Can someone educate me on why the price of gas is low right now?

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Call me a skeptic, but I have long felt gas prices are manipulated by the oil companies. With the gulf oil spill, drilling being put on hold, etc. one would think short term oil availability is limited and the price would be going up. Can someone make sense out of this for me?

Thanks,

Bob

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pagerbob
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Jul. 31, 2007 4:01 pm

Comments

This just proves that your beliefs are wrong.

The price of gasoline is dictated by the free trade concept called “supply and demand”

Deal with it, and learn from your mistakes.

kulak.2.1
Joined:
Mar. 31, 2010 6:39 pm

Supply/demand plays a role. Energy use is down because of slowed economic activity. That lowers the price.

However...Futures Market specuation can drive the price of oil through the roof...regardless of demand. We saw that when gas hit $4 a gallon+....when reserves were at their highest levels in years...a domestic oil glut. Offer to buy oil in 30 days at a higher futures price, and the price of oil goes up. Take out a derivative bet that oil won't rise, and it covers a loss it the price increase isn't sustained. Either way, a profit is made as long as there isn't a substanial and quick collapse of the market.. An oil/derivative play..

When the speculative bubbles begin to collapse and profits taken, the price of oil becomes more in line with actual demand.

A reverse tactic was used to bring down Greece with a bond/derivative play...very profitably. Driving bonds down rather than up. It doubled what Greece has to pay to finance day-to-day operations....something all nations do, even Norway that has no deficits and a Sovereign Wealth Fund large enough to pay off the deficit of the U.K. with cash left over.

Wall St. is a predator on the economies/peoples of the world.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

Read an article on the economy where it argued that gas prices rose because of futures bidding and the games the banksters and investment crooks played. How much longer will we put up with these shenanigans?

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captbebops
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Jul. 31, 2007 4:01 pm

Like I noted above, Capt., Wall St. is a predator on the economies/peoples of the world. I tried to explain how it's done in a rather short statement for something that's pretty complex...

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm
Quote kulak.2.1:

This just proves that your beliefs are wrong.

The price of gasoline is dictated by the free trade concept called “supply and demand”

Deal with it, and learn from your mistakes.

Taking a bath in the free trade kool aid are we.

There is no reason for the price of oil to be down, especially on this holiday weekend.

I am convinced that it is being held down to keep public opinion as positive as possible in light of oil refinery fires and the gulf oil volcano.

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spankycrissy
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Jul. 31, 2007 4:01 pm

I agree with you spankycrissy! Free Trade is great for the multi-nationals but not for the middle class in America.

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pagerbob
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Quote kulak.2.1:

This just proves that your beliefs are wrong.

The price of gasoline is dictated by the free trade concept called “supply and demand”

Deal with it, and learn from your mistakes.

Supply/demand play a role Kulak. And so does the Futures Market. Gambling.

When banksters or financiers drive up the price of oil in the futures market, placing a buy offer for delivery/payment in 30 days, they have no intention of taking delivery of the oil. Bank vaults just won't hold millions of gallons of the stuff. Futures paper is traded just as readily as stocks or derivatives. The end buyer of the futures contract accepts delivery. The oil co. refinery.

An oil co. refinery makes more with a 10% mark-up on $100 a barrel oil than they would with a 10% mark-up on a $40 barrel of oil..

Banksters/financiers win...oil co.refineries win. Everyone else loses.

If bankster/financiers had enough clout to bid up delivery price to $1,000 a barrel..that's what they'd do and the end buyer would have to pay that. However, It's bid up only to the maximum price consumer's can ultimately pay for it. Afterall, the financiers/banksters do need to peddle the futures contract before delivery of oil comes due. They have no way to store the oil. It's a balancing act.

We don't have a "free market" economy, Kulak. We have a "manipulated market" economy. As Adam Smith noted, "when there are concentrations of economic/productive wealth, free markets can't exist.

In a down economy, it's too risky to speculate on oil. Laws of supply/demand are coming into effect. The global downturn has diminished demand for oil. Consumers (economies) can't buy all the production at a high price. When demand increases...or if an economic recovery looks real, expect speculators to jump in with both feet...again. Currently, the most profitable use of "capital" is to bring down nation states by shorting their bonds and making derivative plays in conjuction with it..

If you want to become a billionaire, give up on ideology and get how things actually work. That's how a once penniless George Soros did it.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

The price of gas is low because the hypnotoad says it is. The hypnotoad is the all powerful public relations agent of The Powers That Be.

Check it out if you don't believe me.

Poor Richard

Poor Richard's Almanack 2010

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Poor Richard
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Polycarp2 do you think futures trading should be outlawed? Also I notice that you tend to focus on one side of it, what about the producers who are willing to sell now to hedge against future price volatility? Ultimately doesn't the futures market serve the producers of a product more than the speculators, and if not why don't the producers merely refuse to sell the futures contracts and bear the risk on their own?

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tmoney13
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danieladamsmith
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Jul. 31, 2007 4:01 pm

Not all petroleum production is sold in the futures market. Oil is also sold in the spot market.

When oil in the spot market is more expensive than the futures contract, speculators win and oil producers lose.

When the spot market price is lower than the futures price, oil producers win and speculators lose.

Over the long term, the winnings of speculators and producers more or less balance out.

