assertions! Thanks!
Tim
Goldie: What moonbat economic theory URL provided that analysis you reworded?
It’s all about the inventories. I’d love to see hedge fund weenies lose their shirts.
http://www.econbrowser.com/arc.....pecul.html
I thought Hank (isn’t that his name) had some integrity . . . might just be a coincidence. Just goes against the vision I had of the guy.
Not sure I see the connection between gas prices and stock prices. Did Kodak cameras come down after the stock got dumped?
MWS, have you apologized for you ballot error yet?
More Crap from the king of crapola. They started this in September 2005. I love how you mislead!
Economic Derivatives Expand
Chicago Mercantile Exchange has taken a step into the over-the-counter market for economic derivatives, forming a partnership with Goldman Sachs that will provide clearing and electronic order routing services to an electronic market for economic derivatives operated by Goldman Sachs.
Economic derivatives are based on economic indicators such as unemployment and inflation. Over the last several years, a number of investment banks have begun offering various types of economic derivatives on an over-the-counter basis to market participants interested in hedging or taking a position on these indicators, which often have a pronounced effect on financial markets.
Goldman Sachs has taken a lead in this area, working with Longitude, a technology company, to develop a regular schedule of electronic auctions for these derivatives. The auctions use a patented process of mutualized order filling developed and operated by Longitude that resembles the Dutch auction process used in the initial public offering of shares in Google. Icap, the inter-dealer broker, acts as the lead marketer, disseminating price information and taking in customer orders. These three firms already have a relationship with the New York Mercantile Exchange for the clearing of energy derivatives based on storage statistics for crude oil and natural gas. (See “Economic Derivatives in the Energy Sector” http://www.futuresindustry.org.....038;a=1018 by John Sodergreen in the January-February issue of Futures Industry.)
Goldman Sachs and CME said they expect their partnership will significantly broaden access to the economic derivatives market and increase the level of investor participation. CME will provide centralized clearing, electronic order routing, and marketing services to these auctions, with clearing scheduled to start in September and electronic order routing scheduled to start in the first quarter of 2006. The auctions currently offer digital options, vanilla options and forwards on U.S. nonfarm payrolls, the Institute of Supply Management’s PMI index, weekly initial jobless claims, retail sales, European inflation, the international trade balance and gross domestic product, and plans to begin offering products based on the U.S consumer price index in September.
In separate but related news, Nymex has extended the range of OTC energy derivatives traded through a similar electronic auction format. Starting on July 18, Nymex, Icap and Goldman Sachs will begin offering over-the-counter options on prompt-month settlement prices for crude oil and natural gas. The options will be traded each morning in 30-minute auctions, using the same Dutch auction framework that Nymex, Icap and Goldman Sachs have been applying to the trading of weekly oil inventory and natural gas storage options. As with the weekly inventory auctions, Nymex will clear and settle these OTC options, Icap will be responsible for order entry, and Goldman Sachs will serve as a liquidity provider. These products will allow market participants to either hedge or take market risk directly associated with the daily swings in crude oil and natural gas prices. As with the existing weekly auctions, the daily settlement auctions will reveal the markets’ expectations for the underlying number, which has proven to be valuable information for investors, Nymex and Icap said in a joint press release.
Lying Monkeys Sons of Bitches!
The Saudis are helping the repugs too.
Doc shortchanges Central Washington voters
Maybe we should feel honored that 4th District Congressman Doc Hastings has declined an invitation from this newspaper’s editorial board for a joint interview with his opponent this year.
Such candidate interviews lead to the Yakima Herald-Republic’s endorsements of candidates and Hastings apparently knows full well they can’t be taken for granted. In that sense, it’s a compliment.
It’s also unprecedented — the first time in our memory that a sitting office-holder has refused our request for an endorsement interview.
Hastings, first elected in the Republican congressional landslide of 1994, is being challenged by Democrat Richard Wright in Hastings’ sixth bid for re-election. As is our custom in contested races in election years, we invite the opposing candidates in for a question-and-answer session, which plays a significant role in the board’s decision of whom to recommend to voters.
Hastings declined the invitation. In a faxed statement from his Washington, D. C., office last week, he said:
I’m certain you understand that during each election year candidates for public office are approached by a wide range of organizations and media outlets desiring to make endorsements in their races. Of course, common sense dictates that candidates decide on a case-by-case basis which media and other endorsements to seek.
In my case, since I’m not seeking the Herald-Republic’s endorsement, it won’t be necessary to include me in your endorsement interview schedule this year.
— Doc Hastings
http://www.yakima-herald.com/page/opinion
The Saudis
Always The Jerk: Since I don’t remember the whole ballot, I don’t apologize to donk. I do remember the selection box for party affiliation.
So you STILL don’t even realize your mistake? Wow.
http://www.futuresindustry.org.....038;a=1018
« Return to January/February 2005 feature articles
Product Profile: Economic Derivatives in the Energy Sector
by John Sodergreen
Advances in financial theory have now made it possible to bet directly on macro-economic statistics by using a new class of instrument called economic derivatives. These instruments are generally structured as over-the-counter options and forwards, and they are designed to reward traders for the accuracy of their expectations for these statistics, which can be a big source of volatility in the financial and commodity markets.
A year ago, this innovation made its first appearance in the futures world, when Goldman Sachs and ICAP formed a partnership with the New York Mercantile Exchange to create an electronic market for options on energy inventory statistics. While it is too early to call this new market a roaring success, it has achieved a certain amount of traction among the professional traders who follow these numbers.
You can read the rest at the link above.
Goldie. Lying sack of shit!
Goldie. Lying sack of shit!
Tell me how Gold has lost 3% of it’s value lately with the drop in ewrl (oil to moonbats)?
Maybe the middlemen are doing this: http://www.finpipe.com/commodswaps.htm
5 “Not sure I see the connection between gas prices and stock prices.”
We’re not talking about stocks here, we’re talking about commodity futures. There was a tutorial of sorts about that provided in the movie “Trading Places”. If you got past gawking at Carrie Fisher’s boobs, that huge room full of people screaming at each other was about trading options to buy or sell things for some price or other some time in the future. It’s possible to make or lose a pile of money pretty fast by betting on whether the price of orange juice, oil, soybeans or toilet paper is going to go up or down.
If you’ve got a bunch of cash, you can exert a fair amount of control over the short-term price of a commodity by buying and selling said options–especially by trading options on a resource you yourself actually buy and sell in the “real world”. That was what Enron was all about.
Oh, yeah….what happened to Kodak was that their stock got dumped because they kept making film while most of the world switched to digital photography.
That was Jamie Lee Curtis.
For you sillyguy:
Dennis Hastert has now announced that while the Foley revelations and his cover-up of it were a real boner, that he is calling on all Republicans to reach around and give each other a hand. While Foley comes at an uncomfortable time for Hastert and the leadership, Hastert believes they can survive this blow, like they have so many before. While they might no longer be cruising, Hastert feels that they will take it in the end. Whether Santorum will be involved is still not clear.
