Comments on: Interesting grains http://masteroftheuniverse.wordpress.com/2008/05/01/interesting-grains/ Trading, surfing, and my extensive art collection discussed here Thu, 21 Aug 2008 08:14:10 +0000 http://wordpress.org/?v=MU By: masteroftheuniverse http://masteroftheuniverse.wordpress.com/2008/05/01/interesting-grains/#comment-816 masteroftheuniverse Fri, 02 May 2008 00:54:41 +0000 http://masteroftheuniverse.wordpress.com/?p=273#comment-816 I remember that silver debacle very well. I was actually pissed because the COMEX changed the rules in the middle of the game. However, they had to protect the silver trade.....which is really who the Hunt Brothers were going after. I remember when they went after the soybean market in 1977. They were long about 80,000 contracts and Continental and Dreyfus stuffed them with beans. It took the Hunts a couple of years to get rid of their physical position of beans. Can you imagine the storage costs...... You've gotta say one thing about the Hunts....they had balls the size of lamp shades. Jeff I remember that silver debacle very well. I was actually pissed because the COMEX changed the rules in the middle of the game. However, they had to protect the silver trade…..which is really who the Hunt Brothers were going after. I remember when they went after the soybean market in 1977. They were long about 80,000 contracts and Continental and Dreyfus stuffed them with beans. It took the Hunts a couple of years to get rid of their physical position of beans. Can you imagine the storage costs…… You’ve gotta say one thing about the Hunts….they had balls the size of lamp shades.

Jeff

]]> By: allocator http://masteroftheuniverse.wordpress.com/2008/05/01/interesting-grains/#comment-815 allocator Fri, 02 May 2008 00:44:54 +0000 http://masteroftheuniverse.wordpress.com/?p=273#comment-815 Yeah and they don't mind speculators selling oil short if it brings down their gas prices, but sell short their pet tech stock and "somebody oughta do something". Anyway, high prices of anything in the futures markets are easy to resolve (assuming you want to go there) ... just jack up margins and that'll let the the air out in a hurry (though the longs won't like it). That's what happened to the Hunt brothers in silver - but frankly, what were they thinking? I was a broker actually at a pretty interesting time - October 1979 to August 1982. Speaking of silver, I wish they had a 2x ETF for that. It can be pretty choppy as well, which works for me. Cheers, George Yeah and they don’t mind speculators selling oil short if it brings down their gas prices, but sell short their pet tech stock and “somebody oughta do something”.

Anyway, high prices of anything in the futures markets are easy to resolve (assuming you want to go there) … just jack up margins and that’ll let the the air out in a hurry (though the longs won’t like it). That’s what happened to the Hunt brothers in silver - but frankly, what were they thinking? I was a broker actually at a pretty interesting time - October 1979 to August 1982.

Speaking of silver, I wish they had a 2x ETF for that. It can be pretty choppy as well, which works for me.

Cheers,
George

]]> By: masteroftheuniverse http://masteroftheuniverse.wordpress.com/2008/05/01/interesting-grains/#comment-814 masteroftheuniverse Fri, 02 May 2008 00:13:05 +0000 http://masteroftheuniverse.wordpress.com/?p=273#comment-814 George, Even Archer Daniels Midland lobbies in Canada from what I hear. Glad you're finally hitting your stride. It's such a shame that speculators get such a bad rap. The public perception puts speculators somewhat below roadkill. Jeff George,

Even Archer Daniels Midland lobbies in Canada from what I hear.

Glad you’re finally hitting your stride.

It’s such a shame that speculators get such a bad rap. The public perception puts speculators somewhat below roadkill.

Jeff

]]> By: allocator http://masteroftheuniverse.wordpress.com/2008/05/01/interesting-grains/#comment-813 allocator Thu, 01 May 2008 23:28:02 +0000 http://masteroftheuniverse.wordpress.com/?p=273#comment-813 Hi Jeff, All that imploding has been boosting my equities account of late since in the recent runups I was able to increase my short grain, short oil, short gold, and short natural gas ETF positions, and now they're starting to pay. That silly paper commodities short bet I put in my blog is also now at least $100K to the good. These commodity ETFs (long and short) are a real turbo-charge to my strategy. You make a good point in mylesfromnowhere's accusation of speculating on food. Speculators act as a form of insurance for farmers and food processors to lay off their risks, so that they can keep running their businesses (producing and processing food). One of the real culprits in the food crisis is the diversion of food to transportation fuel (corn-based ethanol), and perhaps green-house gases causing the droughts - although that causality is not clear-cut (there have been serious droughts in the past as well). I can't believe that our idiot government here in Canada is about to table legislation to MANDATE ethanol use in gasoline when the "BAD IDEA" alarm bells are going off all over the place - and it's supported by both of the two major parties! If they want to subsidize something, make it more fuel-efficient cars or solar panels or whatever. There are already major special interests all tightly wrapped around ethanol - and politically it's going to be a bitch to get rid of now. Environmentalists ironically were also a part of this problem - not forseeing the unintended consequences. Anyway, I like to think it was my one-man ethanol boycott that drove the fear into the commodity markets to make the house of cards all come tumbling down. :) Cheers, George Hi Jeff,