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BcDct
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May. 28, 2010 3:27 pm
Quote tmoney13:

Polycarp2 do you think futures trading should be outlawed? Also I notice that you tend to focus on one side of it, what about the producers who are willing to sell now to hedge against future price volatility? Ultimately doesn't the futures market serve the producers of a product more than the speculators, and if not why don't the producers merely refuse to sell the futures contracts and bear the risk on their own?

How To Make Your First Billion:

Futures contracts are fine on their own. It's when they're used in conjunction with derivative plays that the problem comes in. Everyone knows who bids on a futures contract. It's public. Derivative plays are secret.

A financier can bid up the price of an oil futures contract ...and for pennies on the dollar take out insurance on it. Bet that it will go down. He'll have plenty of takers if he bids the price up..daily/weekly.. Investors will see rising oil prices...not falling ones, and snap up the derivative bet.

He can then sell his futures contracts at a much lower price. Flood the market with them..Take the loss on the futures contracts, driving down the price of oil....and make a bundle on the derivative play that more than makes up for the futures contract losses. Since derivative plays aren't public, the ploys to manipulate a market aren't uncovered. The derivative player isn't connected as being the futures buyer/seller until after the fact. It's perfectly legal.

.After he sells futures at a loss (making the greater profit on a derivative play) He can bid oil futures up again. Repeating the cycle.

It works in stocks, works in bonds...works on any financial paper. That's what brought down Greece.

Offer to sell a huge number of bonds you don't own at a lower price in the future than they are worth. It's called an uncovered short...legal.. (Suddenly made illegal in Germany) Take out a derivative play their value will go down before you short them. As soon as the massive short is made, they drop in value and the derivative debt is collectable. People panic at the rapid drop in bond value....and sell. Further lowering their value.The bonds can be worth less than they were offered for as a short sale. Snap up the bonds at a bargain to cover their shorted price. A double profit. One on the short sale...one on the derivative bet. Banks holding Greek bonds suddently had near worthless assets...and had to be bailed. The Euro started to collapse.

It made Greek bonds nearly worthless....and they could no longer sell them to cover their expenditures. . Higher interest rates on now lousy bonds made Greece incapable of covering costs of government. It's called free market capitalism. It's destructive.

If derivative plays were public it would at least expose the schemes before the fact rather than after and give people a chance to protect themselves if they were paying attention .

Wealth accumulations are so large, and concentrations of it so huge in the largest banks.... plays such as those are now possible. The markets (including oil) are manipulated. Surely you don't think banksters are getting billion dollar bonuses from making loans in an economy that isn't borrowing.

Congress refrained from making derivative plays public in the Financial Reform Act...at the request of the banksters. The next engineered collapse will be where? My guess is Spain.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

Polycarp2, I am somewhat aware (at least theoretically, not in practice) of the futures/derivative play, but the people selling the derivatives (insurance) against a loss in value on an item are big banks as well. This is a little like the premise of the book The Big Short by Michael Lewis. A few guys who saw the housing market about to collapse took out large bets against the housing market and cashed in, the people selling the insurance (and often holding) were large banks. I see how one could make money off this play (not necessarily as guaranteed as you make it seem), however, I don't see how this generally affects joe public outside of comodity price swings, unless of course, the losers of the bad bet get bailed out. In mid/late 2007 oil was near $70 it then proceeded to spike around $130 in 2008 before coming back down to the $35 range in 2009. http://futures.tradingcharts.com/chart/CO/M Granted $4.00/gal gas sucks for those of us who drive, but no one was complaining when it came back down to under $2.00 which was below its 2007 price. http://gasbuddy.com/gb_retail_price_chart.aspx

My point is that ultimately it is a zero sum game, so I am struggling to see how this affects the average American (or Canadian, or whatever)

polycarp2: Wealth accumulations are so large, and concentrations of it so huge in the largest banks.... plays such as those are now possible. The markets (including oil) are manipulated. Surely you don't think banksters are getting billion dollar bonuses from making loans in an economy that isn't borrowing. - C'mon this is a very vague statement, what is the operational definition of "so large"? Also banker's bonuses have little to do with the context of what we are discussing, it is more a question of contractual employment agreements. Personally I don't care what anyone makes other than myself. .

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tmoney13
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May. 1, 2010 2:20 pm

TMoney13 wrote: "My point is that ultimately it is a zero sum game, so I am struggling to see how this affects the average American (or Canadian, or whatever)"

-----

If the $4+ per gallon gasoline didn't effect you, you must be wallowing in money.

The Greek fiasco stripped Greeks of their pensions. Banksters get it. It effected Greeks.

The several trillion bucks in the U.S. Soc. Security Trust Fund is a pretty big prize to aim for. First, the banksters and financiers have to increase their capital.

After Spain, Ireland and Portugal...on to the big European prize..... the gold reserves of Germany. As in Greece, their populations will be put on austerity programs and high taxes to pay the banksters. After Europe...enough wealth accumulation for a financial derivatives/bond attack on the U.S. Afterall, they are bound by law to increase profits as much as possible.

Zero sum game? Zero sum games are wealth transfers. Transfer a trillion from one pocket to another...it's a zero sum game. The trillion remains...neither increasing or decreasing....just in another pocket. And it does have effects on the empty pocket. Ask the Greeks.

IRetired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

Gas prices are only cheap if you live in America and some Middle Eastern nations.

Here in the UK gas prices are the same as they were in summer 2008, remember when oil was about $150/barrel???! Of course over here much of the price is tax, which is then invested back into the economy.

In America, you don't have much option to using your car, so if gas prices were the equivalent to what they are in Britain (= to $7/gallon) most people would be in for a REAL hardship.