JCH has not posted much of late. They must limit his access to the internet at the rehab he is at in Florida.
What next Goldiemeister, Sugar?
http://quote.bloomberg.com/app.....vSKKfbkEkY
In other news, North Korea is planning on testing a nuclear weapon.
Yep, George Bush has made us a whole lot safer.
ArtFart: Remember the Hunt Brothers when they tried to corner the Silver Market: http://www.buyandhold.com/bh/e....._bros.html
I guess it would be a total coincidince if gas prices go up after the elections? Supply and demand, the invisible (monopolistic) hand, Adam Smith, fre-will, the Devil, his brother the Debbil!!!, and the Nobel Prize Winning blather of MILTON FREIDMAN!!!
Who you kiddin’? Righties?
Arafat won the Nobel prize too.
MWS:
First you get the surgar,
Then you get the money,
Then you get the women.
There’s truth, then there’s Goldie truth. He gets it from another source; looks good to me, promotes my bullshit agenda, I’ll post this swirl, my furballettes will drink this kool-aid, mix it with some political horseshit from my horsesass and put it on my web site! As Jon Subway Eat Fresh Lovitz said: “Yeah, that’s the ticket!”
MWS, I’ll listen to your rantings if you’ll accurately explain the primary ballot in Washington, then apologize for your earlier insults related to said ballot.
Maybe President Bush had something to do with like sending a storm into New Orleans and jacking up the prices thus making great profits for himself and his wealthiest friends. The Queen of Washington tax the shit out of gas so no one could buy a tank full let alone a half tank. Now with that surplus the gas companies drop the prices everywhere except in the State of Washington. Yep we still have the highest gas prices in the country. Yes? No? Hell the Socialist Democrats took over the oil companies and giving low gas prices in Seattle for their large support for excessive taxes. Now that is a sweet deal for the extremist in this State. Goldy if you are going to make outrageous statements you need to stretch the truth a little bit. Like if Marie Cantwell who now represents us now would be forcing everyone to be taking a bus to work. Now out of the kindness of her hart she extorted oil from Alaska in exchange for Washington apples for the poor. Her friend from South America would provide oil also if the Republic of Seattle recognize his country and provide military support if Bush invades his country. Now that is a way to support a friend in times of need do you agree?
I thought there would be all these hurricanes. This would drive up the price of oil.
In other news, North Korea is planning on testing a nuclear weapon.
Yep, George Bush has made us a whole lot safer.
Commentby JDB— 10/3/06@ 5:11 pm
JDB where have you been all these years? The Koreans have been trying to test a nuclear weapon for years. With a little help from your friends that could be sooner. Now I have yet hear about the PLAN on how to win the War on Terror. JDB can you spit it out for us slow folks, so we can understand what you are saying? Hell you can even scream it out like Howard Dean.
PS you other Chaps can help him if you want. Now don’t forget the fine details on how you will find Osama Bin Laudin and destroy all the cells all over the world. Please make sure the plan doesn’t conflict with everyone in the world from loving the USA.
MWS
Picture this:
GW and Dick Cheney are on the front lawn of the White House barbecuing live puppies. As an unquestioning loyalist, as all good Americans should be, do you:
a) Applaud this preemptive strike upon canine terrorism;
b) Strike up a chorus of “God Bless America”;
c) Request that they give you a medium rare slice; or
d) All of the above
Well, MWS, looks like you’ll never figure it out. Your case of Teh Stupids is more advanced than I feared.
You’re dismissed… with prejudice.
CREW is funded by George Soros? Amazing!
These instruments are generally structured as over-the-counter options and forwards, and they are designed to reward traders for the accuracy of their expectations for these statistics, which can be a big source of volatility in the financial and commodity markets.
Statistics drive markets? Who’da’ known? I’ll bet the spreads are a killer.
Can we say now that The Clinton Recession is finally over?
http://biz.yahoo.com/ap/061003/wall_street.html?.v=47
ArtFart: Remember the Hunt Brothers when they tried to corner the Silver Market
The Hunt boys made a stupid play in a market that had way too much inventory and production capacity. Typical conservatives.
Now Jay Gould….aye, there’s a story!
MWS
George Soros is not an elected official. Denny (Duh) Hastert is. Who has an obligation to the American people? Answer my query about barbecuing puppies. I know you’d cheer on Bush and Cheney for anything they did.
Republicans were ABC’s sources, not Democrats.
Tell me how Gold has lost 3% of it’s value lately with the drop in ewrl (oil to moonbats)?
MWS: A 3% move in the price of gold is no big deal. It’s a pretty volatile market, but I’m sure you’ll provide us with a convenient ex post (that’s “after” you you right wing loons) explanation.
33
Nope.
33 – Pay your fucking gambling debt to Goldy.
33
Have we yet blamed Clinton for crucifying Christ? Bush’s recession is about to nail even you, my brother.
Hey WOS – it sure does suck your crap isn’t sticking to the wall – not that it ever did.
Are you going to admit you forgot the ballot had partisan and non-partisan races?
A man would admit his mistake. A child would hide and deflect.
(Bloomberg) — Oil analysts are raising their price estimates for next year in anticipation of increased demand that may outpace the development of new deposits…
“We see a very tight market continuing into next year,” said Kevin Norrish, a director of commodities research for Barclays Capital in London. Barclays expects oil next year to average $76.70 a barrel, the highest forecast in the survey.
“The recent fall in prices is due to short-term factors,” he said in an interview. “We’re looking for fairly strong global growth, and we don’t see capacity expanding by much.”
Enjoy while you can.
Donk are stupid. Last week I posted a link where George Soros said he was leaving the political scene. Next this appears and it has his CREW all over it. Amazing.
Always The Jerk. Left side of the ballot: Choose Your Party Affiliation. Vote in the chosen column.
Jerk!
Clueless – Fill me in… are these the same analysts who said in 1973 that we only had 5 years worth of oil left?
Just wondering…
44 – Pay your fucking gambling debt to Goldy.
FtC, it appears he still believes only Republicans can vote for Supreme Court races in the primary. Even after you’ve pointed it out several times. After two days, you’d think he would have at least figured out that he had made a mistake, even if he lacked the integrity to admit it and apologize for his behavior. But even that’s too complicated for him. Simply amazing.
46 – Agreed. WOS is forever the child believing in right-wing tall tales. Except the reading isn’t too good lately.
Examples here and here.
Always the Jerk: I followed the directions as I saw them. The directions said if you didn’t choose party affiliation your vote WOULD NOT COUNT!
Sure is amazing how For Thoroughly Clueless uses right wing web sites he thought were disgusting and worthless.
Sorry FTC you are an exhasting donk. It is exhausting to post against your crap.
Always The Jerk is dismissed as foolish!
MWS, I’ll explain this to you, then I’ll never lower myself to addressing you ever again. Read this very slowly. Then read it again. Then have a child explain it to you.
