Quote:U.S. President Barack Obama's bid to dampen the influence of oil speculators by having regulators set trading margins could backfire, potentially making prices even more volatile and leaving crude dominated only by those with the deepest pockets.

Under Obama's request to Congress, the Commodity Futures Trading Commission (CFTC) would determine how much speculators need to pay to trade U.S. crude oil futures, in theory increasing the amount when prices move too far, too fast.

But economists and traders cautioned that pushing smaller investors out of markets would only hand greater influence to the largest hedge funds and Wall Street banks. Ultimately, there may not be enough traders left to do business with oil producers and consumers looking to hedge their needs.

http://www.reuters.com/article/2012/04/1...FO20120419

Obama doing something to further enrich and empower Wall Street, while claiming to be looking out for working families? Shocking.

Wall Street simply can't lose this November.

His ignorance about how oil markets work is just as profound has his ignornance about how financial markets work.

If you're a hedge fund with a few hundred million to invest you can start moving the price up while taking a long position on the back end. Make your money, then start driving the price down, short it on the other side. It's exactly what Goldman was doing with CDOs that helped create the financial crisis.

Well, not exactly what Goldman was doing... But close enough.

Goldman was creating, selling and then shorting against their customers the deals they created and knew more than anyone about... Other companies were buying the junk off of bad deals, and then as trustee, advancing delinquent payments to reach triggers so that the subordinate pieces would get paid off first, and THEN let the deals default, with now no support.

That was fraud... What you are describing is merely throwing their weight around

(04-20-2012 09:03 AM)Hambone10 Wrote:  Well, not exactly what Goldman was doing... But close enough.

Goldman was creating, selling and then shorting against their customers the deals they created and knew more than anyone about... Other companies were buying the junk off of bad deals, and then as trustee, advancing delinquent payments to reach triggers so that the subordinate pieces would get paid off first, and THEN let the deals default, with now no support.

That was fraud... What you are describing is merely throwing their weight around

Fair enough. Agree that doing it with oil doesn't rise to fraud like Goldman was doing, but the underlying market manipulation with knowledge of what the price will be doing because of the bets they're making is fairly close.

(04-20-2012 09:03 AM)Hambone10 Wrote:  Well, not exactly what Goldman was doing... But close enough.

Goldman was creating, selling and then shorting against their customers the deals they created and knew more than anyone about... Other companies were buying the junk off of bad deals, and then as trustee, advancing delinquent payments to reach triggers so that the subordinate pieces would get paid off first, and THEN let the deals default, with now no support.

That was fraud... What you are describing is merely throwing their weight around

WTF are you talking about? Wall Street never commits fraud. They are just creating jobs.

Having served as an expert witness against wall street, I can categorically say that you are wrong, and that many conservatives disagree. The problem is that YOU don't know when what they re doing is legal, or illegal, or in response to a requirement by the government.

Sub prime loans didn't exist in large numbers or in "polite company" until the government made them do it... And wall street exists for the specific purpose of transferring risks. Color me UN-shocked when wall street does exactly what they are designed to do and help people transfer risks. By the way... Different margin requirements already exist for hedgers and speculators. What Obama is doing is similar in that it seeks to punish certain investors... Watch what happens when poorly capitalized speculators sue the government saying that "the poor guys" can't get a break... And then they are given a break, and the stuff hits the fan.... Because by definition, they were poorly capitalized to begin with?.. And if poorly capitalized firms get breaks that well capitalized ones don't, watch them increase leverage, and thus risk.

I've read some studies stating that sub-prime mortgages fared roughly the same as the average mortgage during that period, any truth to that?

(04-20-2012 11:52 PM)UCF08 Wrote:  I've read some studies stating that sub-prime mortgages fared roughly the same as the average mortgage during that period, any truth to that?

It depends on how you define it.

What actually happened was there was a liquidity vacuum. Nobody could finance these highly leveraged positions, particularly in sub prime. The fed came in and supplied liquidity when nobody else would, and then accounting rules were changed so that banks weren't forced to sell assets, or at least mark them to market, when they ceased to be rated the same... And then stopped banks from foreclosing.

From a standpoint of defaults and valuation of the underlying mortgages themselves, there probably wasn't a big difference... Because the government made sure there wasn't.