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meljomur
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Jul. 31, 2007 4:01 pm

Polycarp2, I admitted that $4/gal gas sucks for those of us who drive including me, so I don’t know why you are accusing me of wallowing in money which is hardly the case. For the record I hold a mid level engineering job so I am not exactly killing it if you know what I mean, but even if I was I don't see how that is relevant to our discussion. By all accounts and measures I am middle class. My point was that while speculators were driving up oil and therefore gas price that ultimately this is not sustainable and the market corrected itself and brought the price back below the 2007 price before the run up began. This was the point of attaching the links to the two graphs which showed oil and gasoline prices over time. While you seem quick to vilify speculators for driving up prices, you don’t give recognition to when price was driven lower.

I am not completely aware of the details of the austerity measures being put upon Greece, so I am not sure if your claim about pensions being “stripped” is accurate. Maybe reduced, or new pensions being limited? I would like to see some information if you have it. The article I reference below mentions tax increases and tighter retirement rules, but that sounds different from stirpped pensions.

I am well aware of what a zero sum game is. The wealth transfer that took place was essentially between banks and/or financiers betting on or against the Greek bonds, the Euro, or derivatives there of. It is not like money was stolen from Greeks as you would like people to think. Essentially there was a crisis of confidence in the ability of Greece to repay its debts. If the Greeks had their own currency it could have been devalued, which would make Greek products and services cheaper and the market would eventually correct itself as it did with the oil example. As Greece does not have their own currency they were bailed out, and the Euro has suffered for it. What is important to note is how Greece got to this point, which is summed well from the last paragraph of an article from the NYT.

http://www.nytimes.com/2010/05/07/world/europe/07greece.html

But in a sign of the challenges ahead, few were willing to take responsibility for the profligacy of a country where tax evasion is rampant and a spending spree by successive governments has led to nearly $400 billion in debt.”

Greece fudged their numbers to get into the EU and Greece has been living a lie ever since. Eventually the lie could not be sustained and the time came to “pay the piper”. While this obviously has an adverse affect on Greeks now, let’s not forget that the Greeks were living above their true means for many years while riding the European coattails of more productive countries like Germany who keep the Euro propped up. This could not be sustained and the market corrected itself.

As far as the US Social Sec. Trust Fund (which is a huge misnomer) I suspect that someday we too will have to “pay the piper” for living a lie that can not be sustained. I suggest that every American take as many measures as possible to plan for this, before we find ourselves living our own Greek tragedy.

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tmoney13
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May. 1, 2010 2:20 pm

What the NY Times article fails to note is that those who could pay taxes, Greek elites...didn't. That should sound familiar. The U.S. is in financial pits...with only a 15% tax on billion dollar bonuses. Working stiffs should be so fortunate to have that tax rate..

The banksters were issuing sub-prime loans on a nation-state scale...and placing bets on them. Same old garbage. Next up... Spain. The Greek economy is being mined to the hilt....it now owes it to the banksters.

http://www.atimes.com/atimes/Global_Economy/LE21Dj07.html

If economies begin recovering enough to increase demand for oil...speculators will push it through the roof....again. They can't do that now. It's obvious demand is down. Derivative players would know they were being played for fools.

Greece has the same problem the Baltic States do...they used a currency not under their own control. Debt, even mortgages in the Baltic States, are denominated in foreign currencies.

Greece can't devalue their currency and pay it off in cheaper Drachmas. The same problem all EU members face. It's a flaw in the Euro. The U.K. was wise to retain the Pound.

If it was a zero sum game not effecting the U.S., we wouldn't be scrambling with a trillion bucks to save the Euro from collapse, and right along with it, Western Europe. The global financial system is still on life support...and banksters keep pulling the plugs.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

Polycarp2: What the NY Times article fails to note is that those who could pay taxes, Greek elites...didn't. That should sound familiar. The U.S. is in financial pits...with only a 15% tax on billion dollar bonuses. Working stiffs should be so fortunate to have that tax rate.. - actually this was mentioned (tax evasion) in the last paragraph that I highlighted in my previous post. Also there is a world of difference between tax evasion and a tax structure that "only" takes 15% on bonuses.

Polycarp2: The banksters were issuing sub-prime loans on a nation-state scale...and placing bets on them. Same old garbage. Next up... Spain. The Greek economy is being mined to the hilt....it now owes it to the banksters. -actually I don't think this is true, it was pretty much the premise of the book I mentioned The Big Short that many large firms were betting that the CDOs would be good, and it was only a few players who could see the implosion that was about to happen that made the appropriate hedge against it. The few players who first saw it were pretty small time, by and large Wall St. was not investigating the ratings that Moody's was putting on the CDOs, and was caught off guard when the sub-prime implosion hit. That is why they needed a bailout.

Polycarp2: Greece can't devalue their currency and pay it off in cheaper Drachmas. The same problem all EU members face. It's a flaw in the Euro. The U.K. was wise to retain the Pound. - I am not sure if you are trying to make a point here, or if we are misunderstanding each other, but either way, I realize that Greece can not devalue their currency, as they are part of the Euro. I was saying if they could, meaning that they were using New Drachmas or something, then the market would be allowed to correct itself overtime. In essense I think we are in agreeance.