In the primary, you vote for both partisan races (but only one party) AND non-partisan races. The race in which For the Clueless said he voted for a Republican was a Supreme Court race. Those races are “non-partisan,” but – and here’s the part you need to get – both of the candidates were known to be Republicans. Thus, he voted for a Republican in a “non-partisan” primary.
It is now two days after this started in a foolish post by Puddybud, and you’re still so stubbornly, proudly, stunningly ignorant that you don’t have the first clue what it is you’re arguing about.
You. Are. Dismissed. With. Prejudice.
When gas prices go back up after the election, only the moronic, inbred cowards on this board, i.e., republicans won’t understand why. The rest of us won’t be one bit surprised. And fortunately, except for a few cowardly right wing trolls here, polls show people know that Bush and his regime have manipulated the prices.
David Goldstein..Noble Prize winning Economist???
Nope.
I’ve been busy reading all the smut on Cantwell, her Federal Lobbyist/lover and the unrepaid $50,000 the lover forgot what it was for. Good stuff.
#51
Better get out and put your money in oil. You should make a bundle when the prices go up.
#52
Goldie is praising stefan on SP for his delicous find. Goldie even said he was JEALOUS. Thats a first…
Always The Jerk: I don’t trust For Thoroughly Clueless. If that’s what the ballot said fine. I read it as you had to choose a party first!
I was just over at (un)SP. Not one word about Foleygate.
They are really fixated on some divorce case though. Apparently Maria Cantwell and some rumors.
I guess they have their priorities. The part is going down in flames and they want to read a divorce file.
Funny how that works out.
Dear DarcysnotyourGal @ 53:
Um, Goldy is not spelled Goldie. The post is an imposter.
You are the dumbest jackass of the day.
Funny how that works.
#56 LOL Made you Look he he he
Dress her as a choirboy.
Commentby headless lucy
Lucy how is your sex change going? When is the big day to have your surgery? You did say you started the hormone treatment already? Did you find a Doctor in Thailand or the United States to do the surgery? Your dad sure did you a disservice by calling you Lucy.
http://www.mtfsurgery.com/surgery_srs.php
From the standard guidelines for clinical practice, the patient must have met the criteria for SRS, as follows:
1. Be of legal age in the patient’s nation; In Thailand, the father/mother or legal custodian may give consent for patients under the age of 18.
2. 12 months of continuous hormonal therapy.
3. 12 months of successful continuous full time real-life experience.
4. No medical impediments.
5. Medical letters of recommendation required for SRS: one from mental health professional psychotherapist; the second letter should be from a psychiatrist or a Ph.D. clinical psychologist.
Surgical transformation or male to female genitalia conversion may make use tissues existing on the patient in the formation of female external anatomy.
MLF – Yeah, nuthin’ at all wrong with Maria giving taxpayer money to her fuck buddy. At least she didn’t write nasy e-mails…. or did she????
Have we yet blamed Clinton for crucifying Christ? Bush’s recession is about to nail even you, my brother.
Commentby proud leftist— 10/3/06@ 6:04 pm
Maybe Proud Leftist you should repent for your sins.
http://www.youtube.com/watch?v=nNITmMU_rQU
MTR @ 59:
Got any proof? Lots of people fuck. Lots of people loan money. Let us try to remember that everyone involved is over 18. (snicker)
DarcysnotyourGal @ 57
Hate to break it to you, I was already there, saw it, had my laugh, knew some wingnut would believe it, and you did not disappoint.
Funny how that works.
I hear that Klake is jealous that Foley got to the underage boy first.
16 JDB
Huh! What are you talking about? My only post was to ask for references from Goldy about the point he was trying make on Gas prices.
Always The Jerk: I don’t trust For Thoroughly Clueless. If that’s what the ballot said fine. I read it as you had to choose a party first!
Commentby Mike Webb SUCKS— 10/3/06@ 7:24 pm
Mike check out this link but don’t past it on to your friends. this message will selfdestruct in 30 seconds.
http://www.youtube.com/watch?v.....38;search=
Hello my name is Joe, I am a terrorist, and this is my blog
Goldy is this your brother starting up a new blog?
http://www.youtube.com/watch?v.....38;search=
Many folks on this blog support these types of people and only wants to but them in jail and have the taxpayer support them.
http://www.youtube.com/watch?v.....38;search=
Bad Pun of the Week
The Democrats are ‘exfoleyiating’ the ‘bark’ of the Republicans in their ‘dogged’ pursuit of the ‘grand fall’ elections.
Good be a good thing… the ‘grand fall’ part anyway.
Thank you folks, tip your waitresses, order the veal!
re 58: What does all your blather have to do with the hapless homo Republican child rapist, Mark Foley, and the Republican leadership that cynically put him second in command to a committee that was supposed to help exploited children — not create more of them.
You guys are monsters.
And you can ask Ted Bundy what happens to monsters — well– bad example.
re 52: “…Noble prize winning….”!!!!??????
Better clean your ears. It’s beginning to clog your brain…
All you liberals please don’t click this link.
http://www.youtube.com/watch?v.....38;search=
FOX News has finally figured out how to blame the Democrats for Foley since everything else that the GOP has tried has failed today.
They just labeled him a Democrat when they cut to his picture three (3!!!) times during O’Reilly today.
I guess saying that the GOP was all right for covering it up because the Dems somehow knew everything about it anyway was just not working.
http://www.wonkette.com/politi.....205075.php
Chris said:
It doesn’t really work that way. Not that much money is invested in poorly designed indices (such as the Dow). It used to be possible to game the SP500 and Russell 2000, but they’ve more or less dealt with that.
Chris quite obviously doesn’t have a clue what he is talking about. A large part of the Bull run-up was do to money managers passively indexing the assets they managed, whether it was ERISA money, or hedgehogs, etc. . . the fact that they bought calls on the S&P500 was a significant chunk of their performance both up and then downward when they had to unload.
The same thing is very realistic here vis-a-vis gasoline on the NYMEX. Hedgehogs, derivatives, all kinds of hybrid funds here, managed futures asset pools. There is more than enough money to cause the price to either go up or down. And when a Benchmark Index (poorly designed or not) is tweaked it has a material effect on the markets. I was an asset manager for ten years. I know whereof I speak.
they found Roger Rabbit in Iraq yesterday.
http://www.youtube.com/watch?v.....38;search=
Attention all Democrats, just step back and let the GOP destroy itself:
A prominent and powerful evangelical Christian leader, James Dobson, said yesterday that the Mormon faith practiced by Governor Romney of Massachusetts could pose a serious obstacle if Mr. Romney makes a bid for the Republican presidential nomination in 2008.
“I don’t believe that conservative Christians in large numbers will vote for a Mormon but that remains to be seen, I guess,” Mr. Dobson said on a syndicated radio program hosted by a conservative commentator, Laura Ingraham.
http://www.nysun.com/article/40802
FOX News has finally figured out how to blame the Democrats for Foley since everything else that the GOP has tried has failed today.
They just labeled him a Democrat when they cut to his picture three (3!!!) times during O’Reilly today.
