Consider this speculation, Seeing many new stocks hit the market in 2006 just around the peak of Hurricane Katrina, new available stocks became available on the exchanges. Considering that the back ground of many of the stock or ETF's that buy up OIL contracts before they expire.
Here's is some thing to think about, we all now what happened to the real estate market. A (BROKER) would finance an inflated Mortgage twice the value of a home that the buyer really could not afford. After a month or two the Mortgage would be sold off to a new holder. Then may switch banking hands one or two times more.
We all know in the beginning that the first (Broker) to make the sale & commission AND sold off the title DID in fact walk away with a lot of money, leaving the other banks to play hot potato.
Any way I am sure others could speculate as well or another guess the same. but for me it smells like real-estate, acts like real-estate, it will perform like real-estate until things are brought to true light how when and where the price profits are made, and final ARE THEY LEGITIE!
Well with the real estate financial song sung and done many many many banks lost their shirts and undergarments. They need to make up quite a bit of losses. Which bring me to the term buying up oil contracts.
Being that there are no real transparencies to the whole new stocks which surfaced in 2006 where they buy up Gas, Oil, Crude and other energies. Just reading an article how one of these so called funds worked was they would go out and buy the OIL contracts before they expired. THEN based upon what the future price of oil would be they made their money? THAT DOES not Say much?
1) Did they add in their commission on top on the contract for to oil transaction?
2) Did they just become a middle man to up the price for delivery BECAUSE they held the Contract like a title to a house mortgage?
3) Are they Buying the Oil Contracts and reselling them like Home Mortgages adding in a commission on top? Heck if you hold the majority of the OIL contracts you get to resell them at what ever price you deem.
Just think how the speculators say yeah Oil will go down but the GAS at the pump will still go up!
Hm-mm, Just think of those Funds which are buying up the Gasoline Contracts, and how even Exxon Mobile which to sell off the gas stations saying it will make the refinery side of the company more profitable. Even I could see Exxon's moved to become more competitive BUT.........
Watch out for those FUNDS that buys up gasoline contracts being a middle man between the refineries and the gas station. Just how these same oil contracts FUNDS between the rigs and the refining plants.
To me this seems like a wolf in sheep's clothing which just got rid of the sheep dress for a lambs coat.
I believe once the transparent oil surge comes to light they might indeed find out its the brokers or financial companies play the middle man in the buy and selling of OIL Barrels like real estate contracts.
Sure Homes take 15 to 30 years for full returns, BUT if you are one of the major contract holders holding a major amount of the contracts to give to buyers, you hold all the demand. Second, any of the other parties see you getting oil twice or three times the amount why should they not make any money as well, and they do not have to wait 15-30years for a full profit return.
THAT real estate lesson was abused when many people needed a home to buy with short supply. ACTUALLY there was no short supply of homes. They just said OH Mr. Jones you can buy this house with your bad credit but you will pay twice the price. Then buy flooding the market with making every two family home (Married Adults living with parents) where now all available to move out and get those dream homes at twice the price. THEN the boom to build new homes and sell them at an inflated price. And so on and on. Why explain it we all know how they did it but the bank holding the hot potato took the hit and the people also.
Bait and Switch.......................
IS IT NOT TRUE! STOCK = Ownership to a piece of a company!
Sure if a company says they have assets in other areas but this PARTICULAR stock is base on contracts buy and selling? Does that not sound like a "Title" on a barrel of oil for a particular point in time? It smells like inflation and acts just like the real estate market.
If this is found out to be true and all the focus goes into market manipulation due to OIL Contracts being bought and sold like home titles. Well then just expect such so called gasoline funds that will manipulate the gasoline deliveries like "Titles on a gallon of Gasoline" following suit as the oil speculation has been going on.
MY HOPES that this is not true, but I believe that the whole OIL price investigate will be able to make the whole oil price more transparent and find out who (Which party or Parties) have increase the barrel of oil from the rigs to the refineries.
My Belief is that a contract is a piece a paper NOT OIL, look at the real estate, those who bought stocks in banks which took the hits holding the Hot Potato. Someone is walking away from this passing the buck, at that buck has been past globally to every business, person and those who last jump on the real estate boom...errr...I mean the oil boom.
Maybe they need to put restrictions on these paper assets and only allow company assets on the market. Its like putting shares on how well a trader performs for that day, but do you think he/she will give up a paycheck as assets or their home? I think not, those shares done say you own a share of his home, these funds are like owning a share of his/her shares in hand. AND at any time they can sell off those share (FUNDS) to another trader at a profit cutting all ties to his house as assets anymore. YOU and the new trader holding that FUND share is worthless on a so called Future price of oil.
It smells, acts at looks like real estate fundamentals, hopefully this is not true and those parties will be found out and how, when and where the price increases where added. AND that if found to be manipulated that balances and checks will be placed so this can not happen under such NON transparent facts and data.
Becuase there are only two side right now, one side saying that from start to finish the oil should be about $60-70 a barrel, and on the other side those speculators saying "The price is going up", yet NOT Giving any facts on $of the barrel (only shortages) through its steps to the consumer.
$83.18 (06/15/08)