Polycarp2: If it was a zero sum game not effecting the U.S., we wouldn't be scrambling with a trillion bucks to save the Euro from collapse, and right along with it, Western Europe. The global financial system is still on life support...and banksters keep pulling the plugs. - First, I think it would be helpful if you qualified what you mean by "banksters". Are you talking about the Federal Reserve, or are you talking about lending institutions, or are you talking about the big players that got bailouts, or are you lumping all banking and investment companies into one category. With regards to the trillion bucks to save the Euro, you must certainly be talking about the Fed. In which case, the forced devaluation of our currency to help the Euro, has nothing to do with the zero sum game I am refering to. This is one of many reasons that I disapprove of our Fed banking system. They have the power to steal from one group (us) to make another group whole, but that act of theft has no legitimate purpose within the context of our discussion of a zero sum game. I could care less who makes what bets on what commodities as long as they can be paid, and if they can't then let civil and criminal charges flow from it. The Fed stealing from the American people irrespective of the reason is wrong. I think you are really conflating the two issues which I see as being exclusive. Assuming that I have an appropriate understanding of what you mean by "banksters". The trouble wasn't the wagers made, it was the bailing out of those who made the wager that they couldn't pay.

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tmoney13
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May. 1, 2010 2:20 pm

Actually, the trouble is with the wagers made. When they can't be paid, governments bail them to avoid collapse of finance. If the wagers weren't legal, that wouldn't happen.

It was wagers on sub-prime mortgages that brough about our own mess....wagers on the economies of other nations that are creating theirs.

And it's all a zero sum game that you say don't effect individuals. It does. Severe economic downturns effect a lot of individuals.

Sub-prime mortgages and wagers on them...sub-prime national loans and wagers on them. Wagers get bailed to save banksters. Wagers drove Greek bonds down, requiring banks holding them to be bailed. Same thing. Read Liu's article.

When Soros made wagers on the Pound, he brought the Bank of England to it's knees and made a quick billion bucks. A battle of money. Soros had access to more of it to bring down the pound than the Bank of England had to defend it. That effected everyone living in the U.K....and it was a zereo sum game.

When finance has access to more money than mere nation states, the nation state loses.

I noted the problems of Greece using the Euro weeks ago...and just re-iterated it here. A similar thing in Argentina when their currency was pegged to the dollar. Both currencies being used interchangeably...and debt coming to be denominated in dollars rather than the Argentine Peso.

When neo-liberal policies collapsed the Argentine economy, Argentina took the option of de-coupling, and was still stuck with debt denominated in dollars. They repudiated the debt, repudiated neo-liberalism, and quickly recovered.

Greece should opt out of the Euro, repudiate a portion of their debt and re-structure the rest.

Bailing the banksters isn't new. Goldman Sachs and Citibank were bailed in the Mexican debt crises...holding worthless bonds. Same thing banks are undergoing with Greek debt. The loans never should have been made in the first place. Sub-prime loons should never have been made in the first place. However, since banksters know they'll be bailed...why not?

Goldman Sachs bundled sub-prime loans, knowing they would fail, and sold them to their clients as securities...then took out derivative bets they would fail. Since they were rated triple-AAA, derivative bets were snaped up. Nearly $11 trillion in guarantees by the taxpayer are still propping up the toxins to avoid collapse of the financial sector. Nothing but scams. Now the same bull is being applied against nation states.

The global financial system is on life support, and banksters/financiers keep pulling the plug. You'll be effected by that.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

tmoney13, you must be the only person in the world not on Wall St. who does not get what "bankster" means and who they are.

Those who play with other people's money and who use money to make money without investing in real economic activity devalue the real economy by devaluing the currency. They put water in the blood of the economic body and take their vampire "profits" to their castle coffins.

David Korten explains why we do not need a Wall St. casino in AGENDA FOR A NEW ECONOMY.

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DRC
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Jul. 31, 2007 4:01 pm

I should start a new post with this but this is as good a place as any.

IT IS ALL ABOUT THE MONEY!

Answering your question with a question; Why do oil companies burn off most of the natural gas produced from oil wells?

Answer, To keep the price of natural gas high.

There is no number available for the quantity of wasted fuel that is burned off in the "FLARING PROCESS". But the quantity is monumental!

These flares are started as soon as the well comes in and continue for the life of the well.

How many gigawatts of power is being sent up in smoke that could be making electricity and powering cars?

This should be a crime!

Here are a few links to flares.

Gas flares on oil rigs.

http://www.google.com/imgres?imgurl=http://www.alaska-in-pictures.com/data/media/17/dolly-varden-gas-flare_3230.jpg&imgrefurl=http://www.alaska-in-pictures.com/dolly-varden-gas-flare-3230-pictures.htm&usg=__zLhVPdVGsggZqxDG9dYe6miIW4g=&h=315&w=468&sz=24&hl=en&start=31&sig2=2Uga66oVMEJ5cFry2ZvHSw&um=1&itbs=1&tbnid=shbPCyynvyLvmM:&tbnh=86&tbnw=128&prev=/images%3Fq%3Doil%2Brigs%2Bburning%2Boff%2Bgas%26start%3D20%26um%3D1%26hl%3Den%26sa%3DN%26rlz%3D1T4TSHB_en___US328%26ndsp%3D20%26tbs%3Disch:1&ei=mpcJTOi2CKOUMaLCnbYE