All that imploding has been boosting my equities account of late since in the recent runups I was able to increase my short grain, short oil, short gold, and short natural gas ETF positions, and now they’re starting to pay. That silly paper commodities short bet I put in my blog is also now at least $100K to the good. These commodity ETFs (long and short) are a real turbo-charge to my strategy.

You make a good point in mylesfromnowhere’s accusation of speculating on food. Speculators act as a form of insurance for farmers and food processors to lay off their risks, so that they can keep running their businesses (producing and processing food). One of the real culprits in the food crisis is the diversion of food to transportation fuel (corn-based ethanol), and perhaps green-house gases causing the droughts - although that causality is not clear-cut (there have been serious droughts in the past as well). I can’t believe that our idiot government here in Canada is about to table legislation to MANDATE ethanol use in gasoline when the “BAD IDEA” alarm bells are going off all over the place - and it’s supported by both of the two major parties! If they want to subsidize something, make it more fuel-efficient cars or solar panels or whatever.

There are already major special interests all tightly wrapped around ethanol - and politically it’s going to be a bitch to get rid of now. Environmentalists ironically were also a part of this problem - not forseeing the unintended consequences.

Anyway, I like to think it was my one-man ethanol boycott that drove the fear into the commodity markets to make the house of cards all come tumbling down. :)

Cheers,
George

]]> By: masteroftheuniverse http://masteroftheuniverse.wordpress.com/2008/05/01/interesting-grains/#comment-811 masteroftheuniverse Thu, 01 May 2008 21:28:14 +0000 http://masteroftheuniverse.wordpress.com/?p=273#comment-811 Actually, speculating in commodities is a necessary function for the economic well being of the planet. The futures market allows a price to be established year round for corn, wheat, soybeans, rice, and other foodstuffs. Without commodity futures markets, the farmer's crops would all come in at the same time, and the farmer wouldn't get a fair price for his crops due to the glut in supply. Without commodity markets, the price of food would ultimately go up, as supplies would dry up. Futures markets allow for a price to be established every day, and they smooth out the seasonality of the growing seasons. Speculating in commodities is accepting risk from either the farmer or the end user, allowing them to continue their business with a known cost structure. If one speculates in commodities, one should be entitled to earn a profit(or sustain a loss), just as an insurance company should be entitled to earn a profit by accepting your risk. As for contributing to rising food costs and starvation through speculating...can you quantify that with credible numbers or is that just your opinion? Thanks for stopping by. Jeff Actually, speculating in commodities is a necessary function for the economic well being of the planet. The futures market allows a price to be established year round for corn, wheat, soybeans, rice, and other foodstuffs. Without commodity futures markets, the farmer’s crops would all come in at the same time, and the farmer wouldn’t get a fair price for his crops due to the glut in supply. Without commodity markets, the price of food would ultimately go up, as supplies would dry up. Futures markets allow for a price to be established every day, and they smooth out the seasonality of the growing seasons. Speculating in commodities is accepting risk from either the farmer or the end user, allowing them to continue their business with a known cost structure. If one speculates in commodities, one should be entitled to earn a profit(or sustain a loss), just as an insurance company should be entitled to earn a profit by accepting your risk. As for contributing to rising food costs and starvation through speculating…can you quantify that with credible numbers or is that just your opinion?

Thanks for stopping by.

Jeff

]]> By: mylesfromnowhere http://masteroftheuniverse.wordpress.com/2008/05/01/interesting-grains/#comment-810 mylesfromnowhere Thu, 01 May 2008 21:13:41 +0000 http://masteroftheuniverse.wordpress.com/?p=273#comment-810 Speculating about food resources... how does it feel to contribute to the rising food costs and contributing to starvation :P Speculating about food resources… how does it feel to contribute to the rising food costs and contributing to starvation :P

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