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John Cooper
12 years ago
Getting the government involved is probably the worst response, here. It seems to me that speculators who drive up the price artificially are going to lose money when the price falls.
What are airlines, trucking companies, chemical companies, etc. going to do if they can’t hedge their petroleum use out one year?
@John Cooper: I read somewhere that speculators only have to put up 5% of their own money. Seems to me, if they had more to lose, they might “speculate” just a bit more conservatively.
I could be wrong, though. It could be the evil oil companies fault like our President keeps telling us.
John Cooper
12 years ago
antics: I think that’s about right. I found an article from a year ago which reported the futures exchanges were raising the margin requirements to 6.075% from 5.063 % for “speculators” and from 5.200% from 4.850 for “hedgers” (which I assume to mean airlines, trucking companies, utility companies, etc.)
If the government (at all levels) really wanted to lower gasoline prices at the pump, they’d cut the excise taxes. In my state, they just raised them. When I called my Republican state Senator on that, he blamed it on the previous administration.
Getting the government involved is probably the worst response, here. It seems to me that speculators who drive up the price artificially are going to lose money when the price falls.
What are airlines, trucking companies, chemical companies, etc. going to do if they can’t hedge their petroleum use out one year?
@John Cooper: I read somewhere that speculators only have to put up 5% of their own money. Seems to me, if they had more to lose, they might “speculate” just a bit more conservatively.
I could be wrong, though. It could be the evil oil companies fault like our President keeps telling us.
antics: I think that’s about right. I found an article from a year ago which reported the futures exchanges were raising the margin requirements to 6.075% from 5.063 % for “speculators” and from 5.200% from 4.850 for “hedgers” (which I assume to mean airlines, trucking companies, utility companies, etc.)
If the government (at all levels) really wanted to lower gasoline prices at the pump, they’d cut the excise taxes. In my state, they just raised them. When I called my Republican state Senator on that, he blamed it on the previous administration.