I guess saying that the GOP was all right for covering it up because the Dems somehow knew everything about it anyway was just not working.
http://www.wonkette.com/politi.....mes-desper ate-measures-205075.php
Commentby Doctor Maf54 Kennedy— 10/3/06@ 10:07 pm
================================================
Foley couldn’t be a Dem. When Dems like Studds(D-Child Molester)screw pages they don’t resign; they claim they did nothing wrong and get re-elected by Dems.
Republican Congress Man = bj artist on male teenagers sanctioned by sanctimonius moralistic harpies Republican Party leaders.
It be unlucky day for you guyzzzzzzzz!!!!!!!!
Foley be from Florida.
George “Makakastein” Allen piss of religious right.
They ask him: “You some kinda swarthy jeyuwwwwwwwwwwwwwwwww?”
He fool them all these years! Hah!
http://www.msnbc.msn.com/id/15117698/
Oops wingnuts! Your world is crashing. How will you deal with the utter defeat coming your way in five weeks? Suicide? Depression?
HE HE!
Using the Moonbat Stupidity Network (MSN) looks like they grew a set and are now posting some truths to the Foley matter:
http://www.msnbc.msn.com/id/15126151/ – Even the FBI said this one is tough to prosecute. So he’s a scumbag. To paraphrase a donk two weeks ago “So what?”
Another rush to judgment on the side of the horsesasses.
Goldie: You haven’t posted an update (doubt you will as when us on the right identify posted fallacies you NEVER react) to that post you copied for this thread header. Now you see your gas price commodity/Goldman Sachs was started in 2005 and your intelligence on this matter is shown worthless.
Shame shame shame – misleading your donk to the wrong trough of commentary!
now FOX is trying to paint
Foley as a democrat. What a bunch of scumbags.
Foley’s a gay blade. Isn’t your party the one of gayness, let’s not out them? Don’t Ask Don’t Tell.
I wonder…
Goldie: More cold water for them shriveled stones:
http://today.reuters.com/news/.....038;rpc=23 – So Hugo Chavez is beholden to Goldman-Sachs? What a crock of crap kool-aid for the Furballettes to swallow.
Speaking of swallowing, Mt Rainier, how are those loaded condoms?
More good news on oil, something Goldie’s brain has issues with:
http://www.breitbart.com/news/.....ffiup.html
Tell us Goldie, what does your quartz ball say about pork bellies?
LauraBushKilledAGuy @ 79-ish:
Thanks for the link. I flipped through the poll and found the following question and response (on page 2):
Has what you have seen and heard over the past few weeks made you feel more favorable, less favorable, or had no effect on your feelings about possibly having the Republicans maintain the majority in Congress? +
More favorable ………………………………………….. 18
Less favorable ………………………………………….. 41
No effect ………………………………………………….. 35 Have not seen/heard enough to say (VOL) ….. 4
Not sure ………………………………………………….. 2
18% of the respondents of polls are HA trolls. Who knew?
(Note: I can understand, if not agree with “no effect”. But if anything you’ve been seeing makes you feel more favorable towards keeping the GOP in power, I am frightened about your grasp of reality)
MWS, this is simply amazing. In one open thread, you’ve managed to fully demonstrate you inability to think clearly not once, but twice.
You clearly don’t understand that, regardless of the party affiliation you’ve selected on a primary ballot, you are allowed to vote for anyone you want to in a non-partisan race. Amazing how your brain is incapable of parsing the meaning of “non-partisan” in that context.
Given your inability to parse the meaning of “non-partisan,” I don’t think anyone is surprised at your inability to grasp the effect of a change in futures prices on current stockpiles. And, yes, the particular index in question was established in 2005. That little tidbit is irrelevant. I’ll try to make this as simple as I can.
When futures prices for oil are high relative to the spot price, then the folks who run oil refineries tend to stockpile oil. Why? Simple really. If you’ve paid $70 a bbl for the oil in your tanks and you can write a guaranteed contract to sell that bbl of oil for $73 dollars, you have a guaranteed profit of $3 per bbl. So, as an oil refiner, you tend to hold on to that oil when futures prices are high.
When futures prices for oil fall, which is exactly what happens when Goldman Sachs changes the composition of the commodity index tracked by fund managers who are moving around billions of dollars, then oil refiners are less likely to hold on to the oil they’ve stockpiled. This results in a short-term increase in the amount of oil that gets refined into gas, and the result is donward preassure on current gas prices.
So the question really is rather interesting: why did Goldman Sachs decided to reduce the percentage of oil in their commodities index?
Remember I posted last week how Jonathan Alter and others wanted US consumers to buy Citgo? Remember I wrote Hugh Chavez does not care about his people.
http://www.nypost.com/seven/10.....ontero.htm
Read on moonbats and learn the truth. CNN’s Wolf Blitzer loves the guy. Watch Wolf fawn over Hugo. Go to CNNs web site.
Given your inability to parse the meaning of “non-partisan,” I don’t think anyone is surprised at your inability to grasp the effect of a change in futures prices on current stockpiles. And, yes, the particular index in question was established in 2005. That little tidbit is irrelevant. I’ll try to make this as simple as I can. Crap from Don Joe
Don Joe: Maybe just maybe I keep it up because you all keep dwelling on it. I love how to spin up the donk.
Regarding your amazing display of ignorance the commodities index, look at the thread title. Goldie posted a link which claimed the index was recently started. It took me about a minute to visit the futures market and determine how Goldman Sachs started the index. I proved the link and Goldie for not researching it DEAD WRONG!
Did Goldie do his homework before copying and pasting his snippet? NOPE.
Does Goldie care about his “rep” over his truths? NOPE.
Does Goldie post librul swill as kool-aid for the furballettes? YES
Don Joe, I am glad you agree Goldie is a liar. Thanks for the revelation. It is a big one as he created the link.
Apparently facts hurt the librul mind!
Oh and just for you:
STUUUUUUUUUUUUUUUUUUUUUUUPIIIIIIIIIIIIIIIIIIIIIIIIIIID donk!
I keep hoping that MTR, with his stated expertise in derivatives trading, will duck in to explain this to us. In the mean time, I will have to stand in for him.
If you ever flip through a copy of the WSJ, The Economist, the FT, or one of those other filthy capitalist rags, you’d know a lot of speculative money has gone into the petroleum market. I’ve read that this is because oil is supposed to be a good inflation hedge. Why a commodity whose price is being propped up with hot money is a good hedge against inflation is an utter mystery to me. Mark, I’m serious. Would you like to chime in here?
Most of the economic indicators have been pointing to an economic slowdown of some sort or another. In general, inflation occurs in overheating economies where labor shortages push up production costs, not in balanced or cooling economies.
(note: I am referring to developed economies that are more-or-less run by grownups. If you’re an idiot like Mugabe who runs the printing presses at the treasury you can have massive inflation with no economy whatsoever)
Slow growth -> less inflationary pressure -> less need to hedge your portfolio against inflation -> taking hedge money out of the petroleum market -> falling prices.