http://www.google.com/imgres?imgurl=http://depletedcranium.com/Ft_Sask_Flaring_2007_03_30_2.jpg&imgrefurl=http://depletedcranium.com/stuff-enviornmentalists-should-be-more-concerned-about/&usg=__YOaWd45AHTwXk1YbULT4zu5egnw=&h=384&w=341&sz=24&hl=en&start=43&sig2=2MIO4vnngmwzZlz7ZwQGAg&um=1&itbs=1&tbnid=z03nPvi9fWmspM:&tbnh=123&tbnw=109&prev=/images%3Fq%3Doil%2Brigs%2Bburning%2Boff%2Bgas%26start%3D40%26um%3D1%26hl%3Den%26sa%3DN%26rlz%3D1T4TSHB_en___US328%26ndsp%3D20%26tbs%3Disch:1&ei=GpgJTKyjIIm-Nvuu4bUE

http://www.google.com/imgres?imgurl=http://farm4.static.flickr.com/3140/2390156934_a194e0d820.jpg&imgrefurl=http://flickr.com/photos/emf1947/2390156934/&usg=__rDzDm_bfLBO-T8KruXGvWaOWhBc=&h=375&w=500&sz=127&hl=en&start=100&sig2=odtxgf3js0TOje80_TnG-A&um=1&itbs=1&tbnid=FKLlEaataHk-dM:&tbnh=98&tbnw=130&prev=/images%3Fq%3Doil%2Brigs%2Bburning%2Boff%2Bgas%26start%3D80%26um%3D1%26hl%3Den%26sa%3DN%26rlz%3D1T4TSHB_en___US328%26ndsp%3D20%26tbs%3Disch:1&ei=ApkJTIjVLpWyNo3UzLUE

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spankycrissy
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Jul. 31, 2007 4:01 pm

Polycarp2, I find it difficult to reason with you because you rarely answer questions. I am now quite sure that is by design. Please clarify who you are referring to when you use the term “banksters”.

Thanks for proving my point that you are conflating the issue of bailouts and wagers with their affect to the public. Polycarp2: “Actually, the trouble is with the wagers made. When they can't be paid, governments bail them to avoid collapse of finance. If the wagers weren't legal, that wouldn't happen.” The fact that you needed to qualify the argument that wagers affect the public when governments bail them out proves my point. Government bailouts are the issue, not the wagers being made. No one needed to bailout the speculators, let them collapse!! My point is further justified in the article below by Liu (the author you recommended that I read), that you either failed to read, or intentionally left out. I highlighted the pertinent info for your ease of reference.

http://www.atimes.com/atimes/Global_Economy/LD21Dj01.html

What about systemic risk? Yes, if government had allowed markets to operate as Bear [Stearns] and Lehman [Brothers] went down, all of the big financial institutions would also have been brought down. As Bernanke now apparently realizes, that would have been a good thing. The market would have accomplished what Bernanke now professes to desire: resolving the problem of "too big to fail". We would have been left only with smallish institutions - those not too big to fail. And as [Roger] Lowenstein forcefully argues, those big financial institutions do very little that is desirable from a public purpose perspective. Whatever good they do accomplish can just as easily be done by small institutions or directly by government where the market fails.

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tmoney13
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May. 1, 2010 2:20 pm
Quote DRC:

tmoney13, you must be the only person in the world not on Wall St. who does not get what "bankster" means and who they are.

Those who play with other people's money and who use money to make money without investing in real economic activity devalue the real economy by devaluing the currency. They put water in the blood of the economic body and take their vampire "profits" to their castle coffins.

DRC, you defined a species of economic parasite, not a bankster. Parasitism isn't usually a crime.

Banker + gangster = bankster

Banksters are criminals.

Poor Richard

"Progressive Framing"

"Green Free-enterprise"

"Town Hall Meeting: Class War, Culture War, or Holy War?"

Poor Richard's Almanack 2010

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Poor Richard
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Jul. 31, 2007 4:01 pm

Poor Richard and DRC, I appreciate your help in defining "bankster". I don't pretend to assume that I will get a response from Poly. I am assuming then that Bear, Lehman, BofA, Citi, Goldman, AIG, etc are the main culprits bankster-ism.

DRC: Those who play with other people's money and who use money to make money without investing in real economic activity devalue the real economy by devaluing the currency. They put water in the blood of the economic body and take their vampire "profits" to their castle coffins - does this include small banks that extend credit, as they are making money off of money by receipt of interest payments? Also playing with other people's money without investing in "real" (whatever that is) economic activity does nothing to the currency. Our currency is based solely on confidence nothing more. It is concievable, in theory, to have a whole nation of people who produce nothing tangible or physical and have a stable currency.

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tmoney13
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May. 1, 2010 2:20 pm
Quote tmoney13:

Poor Richard and DRC, I appreciate your help in defining "bankster". I don't pretend to assume that I will get a response from Poly. I am assuming then that Bear, Lehman, BofA, Citi, Goldman, AIG, etc are the main culprits bankster-ism.

- does this include small banks that extend credit, as they are making money off of money by receipt of interest payments?

Not all bankers are banksters. In the absence of progressive institutions to provide credit at cost, traditional for-profit banking serves a community need. Bankers become banksters when they behave too antisocially: excessive interest, redlining, fraudulent lending schemes (as with Savings and Loan scandal), Las Vegas gambling with deposits, and all the other proto-criminal (not presently criminal but should be) activity of the "banks in name only" that you mentioned.

