Exxon

#76
#76
oklavol said:
I think it's a testimony to how powerful the oil lobbyists are.

Could you imagine a private citizen trying to withold paying taxes for that amount of time after a court order?
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A private citizen has just as much of a right to appeal a judgment as a corporate entity.

I know people love to jump on "big oil", but this is a reach.
 
#77
#77
BigPapaVol said:
efficient markets isn't really BS. It's the closest explanation there is. You can't get into the psychology of the markets to explain nor can the capital flows be theoretically explained. Efficient markets doesn't mean that the market has all of the information available nor that the price is correct, just that the market is properly priced based upon the information currently available to it.
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not true. there are numerous examples of times that the market has not been priced properly based upon the current information available. for instance currrently AAA subprime debt is trading at .50 on the dollar. or during the long term capital crisis where spreads on pretty much everything got out of control. efficient markets work 99 days out of a hundred, but it is the one day out of a hundred that makes the difference between normal returns and huge losses. and if you look at Fama's original study on efficient markets he takes all the outliers out of the data which is of course ridiculous for the reasons i meantioned prior. Put the outliers back in and efficient market theory has been proven to not work.
 
#78
#78
droski said:
not true. there are numerous examples of times that the market has not been priced properly based upon the current information available. for instance currrently AAA subprime debt is trading at .50 on the dollar. or during the long term capital crisis where spreads on pretty much everything got out of control. efficient markets work 99 days out of a hundred, but it is the one day out of a hundred that makes the difference between normal returns and huge losses. and if you look at Fama's original study on efficient markets he takes all the outliers out of the data which is of course ridiculous for the reasons i meantioned prior. Put the outliers back in and efficient market theory has been proven to not work.
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I didn't say it works. I said it's the closest explanation that we have. Psychology doesn't work, technical analysis is self-fulfilling garbage and fundamental analysis has limitations too. All of them have limitations because the market can't know everything, doesn't operate in a vacuum and has fickle humans as operators. Irrational things are bound to happen at times.
 
#79
#79
yes but when you have irrational things happen like $136 a barrel oil and ethanol demand doubling food prices relying on efficient market theory to base policy can have serious negative consequences. my $.02. I'm all for a lack of regulation generally, but I feel in the last 10 years we have let the markets run a little too wild and unregulated. Hence problems like enron and bear stearns.
 
#80
#80
droski said:
yes but when you have irrational things happen like $136 a barrel oil and ethanol demand doubling food prices relying on efficient market theory to base policy can have serious negative consequences. my $.02. I'm all for a lack of regulation generally, but I feel in the last 10 years we have let the markets run a little too wild and unregulated. Hence problems like enron and bear stearns.
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I do think regulation is warranted in limiting market manipulation, which is what we're watching in all of the commodities markets today and what Enron was the best at.

Bear Stearns issues were pretty broad across the risk spectrum, but in the end, their biggest problems, and Wall Street's in general, came from the liquidity crunch brought on by subprime loan defaults. Regardless, wire houses have too much latitude in manipulating the markets that they play in and put customers in.
 
#81
#81
droski said:
yes but when you have irrational things happen like $136 a barrel oil and ethanol demand doubling food prices relying on efficient market theory to base policy can have serious negative consequences. my $.02. I'm all for a lack of regulation generally, but I feel in the last 10 years we have let the markets run a little too wild and unregulated. Hence problems like enron and bear stearns.
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And I maintain that it happens because the market isn't truly free and open. The regulators are too often co-opted by the participants. Witness this description you give, droski, of the oil companies having an advantage in buying futures for their own product.
 
#82
#82
lawgator1 said:
And I maintain that it happens because the market isn't truly free and open. The regulators are too often co-opted by the participants. Witness this description you give, droski, of the oil companies having an advantage in buying futures for their own product.
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It's not that the players are complicit with the regulators, it's that the rules allow much latitude for Ibanks and their house owned hedge funds or equity pools.

Oil companies buying futures in their own product is the reason the futures exist. They're not the ones driving the futures market through the ceiling. If you'll think it through, they have to have a willing participant on the other side of the transaction. That guy, and his massive pile of funds, is the reason for the massive liquidity in that market and the rising prices. The oil company is simply locking in a future delivery price within its operation and likely offsetting another transaction. The guy providing all of the money into that market, he's the one with no other purpose than place a bet that the price moves big and make a fortune off said move.
 
#83
#83
BigPapaVol said:
It's not that the players are complicit with the regulators, it's that the rules allow much latitude for Ibanks and their house owned hedge funds or equity pools.

Oil companies buying futures in their own product is the reason the futures exist. They're not the ones driving the futures market through the ceiling. If you'll think it through, they have to have a willing participant on the other side of the transaction. That guy, and his massive pile of funds, is the reason for the massive liquidity in that market and the rising prices. The oil company is simply locking in a future delivery price within its operation and likely offsetting another transaction. The guy providing all of the money into that market, he's the one with no other purpose than place a bet that the price moves big and make a fortune off said move.
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Actually, to be more precise, its the fund manager who is on the other end and who figures to make a healthy number just based on the cost of the transaction, regardless of whether its up or down, right?

Reminds me in a lot of ways of para-mutuel wagering, like horse racing. The house takes its percentage for managing the wagering and the facility. The amount paid back to the players is the same, just a question of who it goes to. So the house doesn't care who wins the race, as long as people are there trying to pick winners, the house makes its money.
 
#84
#84
lawgator1 said:
Actually, to be more precise, its the fund manager who is on the other end and who figures to make a healthy number just based on the cost of the transaction, regardless of whether its up or down, right?
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But the healthy number being made has been paid by someone on the other side of the transaction.

There is room in there for manipulation on the part of big oil via third party entities (a la Enron), but the risks inherent in being caught at that are enormous.

The fund manager is placing a bet that the market will move one way or the other, not either. Otherwise, all could just churn, drive volatility through the roof, and make a fortune, while prices remained steady. Just doesn't work that way. To make money in the futures arena, you have to place a bet with a particular market movement in mind.
 
#89
#89
Exxon is winning the dollar battle, Exxon,4.00 a gal. Anybody else 3.95. Go figure. It's nice to be a CEO at Rip you off Exxon.:lolabove:
 
#90
#90
Mills, how is Exxon ripping you off? Also, out of that $4.00 a gallon you said, how much of that is profit for Exxon?
 
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