Goldman Sachs plays in this world as well. Assuming this analysis is correct, they would adjust how much petroleum is in their index.
Don Joe cont’d: The precipitous drop in oil is due to market forces. Notice the demand has dropped off a little and Nigeria and Venezuela are recommdending cuts to drive up oil prices. Wait Goldie says, it’s Goldman-Sachs and the commodities market. Now if we develop the Gulf and Alaska, we can drive the price lower. Do you like higher gas prices? WHy are WA state prices so much higher than Ohio or Missouri? Donk love taxes. WHich tax is punitive you moonbats? Which tax hurts the lower and middle class? Gas taxes. Goldie should be glad the price of oil has dropped so his pet projects like the Seattle Tunnel to replace the viaduct can be funded noW!
7 MWS
You’re full of shit. This is not about derivatives, but rather about the Goldman Sachs Commodity Index (GSCI) and the change they made in July 2006. Funny, but that was shortly before prices started to drop. It’s as though there were a connection.
2 sillyguy
Get off your ass and click through. The source is financial analyst Jeff Saut at Raymond James, who cites The Financial Times when he says:
He also says, interestngly enough, in the same piece that the reason the Dow is so high when so many of its component stocks are far off their highs is because the dollar is dropping, dropping, dropping.
If you ever flip through a copy of the WSJ, The Economist, the FT, or one of those other filthy capitalist rags, you’d know a lot of speculative money has gone into the petroleum market. Comment by JSA
JSA: You are one of the few donk moonbats who can speak with any credibility on these markets. Goldie sure can’t. Goldman Sachs looked at this back in 2004 and then started it in 2005. Do they control the oil price? Do people put their money where they think it will grow? Do people have fund managers who maximize their wealth so they can grab bigger commissions? IF GOldie had taken the time and looked it up vs. posting someone else’s crap he’d have no problem from me. Instead he drank some kool-aid (Mr Rainier drinks white sticky stuff) and posted crap.
BTW how is the BC bud up there?
MWS, you’re delusional. Neither Goldy’s post nor Sean-Paul Kelly’s post on the Agonist claims that the index was “recently” created, though, even if they had, the point is rather moot. “Recent” is a fairly relative term whose range of meaning is sufficient to encompass something that happend roughly a year ago.
So, really, is this the best you can do? Pick some inconsequential, vague, indeed non-existent, factoid, hammer it to the ground so you can justify calling someone a liar, all the while completely ignoring the issues that are germane to the present circumstances? How typically Republican of you.
MWS,
“The precipitous drop in oil is due to market forces.”
First of all, we’re talking about the precititous drop on gas prices. See my comments above about how futures contracts affect current gas prices.
Secondly, if fund managers selling off futures contracts doesn’t fall under the general rubric of “market forces,” then exactly how might one characterize those actions in Economic terms?
Daddy Love and Don Joe: Are you admitting Goldman Sachs is sage where they are telling people to leave oil and go somewhere else. I thought the goal of a well diversified portfolio is usually to outperform the main composite indexes. You know, make money. So if oil/gas have run their course you want to keep your money there? Maybe they were propped up by insane market forces which had the rug pulled out from them caused the drop.
So you moonbats why not go to the source and read why it is?
http://www2.goldmansachs.com/gsci/
The Forex currency blog (if you can believe one exists) says that a US recession “looms” (I think it’s in the August entries), and that (September):
The US Bureau of Economic Statistics today released its monthly report on America’s trade balance, and the numbers were not pretty. The monthly current account deficit has reached a new high, at $68 Billion, attributed primarily to soaring commodity prices. As the trade balance (exports minus imports) represents one of the components of production, economists are now revising their GDP growth estimates downward to reflect this latest development. The Federal Reserve Bank would love to see the USD depreciate in order to stem the balance, but it may have to wait for interest rates to narrow further before it sees its wish fulfilled.
96
Let’s see, financial analyst Jeff Sauts of Raymond James thinks that changes in the GSCI can move the market, and MWS thinks not. Who to believe, who to believe?
Cheaper? Really? She lives off the producers and somehow claims it’s cheaper for us to insure all of them. Here’s an idea: Wouldn’t it be a LOT cheaper to tie her tubes? WTF do we let somebody making 39k keep breeding?
http://seattletimes.nwsource.c.....ft04m.html
MTR @ 99
You know, not everyone can get on a blog and lie about their income, Mark. Take you for instance.
Your stupidity is exceeded only by your ignorance.
Funny how that works.
MWS,
” I thought the goal of a well diversified portfolio is usually to outperform the main composite indexes.”
Actually, you have that backwards. The goal of a commodity index is to provide a mechanism where small investors can participate in commodity trading by purchasing shares in a fund that tracks the commodity index. People who buy shares in a fund that tracks a commodity futures index aren’t trying to beat that index any more than people who buy shares of a fund that tracks the S&P 500 are trying to beat the S&P 500.
The basic idea is to provide small investors a way to diversify beyond stock categories and be able to include some percentage of commodities futures in their overall portfolio. Before the commodity futures index was created, small investors could only choose between stock funds, bond funds and money-market funds. Now, they can add commodity futures funds to that overall portfolio.
None of this means that I think people should buy shares of a fund that tracks either the S&P 500 or the GSCI. The fact is that people do buy shares of these funds. We’re talking about positive issues, not normative issues.
Since we’re on the topic of economics here, does it seem odd that the Republicans are imploding in a non-Presidential year when a number of economic indexes seem to be dropping?
Even I am not so cynical as to believe that the Republicans would be so corrupt as to orchestrate the Foley incident in order to have an excuse to lose this race, dumping the problem on the Democrats, but I do notice that the response is looking more and more like a Three Stooges movie. These folks are seasoned and experienced politicians. It is difficult to believe that they are really that stupid. Corrupt, yes, stupid, no.
They made the various messes that we find ourselves facing, and they apparently have no idea as to how to solve them. Maybe the idea is to get out of the way just before it really hits the fan, hoping that the results stick to the Democrats, then blame us for the mess come 2008.
It’s really beginning to look like they’re trying to lose.
JHC,
I posed a simple set of questions for you on the “Bill Frist’s GOP: The Party of Cut-and-Run” thread” that any qualifed OOD “Surface Warfare Officer” would easily know. I thought it appropriate to post it on the “Cut-N-Run” thread because I knew that’s exactly what you’d do. From now on I’ll just refer to you as “runner.”
I’ll repost my question here: Good luck, Runner!
“OK, JCH, the question of what to do with a hot missile stuck on your rail is too complicated for you.
Let’s try something easier that a “Surface Warfare Officer” and a qualified OOD (Officer Of the Deck) should easily know.
You’re the OOD, it’s 2:30 am and you’re at GQ under hostile conditions. In the aft missile house a conventional surface-to-air missile becomes stuck in the missile house doors leaving the doors ajar on a twin missile launcher. Answer the following questions.
The questions go from easy to hard. However, in order to be a qualified OOD in the US Navy you must know the answers to these questions.