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Poor Richard, thanks again for further defining banksters, and I can (to an extent) agree with what you are saying, so wouldn't the best solution have been to let the anti-social banks a.k.a banksters go under? For me this is really the crux of the issue, I could care less what involvement any one particular bank had in any of the anti-social behavior that you mentioned, as long as I as a taxpayer do not have to support them when they go bust. Now, however, we have set a precedent and in my mind increased moral hazard for the same set of circumstances to reoccur in the future. Speculation in and of itself does not increase prices overall. There is going to be as many items that get shorted as their are longs. It is a zero sum game as I have mentioned to previously. While this will cause price fluctuation, it does not mean that prices rise. Prices may rise for a short time on a particular item, but overall the affect of speculation on price is nil. Speculation does provide some positives however, which is that it increases market information, and liquidity.

I can understand why people might hate the banksters, to which I would reply don't do business with those institutions, but in actuality it is Paulson, Bernanke, Geitner, Bush and Barrack that you should be angry with for stealing your money to give to them.

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Tmoney13 "It is a zero sum game as I have mentioned to previously. While this will cause price fluctuation, it does not mean that prices rise. Prices may rise for a short time on a particular item, but overall the affect of speculation on price is nil."

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Glad to know monetary wealth doesn't increase or decrease in the nation. It just gets transferred from one pocket to another. We've been undergoing the largest wealth transfer in the history of the world...and no good will come from that. Huge wealth transfers through speculation didn't work before....they won't now..

Poor Richard and TMoney13 playing good cop/bad cop won't change that.

Financial Meltdown 101 Video:

http://www.truthdig.com/dig/item/20081108_financial_meltdown_101/?ln

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Polycarp2, I am sorry but I was only able to choke down the first 3 clips of that capzles video presentation. Let me guess Reagan = bad, FDR = good, regulation saves the day? I figured out where this was going after Robert Sheer (not sure about spelling) spoke for 2 mins. As if I should take the opinion of some writer who covers economics vs. reading actual economists, if this was your hope to convince me, I am sorry but you have failed.

I am going to cut to the chase. I read the your article by Liu and countered with an article from the same author that substatiated my point. In regards to Greece, I provided an article that once again supported my point. I have referenced the book The Big Short, which supported the point I was making in regards to who was and was not making/losing money in the CDS and CDO markets, which was not Joe Public as you would have the audience here believe. The reason Joe Public had money transfered from them to the "banksters" was because our gracious corporatist government overlords said it was so. So feel free to keep repeating your mantra of wealth concentration, but lets be honest about who ultimately made that happen, our government.

-Your Ideology has become your disease.

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Quote polycarp2:

Glad to know monetary wealth doesn't increase or decrease in the nation. It just gets transferred from one pocket to another. We've been undergoing the largest wealth transfer in the history of the world...and no good will come from that. Huge wealth transfers through speculation didn't work before....they won't now..

Poor Richard and TMoney13 playing good cop/bad cop won't change that.

I was only addressing the narrower question of defining "bankster", but I agree with your point.

Wealth disparity is increasingly well documented as a proxy for many other metrics of social health and vitality, literally including the physical and mental health of the population.

The US ranks only 13th in the Human Development Index, "a comparative measure of life expectancy, literacy, education and standards of living for countries worldwide."

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Poor Richard: Wealth disparity is increasingly well documented as a proxy for many other metrics of social health and vitality, literally including the physical and mental health of the population.

tmoney13: So feel free to keep repeating your mantra of wealth concentration, but lets be honest about who ultimately made that happen, our government.

Fair enough, if you believe that wealth concentration is an issue, then go after those evil doers a.k.a the government.

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Quote tmoney13:

Fair enough, if you believe that wealth concentration is an issue, then go after those evil doers a.k.a the government.

Thanks for the advice. I will pass it along to anyone I find who is not aware of the problem of political corruption.

But I don't think you can blame all the concentration of wealth on the government. What about the people who grease the politician's palms to look the other way while they rob the commons of coal, oil, gold, timber, etc.? They aren't the government.

Do you blame the government for looking the other way but not also blame the one who does the burglary?

That would be a peculiar philosophy.

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Poor Richard, I agree that not all wealth concentration is due to government, and the psuedo capitalistic/corporatist/mixed economy that we have will quite naturally allow for wealth concentration. I will also say that I do not necessarily share the same disdain for wealth concentration as you and Poly, and many other Progressives seem to have. If I could see some hard data on the subject maybe I would change my mind. I am not even sure I know what one considers wealth concentration, what are the parameters, income, net worth, amount of property, etc. and what ratio is too concentrated? If the CEO of my company makes 250,000 and the average worker makes 25,000 is that too concentrated? I guess it all seems a bit fuzzy to me.

In short I blame both the burglar and the government, but I am not sure I buy into the idea of "the Commons" too much. I advocate strong property rights, and much like the idea of wealth concentration, the definition of "the Commons" has never really been explained very well to me. However, anyone who grease's a politician palm is naturally scum in my mind, and should be punished by law, but I think the politician is worse. A man who is trying to save the small company he runs may understandably try to gain influence with a politician. I don't condone this activity, but I can understand why he might do it. Whereas the politician has taken an oath and should be held to a higher standard.

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Quote tmoney13:

Poor Richard, I agree that not all wealth concentration is due to government, and the psuedo capitalistic/corporatist/mixed economy that we have will quite naturally allow for wealth concentration. I will also say that I do not necessarily share the same disdain for wealth concentration as you and Poly, and many other Progressives seem to have. If I could see some hard data on the subject maybe I would change my mind.