A) Who has the conn?
B) What is the material condition of your ship?
C) Which group would be tasked with the repair?
D) Can you fire a missile off the other missile rail to defeat an incoming hostile aircraft?“
There are a lot of financially ignorant people in the world, yeah? And many of them seem to have inhabited this thread.
Redneck,
What other people do with their reproductive organs has nothing to do with you. Do you really believe you are going to stop others from having sex and babies? Your comments about women are always offensive and vulgar. Should the males who made those kids get castrated as well??????????
As a male, you don’t have a leg to stand on complaining about women having babies. Where the hell is those kid’s fathers and why the fuck arn’t they paying child support and health care for their kids? It takes a male and a female to make babies……..
We don’t live in China yet.
Goldy,
You are a moron.
The reason for the drop in gas and oil prices is simple economics (not the vast right wing conspiracy). Check out today’s “Weekly Energy Report” and you will see a surprising build in oil, gasoline and distillate inventories. In fact, they are well above their five year averages.
You only make a fool of yourself when you post this kind of nonsense.
107 jaybo
Let’s see, financial analyst Jeff Sauts of Raymond James (the original source for the information, if you don’t count The Financial Times) thinks that changes in the GSCI can move the market, and a guy who comments on a blog under the name “jaybo” thinks not. Who to believe, who to believe?
Jaybo,
Which “Weekly Energy Report,” are you talking about? This one shows that crude oil inventories fell for the week ending Sept. 22. Distillate inventories increased, but that’s exactly the thing we’d expect to see as a result of a fall in futures prices.
107 jaybo
But when I look at the Weekly Energy Report, it tells me that the four week average (production) ending 9/29/06 for gasoline is up only 3.9% over teh same period last year, and the same measure for distillate fuel oil is up only 0.5% over last year, while the four week average of “total products supplied for domestic use” is up only 2.8% over last year. Is that supposed to convince us?
MWS @ 93:
I wish I could comment on the BC bud. There is a lot of it. Unfortunately, I have a day job, and anything where taking one drag leaves me in a topor for six hours straight is something I’d just as soon stay away from.
Daddy Love @ 110,
You are another moron. That report is a week old and this week’s will be available online shortly. Again, stick to subjects you understand, that way the rest of us can’t laugh at your ignorance.
NEWS FLASH!
“Hillary Clinton Implicated in Goldy’s Breaking Story of Energy Price Fixing”
(note the campaign contribution from the evil Goldman Sacs)
This list of the top donors to Hillary Clinton’s 2006 re-election campaign, compiled by the Center for Responsive Politics and made available on the organization’s website, http://www.OpenSecrets.org, is based on the most recent Federal Election Commission data available. According to the center, “the organizations themselves did not donate, rather the money came from the organization’s PAC, its individual members or employees or owners, and those individuals’ immediate families. Organization totals include subsidiaries and affiliates.” The center also notes that “typically, members of Congress draw their contributions from two main sources: PACs and lobbyists who give because of the member’s position on key congressional committees, and local companies, unions and other organizations from their home district.”
10. Ernst & Young: $73,775
1285 Avenue of the Americas
New York, NY 10019
212-773-3000
9. New York Life Insurance: $86,000
51 Madison Avenue
Suite 3200
New York, NY 10010
212-576-7000
8. International Profit Associates: $88,400
1250 Barclay Blvd
Buffalo Grove, IL 60089
847-808-5590
7. Skadden, Arps et al: $90,030
Four Times Square
New York, NY 10036
212-735-3000
6. Time Warner: $104,960
One Time Warner Center
New York, NY 10019
212-484-8000
5. Morgan Stanley: $105,810
1585 Broadway
New York, NY 10036
212-761-4000
4. Corning, Inc.: $133,400
One Riverfront Plaza
Corning, NY 14831
607-974-9000
3. Citigroup, Inc.: $141,000
399 Park Avenue
New York, NY 10043
800-285-3000
2. Metropolitan Life: $154,100
One MetLife Plaza
27-01 Queens Plaza N.
Long Island City, NY 11101
212-578-2211
1. Goldman Sachs: $168,290
85 Broad Street
New York, NY 10004
212-902-1000
Daddy,
It’s a shame, but far too many people who think they understand Economics forget that “supply” isn’t about quantities in inventory. Rather, “supply” is a relationship between quantity and price. Thus, they fail to grasp the distinction between changes in inventories, which in and of itself won’t affect prices all that greatly, and changes in the supply-side relationship between quantity and price.
The point that gets missed lies in the concept of “opportunity cost”. When the price of crude oil futures goes up, the opportunity cost of refining a bbl of crude oil goes up (refiners can simply hold on to that oil and sell it under a guaranteed price at some point in the future). This changes the price at which refiners are willing to sell the various products made from refining a bbl of crude oil. Thus, we get what is generally known as an upward shift in the supply curves for refinery outputs.
Note that this really has very little to do with actual inventories. It’s all about the relative rates of return that oil refiners can expect vis-a-vis changes in futures prices for crude oil.
Jaybo, I’m afraid you’re the person who really doesn’t understand this stuff, but you seem quite content to remain ignorant of your ignorance.
111 jaybo
Newsflash. Senators raise money. Pictures at 11.
Don Joe @ 114,
I will bet you right now that oil prices are headed lower (maybe as low as $50.00 per barrel) based on the continuing rise in energy supplies.
Of course the fact that the rise in supplies directly correlating to the drop in prices has to be a coincidence, right?
E-3 GBS, Been many years and I had little to do with missiles. My experience was Newport Class LSTs in the Western Pacific [home based in San Diego, Ca] In Gunnery (something that an old-timer like me would know more about) you have terminology like “Hangfire” and “Misfire”. I would assume that in missiles it would be the same – but would not swear to it. If you have a “hangfire”, you wait a length of time (5 mins unless you have a HOT GUN) to see if it will be a delayed fire. If after 5 mins, the projectile does not leave the barrel on its own, you classify it as a misfire and take other steps to remove the round (open breech and remove). However, if you have a hangfire in a hot gun (determined by the number of rounds fired in a specific length of time), you would take other steps because of the concern for a “cook-off” due to the projectile/powder case sitting in a hot barrel. The steps include external and internal cooling of the barrel. We trained by cooling the barrel with fresh and salt water. Again, 3 inch/50s have little to do with today’s weapons. That was your last question, E-3 GBS. Report to your LPO ASAP!!!
Jaybo,
When you use meaningless phrases like “directly correlating,” you really do reveal that you don’t know what you’re talking about. What, pray tell, would “indirectly correlate” mean, and how would we distinguish “indirect” correlation from “direct” correlation? Things either correlate, or they don’t.
Now, it’s certainly possible for changes in inventories to indirectly _cause_, a change in prices, but the causal chain has to work its way through the various rates of return involved in other changes in the Economy. Indeed, it’s possible to have both increasing inventories and increasing prices. After all, what do you think just happend over the past 12 months?