There is a small difference between wealth disparity and income disparity, and if you are willing to research the issues just google/wikipedia those terms. You can find info on all the questions you pose in just a few minutes. To get you stared, read these Wikipedia pages and follow the links you find there:

Concentration_of_wealth

Income inequality metrics

Quote tmoney13:In short I blame both the burglar and the government, but I am not sure I buy into the idea of "the Commons" too much. I advocate strong property rights, and much like the idea of wealth concentration, the definition of "the Commons" has never really been explained very well to me.

That's what Google and Wikipedia are for!

Wikipedia - Commons: "The commons were traditionally defined as the elements of the environment - forests, atmosphere, rivers, fisheries or grazing land - that we all share. These are the tangible and intangible aspects of the environment that no-one owns but everybody enjoys."

Think the Gulf of Mexico....

Quote tmoney13:However, anyone who grease's a politician palm is naturally scum in my mind, and should be punished by law, but I think the politician is worse. A man who is trying to save the small company he runs may understandably try to gain influence with a politician. I don't condone this activity, but I can understand why he might do it. Whereas the politician has taken an oath and should be held to a higher standard.

A good point and I completely agree.

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Poor Richard wrote: "There is a small difference between wealth disparity and income disparity,"

------------

The disparity of wealth between a billionaire and someone with little or no assets is pretty large. Ditto their incomes. You can correlate one with the other.

"For one to have more [money], someone else has to have less" - Friedman, "Money Mischief"

Those with less...are dividing up less and less. There comes a point where that is met with armed rebellion...as security agencies warned FDR when he first entered the White House. They gave him a year window.

He addressed the bubbled more to the top economy and saved American applied capitalism from American applied capitalism. It had collapsed. The have mores rightully envisioned being hung from the nearest lamp post...and got out of the way of change.

It would probably be best to not reach that point again. I abhor shooting in the streets.

If we didn't have FDR's Unemployment Ins., you'd have 15 million unemployed marching on government buildings with guns rather than with their unemployment ins. forms.

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polycarp2
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Quote polycarp2:

If we didn't have FDR's Unemployment Ins., you'd have 15 million unemployed marching on government buildings with guns rather than with their unemployment ins. forms.

Good point, which only goes to show there is still some effective, if draconian, tension/equillibrium between the corporate state and the masses. Either one can only go so far...

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Poor Richard, I skimmed the income inequality metrics on Wikipedia, below is paragraph from that.

Wikipedia - In their study for the World Institute for Development Economics Research, Giovanni Andrea Cornia and Julius Court (2001) reach slightly different conclusions.[15] The authors therefore recommend to pursue moderation also as to the distribution of wealth and particularly to avoid the extremes. Both very high egalitarianism and very high inequality cause slow growth. Considering the inequalities in economically well developed countries, public policy should target an ‘efficient inequality range’. The authors claim that such efficiency range roughly lies between the values of the Gini coefficients of 25 (the inequality value of a typical Northern European country) and 40 (that of countries such as the USA, France, Germany and the UK).

-so it seems to me we are in a pretty good spot, so now if we could just convince our governing overlords quite stealing from us and to leave us alone I imagine we will be just fine.

With regards to the commons, I read that as well, and I am going to have a tough time with that. I believe strongly in property rights and it seems that commons is a pretty loose word, which means that some self serving politician, could quickly determine that my lands should belong to "the commons". This may be in area we you and I will have to agree to disagree, but none the less, I still believe greasing politicians palms is wrong for whatever the reason.

Polycarp2 "For one to have more [money], someone else has to have less" - Friedman, "Money Mischief" - This point may be valid, if we lived in a world of constrained value, however, the pie is always increasing so while it is true that there is a finite amount of money (M) at any one point in time it does not mean that because I currently have X that everyone else shares M-X forever as you allude to in your next statement.

Polycarp2: Those with less...are dividing up less and less. There comes a point where that is met with armed rebellion...as security agencies warned FDR when he first entered the White House. They gave him a year window. - that point may never come as the pie is always expanding due to new innovations that constantly bring about more goods and services at a lower cost.

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The pie has been expanding for 30 years. The share of the pie has been getting larger for a few, much smaller for most. It's called falling or stagnant wages in real dollars.

In my younger years, the real wages from an hours work at min. wage bought 20 cups of coffee....now?

It bought a house and a new sportsdcar...same year on minimum wage. Now???

Bigger pie...much smaller portions for the people who bake it. Those sitting around the pool collecting dividend checks or Wall St. bets get the larger share. They call it work.

They eat so much pie, they vomit all over the real economy....shutting down the bakery. We're still in the midst of cleaning up the puke.

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Quote tmoney13:

-so it seems to me we are in a pretty good spot, so now if we could just convince our governing overlords quite stealing from us and to leave us alone I imagine we will be just fine.

The US economy is neither the best nor the worst of all possible worlds, but I agree with poly's and Chomsky's lists of things that are broke. Since I don't think the people with the right ideas have the electoral clout to implement them, I'm just going to put my head down and do my best to change the things I can in my individual behavior and that of anyone I can influence, no matter what doom may loom on the horizon. Doom has a habit of coming earlier or later than you expect, seldom on schedule.

Quote tmoney13:With regards to the commons, I read that as well, and I am going to have a tough time with that. I believe strongly in property rights and it seems that commons is a pretty loose word, which means that some self serving politician, could quickly determine that my lands should belong to "the commons". This may be in area we you and I will have to agree to disagree, but none the less, I still believe greasing politicians palms is wrong for whatever the reason.