But, you’re still off the mark. The issue at hand is whether or not Goldmand Sachs’ change in the composition of the GSCI would affect the price of gasoline, and, to anyone well versed in Economics, the answer is, “most certainly.” Indeed, I’ve already outlined the precise causal chain involved in the pricing decisions of oil refiners.
If you don’t believe me, take my explanation to your nearest Economics professor, and ask her whether or not there’s any flaw in the causal chain I’ve outlined. Let us know the answer you get.
Don Joe,
Did you ever stop to consider the fact that Goldman Sacs has seen the same “supply-demand” change that I alluded to and consequently did what every responsible investment firm does?
You seem to want to dassle us with your vernacular, but in reality you really prove nothing with your comments.
This is the problem with some that want to create these “highly complex” theories, when simple explanations really tell it best.
Mac 106 – It becomes MY fucking business when she hands her fucking bills to me to pay because she’s too fucking irresponsible to manage her own affairs.
She CHOSE to get knocked up six fucking times. She should bear 100% of the cost of HER fucking decisions.
JCH:
You are not a retired naval officer.
You are caught lying, yet again.
I’ll post the answes for you since you have no clue.
Here’s the secanrio:
You’re the OOD, it’s 2:30 am and you’re at GQ under hostile conditions. In the aft missile house a conventional surface-to-air missile becomes stuck in the missile house doors leaving the doors ajar on a twin missile launcher. Answer the following questions.
A) Who has the conn?
Whenever a ship is at GQ, or General Quarters (battle stations for you non-naval types) The Captain of the ship has the conn. Any qualifed Officer Of the Deck would know this because he relinquishes the conn at GQ while the OOD goes to his BATTLE STATION!!!
B) What is the material condition of your ship?
Again, basic stuff that all hands know, even a Seamen Recruit. The material condition of your ship at GQ is “Zebra.” This means all hatches, scuttles, overboard vales etc are CLOSED to provide maxium water tight integrity. Since the scenario is 2:30 am it means you are steaming at night, dumb ass, which set an additional material condition, DARKEN SHIP! A white light can be spotted from many miles away at sea. So your true material condition is DZ or Dog Zebra!! I don’t care what kind of ship you sailed on you should KNOW THIS!!!!
C) Which group would be tasked with the repair?
AFT MISSLE HOUSE, Mr. Craig, you are at GQ who does repairs under these conditions?? REPAIR LOCKER 3!! All naval vessels have at LEAST 3 Repair Lockers, Rep 3 always, ALWAYS takes care of the aft section of the ship. Rep 2 forward and Rep 5 is for propulsion. THERE IS NO WAY someone standing as OOD would not know this just in case there is an emergency at sea on YOUR watch, Mr. Craig! Carries have all 6 rep lockers. But how would you know that, you never made it past ROTC.
D) Can you fire a missile off the other missile rail to defeat an incoming hostile aircraft?“ JCH, here’s where you really blew it by dwelling on this answer. You obviously have never seen a missile launch at sea, otherwise you’d know how badly the entire aft end of the ship is burned right down to the metal. Watch some clips on CNN some time, you’ll get the idea. Having that much fire and toxic exhaust rushing into your missile house would create a serious fire hazard in your missile house just above the missile ring storage compartment. And the poisonus gasses would kill your crew manning the missile house. The answer, Mr. Craig, is that you have an inoperable missile battery and you must turn your ship at least 20 degrees to use your forward missile battery because neither missile battery can fire directly over the keel of the ship!!
OK, JCH, you’re dismissed.
YO, FUCK YOU!
Jaybo,
“Did you ever stop to consider the fact that Goldman Sacs has seen the same “supply-demand” change that I alluded to and consequently did what every responsible investment firm does?”
Well, that does seem to be the question. Why would changes in crude oil stockpiles induce Goldman Sachs to change the composition of the GSCI? Ought not the GSCI reflect the relative importance of those commodities in terms of the overall performance of the Economy?
Standard & Poor changed the composition of the S&P 500, because the importance of the relevant firms in the index vis-a-vis the Economy changed. How did the importance of oil suddently change vis-a-vis the Economy?
Or did you manage to forget that we’re talking about a change in a published index and not an investment recommendation?
And, no, this isn’t really all that complex. I don’t know why you would quote the phrase “highly complex,” because it’s not a phrase I’ve used. Indeed, I’m hard pressed to understand exactly what about my explanation of the effects of futures prices might be considered complex.
So, it would seem that your only substantive complaint is about my vocabulary. Well, I’m sorry that I know and use words you don’t understand. That’s what dictionaries are for.
GBS, I think you need help. You ask questions, and then answer them, all in the same post. There will be no more questions, as you don’t read or understand my answers. My service [repeat] was in the “gator freighter” Newport LST navy. Lots of Marines, trasportation of SEAL and SeaBee equipment [causeways], and lot of runs to Okinawa [White Beach, Camp Hanson, Camp Schwabe] from Subic Bay and back. Our weapons were 3 inch 50s with directors removed [LOS targeting]. I note you ask the same questions over and over again to attempt to question my military service. As an E-3, you are to work and question nothing. JCH, [LT, USN 77-84]
BTW, GBS, as an E-3, stay out of secure spaces. “Need to know”.
That was your last question, E-3 GBS. Report to your LPO ASAP!!!
Don Joe @ 122:
“Did you ever stop to consider the fact that Goldman Sacs has seen the same “supply-demand” change that I alluded to and consequently did what every responsible investment firm does?”
Well, that does seem to be the question. Why would changes in crude oil stockpiles induce Goldman Sachs to change the composition of the GSCI? Ought not the GSCI reflect the relative importance of those commodities in terms of the overall performance of the Economy?
Interesting question. I can’t speak for gasoline, but I know a little bit about crude awl which was drilled into me by a good friend who spent six years of his life picking through the Exxon Valdez lawsuit. (He was on the Side of Evil for a big downtown law firm, but that’s irrelevant to this story).
You see the spot price for West Texas Intermediate on the crawl. You may figure that means something. It does, and it doesn’t. The oil market is not like the stock market. When you see a price for a stock on the crawl, you know if you call your broker or log on to your favorite trading website, you will pay pretty close to that price to purchase a block of stock. The oil market is not nearly as transparent.
Think of oil like airplane tickets. The spot price is the price you pay if you show up at Sea-Tac and say “I have to be on the next plane to LA”. They will smile, you will break out your plutonium card, and you will shed a little tear at your bad luck.
Very few people pay these prices for airplane tickets, and very few people pay that price for oil. The vast majority of the worldwide petroleum market is done in private contracts between producers and retailers.
In the simplest case, the contract will be for six to twelve months between a producer and a refiner, and will be some multiplier of the spot price on the day that the contract is negotiated.
On the other end of the spectrum (say, I own a piece of land that has oil on it. I have no petrochemical expertise, nor am I interested in acquiring any. I want someone to come in, drill a well, and send me checks), the contract may be negotiated for 10 years or more in order to protect the energy company’s investment in exploration, etc. The price I receive for “my” oil will be dramatically below the spot price.