What part do you have a tough time with: rivers? Should we auction them off to private bidders? How about the air? What do you think of the doctrine of public ownership of the broadcast airwaves and the public expectation of receiving a little public service, like accurate and relevant news, from the companies that are allowed to exploit them?

It seems your objections are related to a sense of distrust in government, which can be rational or irrational, depending on the specific fears you imagine. Your fear of losing your property to a public project is rational, but a choice to abolish immanent domain laws because of your personal risk would not be rational. Deciding that it probably wont happen to you and that you like having a national highway system is more rational. I have a fear that those who place private property rights above everything would sell off all the commons and I won't have any hope of clean air and water or driving cross country without paying a fortune in tolls.

If you abolish immanent domain (which in effect, forces people to accept a fair-market price for their property rather than a speculatively inflated price, which no private company could do), then you no longer have the possibility of a national interstate highway system as we know it. Are there abuses of immanent domain? Yes. Are there miscarriages of justice in jury trials? Yes. Nothing about human society is clean and pure. Its all about whether the pros outweigh the cons.

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Poor Richard, I agree that doom never comes on schedule, and I am sure that everyone has a list of things that they think are broken, and my guess is that my list would definitely be different from yours, Poly's, and especially Noam Chomsky, who I find insufferable. Ultimately wealth concentration doesn't bother me all that much. I personally value freedom above any financial or economic condition, so I really have no desire to see any further attempts at wealth redistribution.

In regards to the Commons, it is funny that you mention rivers and air, because it is precisely the things that are not owned privately, that tend to get the most polluted. Do I think rivers and air should be auctioned off? No. But I think that it is a fallacy to believe that they would necessarily become more polluted if they somehow were. Mostly what I take issue with the commons is that the definition is pretty loose, example from Wikipedia:

"The commons is terminology referring to resources that are collectively owned[1] or shared between or among populations. These resources are said to be "held in common" and can include everything from natural resources and land to software.[2] In some areas the process by which the commons were transformed into private property was termed enclosure."

And another from Wikipedia:

"There are other conceptions of the commons. Today, the commons need to be understood within the cultural sphere as well. The commons within this sphere include literature, music, performing arts, visual arts, design, film, video, television, radio, community arts and sites of heritage. The commons can also include ‘public goods’ such as public space, public education, health and the infrastructure that allows our society to function (such as electricity or water delivery systems). There also exists the ‘life commons’ – the human genome that makes us a unique species. Though a central government may ‘manage’ these, realistically we have inherited them and any governing body only holds them in trust for the public as well as future generations."

I am sorry but I don't see how software, music, film, tv, and art really fit in and if someone wants to define those things as "commons" then I am not interested. Don't even get me started on how the gov't could "manage" my "life commons". It makes me think Orwell or Huxley.

Poor Richard: If you abolish immanent domain (which in effect, forces people to accept a fair-market price for their property rather than a speculatively inflated price, which no private company could do), then you no longer have the possibility of a national interstate highway system as we know it. - I guess I can't see how forced seizure is ever a good thing despite who it may benefit. While this may not seem rational to you I am not willing to give anyone the right to turn their guns on me no matter how small the possibility or how great the reward.

“Government is not reason, it is not eloquence, it is force; like fire, a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible action.” - George Washington

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Probably all property should be made private...so there isn't a place to stand or sit on the planet without paying someone rent, a toll, a fee. Some push for that.

At one time, there was no private land ownership. It's all based on thefts. It's been bought and sold ever since. Usually, people who deal in stolen property find themselves behind bars.

Even in our own country, the land we buy and sell everyday....was stolen.

Private land oownership everywhere is always based upon an original theft. However, private ownership of stolen property is sacrosanct. A bit of cognitive dissonance, I think.

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polycarp2
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Quote tmoney13:

Ultimately wealth concentration doesn't bother me all that much. I personally value freedom above any financial or economic condition, so I really have no desire to see any further attempts at wealth redistribution.

Obviously you are on the green-grass side of the fence. If you you were on the barren side, you might change your tune. I understand that. The plight of others is not important to everybody.

Quote tmoney13:In regards to the Commons, it is funny that you mention rivers and air, because it is precisely the things that are not owned privately, that tend to get the most polluted.

Who would you say the major polluters are? Do you think the public regulators may be too lenient?

Quote tmoney13:Mostly what I take issue with the commons is that the definition is pretty loose,

"Commons" isn't intended as a legal property description. It isn't used in legislation or regulation or contracts where specific descriptions and definitions are required. Its a very loose term like "love".

I think you are raising a straw man, that some regulation might refer to the "commons" as a way of sneaking in a jurisdiction over private property. When property rights are taken or restricted, the terminology has to be pretty darn specific or courts will throw it out for that reason alone. This is well established legal principle.

Quote tmoney13:I guess I can't see how forced seizure is ever a good thing despite who it may benefit. While this may not seem rational to you I am not willing to give anyone the right to turn their guns on me no matter how small the possibility or how great the reward.

You probably support the right of the cops to turn their guns on citizens (including yourself) for appropriate reasons. Otherwise you are an anarchist who believes he can fend better in the jungle than in the civilized world. There are still jungles and failed states where you can go and live in absolute freedom until you get killed by something deadlier than yourself.

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Quote polycarp2:

Usually, people who deal in stolen property find themselves behind bars...

...private ownership of stolen property is sacrosanct.

Perhaps I can sort this out: naturally, in a civilized society, your chances of incarceration and the sacrosanctness of your private property, stolen or not, depends on your class and status.

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