So when you ask “should the weighting for gasoline be the same as its importance in the global economy?”, there are (at least) two possible answers. One is “Should the weighting for gasoline be the same as the total value of gasoline throughout the global economy?”, in which case the drop in the share of gas is rather strange. The other is “Should the weighting for gasoline be the same as the quantity of gasoline which is bought and sold on the spot market?”, in which case the rebalancing might make more sense.
I do not play in the commodities market at all, so take anything I say with a pound or two of salt.
By the way, can someone find a link to the original Financial Times article please? A search of the FT website, Proquest, and a few other databases turned up bupkis.
Jsa,
Good post. I hadn’t gotten into the details of spot vs. futures prices for commodities, because they can be somewhat distracting to the question at hand.
But, you’re right in that the phrase “overall importance to the Economy” is rather vague. One would expect that the particular weighting of any futures price in the index is trying to capture how changes in the Economy would affect futures prices of that commodity vis-a-vis futures prices of other commodities in the index. In that sense, it’s not about the “value” of gasoline (actually, we’re talking about crude oil, but that’s not overly germane) regardless of how you want to define the word “value”.
Let’s remember the whole point of the index. It’s to provide small investors a way to add commodities to an investment portfolio that will also track stocks, bonds and the money market. So, why would investors want to change the relative percentages of those investment categories? If commodities funds are affected by the same factors that affect, say, stock funds, then what’s the point of the index? (I suppose one could be cynical, and say that the index exists as a means for fund managers to come up with yet another way to get commissions, but I guess I’m just not that cynical.)
In any event, I suspect, though I’m not at all certain, that the specific weightings for these commodities will correlate with the various price elasticities of _supply_ for these commodities. As far as I can tell, that’s the only thing that really makes sense. And, yes, that does brook the notion that Goldman Sachs changed the GSCI weightings in response to some actually perceived changes in the price elasticity of supply, but one would want to see the actual numbers.
If the US continues its policy and operations as they are now the situation will worsen and the enemies of the US—principally al Qaeda and Iran—will continue to strengthen. Washington needs to either get serious about the battle on the ground – physically against al Qaeda and the insurgency—and commit the troops that the commanders need, or they had better look for alternative solutions. At the end of the day what they’re facing is the potential of most of this country being ruled by a Shia-led theocracy-style government, with other parts of the government left as the Al Qaeda West desert training camp. To avoid that, something radical MUST be done. So Colin Powell is right; staying the course only strengthens America’s enemies.
JCH,
For once we agree; there will be no more questions because you have never served in the United States Navy. Period. I don’t need to ask you any more questions to determine if you served or not. Clearly, you did NOT!
Your knowledge on the very basics of seamanship and damage control that is common to ALL US Naval ships is sorely lacking. Gator Navy not withstanding.
Being at GQ means your ship’s material condition is set at condition “Zebra.” You did not know that. You also did not know that going to GQ at 2:30 am your ships material condition is Dog Zebra, Darken ship!
That is common to every single ship in the United States Navy. One of the first things every sailor learns when coming on board any US Navy ship is DC and what they mean. Even the nub fresh out of boot camp!! Given the level of weekly drills all naval ships do at sea, you’ve proven you just simply don’t know what happens when a ship is “haze gray and underway.”
Whether or not you are familiar with missile systems, you lack the understanding of how these weapon systems operate and what the consequences are of exposing the inside of your ship to high intensity flames exiting a missile and toxic gasses they produce. Particularly given the fact that the scenario I described specifically indicated that this is an ordinance space. Dumb ASS!
But the capper, you had no idea that when a ship goes to battle conditions that the Captain of the ship must be in control of the bridge and CIC which are always adjacent to each other and therefore, the skipper has the conn.
You are, without reservation, a wannabe military man. And, now you want to do what all Republicans want to do when the going gets tough; CUT-AND-RUN!! Just like Reagan did when the terrorist blew up our Marine barracks.
“I won’t be answering any more questions GBS wahhhhh, wahhhhh!”
Pussy!
JCH, Just a Civilian Hack!
Tell the truth, you WANTED to be a military MAN, but you just couldn’t cut it in your ROTC class and they dismissed your sorry ass didn’t they!
Yeah, that’s the only logical explanation as to why someone who claims they’re OOD qualified has no idea that Rep 3 makes repairs in the aft section of the ship when the ship is at battle stations.
See ya, Runner.
GBS,
a lot of fine work, deflating John’s carfully built internal fantasy. I hope you are satisfied.
We in his family came to regard this latest personality construct as largely benign. Once this fantasy identity set in, the self-mutilation and night screaming largely subsided. We have been very grateful. If you only could appreciate how beneficial it has been for John to be able to retreat into this imaginary world of his, you might be more understanding. If you persist in challenging him, he may de-resolve again, or worse, adopt another, more self-destructive personality. And your work will never be done.
You will never be able to reason with him. His mind is gone. It is of no more use trying to debate with him, than it would be trying to debate with a schizophrenic street person living under a bridge.
It’s a sad story. But his family has come to accept his condition with equanimity. We love him in our own way. As much as anything, we love the memory of the bright, cheerful boy he once was. We cling to memories of the limitless potential he once held. We try not to think about his terrible descent into madness, and what it has cost him. How do we deal with John? With patience, and sympathy, to be sure.
But mostly we ignore him. And we urge you to do the same.
You know, if Kirk Fordham’s story about going to the House leadership back in 2003 about Rep. Foley is true, and he says he has phone records and e-mails to back it up, then every member of the House leadership has been lying outright to the American people from the beginning of this thing, including the guys (I’m lookin’ at YOU, Boehner) who had more than one story. Think about that for a minute.
Mrs. Craig @ 131:
I certainly understand your dilemma. I’ll acquiesce to your request because it’s apparent that little Johnny’s truth problem are not hereditary since you are being so open and honest.
Now that I know your little Johnny is retarded I’ll let up on him. In fact, I’m sure in his own way he did serve in the “navy” you created for him in the backyard puddles.
From now on we’ll all think of little Johnny as a puddle pirate.
Arrrrggghhhh! Little Johnny you’re a fine sailor. Back when ships were made of wood and the men were made of steel.
How’s that Mrs. Craig?
Thanks, GBS. That should be fine.
We’ve found that mocking John does very little to disturb his personality constructs. He usually reacts defensively. And his arguments in self-defense usually reinforce the internal fantasy.
So have at it, and enjoy!
Don Joe @ 127:
Thanks for writing back. Your post was enlightening.
I suppose the part that I’m missing are the fundamentals of what makes a good index. Yes, the goal is to create a balanced basket of stocks, commodities, what have you that are reflective of broader things (i.e. the basic health of the economy). However, how the great and good at Standard & Poors or Goldman Sachs determine these basket balances, and how you can look a particular basket and say “yes, that makes sense” or “no, that looks like shenanigans” is far afield from things I know about.
I am Republican – I lie, steal and cheat.