Tuesday, July 15, 2008

oil market and today represents more than 50% of oil purchases on the commodity market. Speculative purchasing involve buying a whole lot of a commodity you don't actually need with the anticipation that someone else does need it eventually and will pay you more than you bought it for to get it. Think of it like domain squatting, but with commodities like oil, oj, etc. I definitely agree that speculation can drive commodity prices up. And I agree that it sucks. But is it moral for the government to step in and tell people who is allowed to buy a commodity and when they can sell it and how many times you can sell it? That's micromanagement control. I realize it may be constitutional since the trading crosses state lines, but is it moral?


Edit: More researching on the fact and discussing it with economic types brings new information. Its just a *theory* that oil speculation is driving up costs. The counter argument is that if the oil speculator middlemen were not buying the oil from the oil companies and reselling at a higher price to those who need it [airlines, etc] then the oil companies themselves would just be holding it longer and selling it at a similar higher price to those that need it. Because in the end, the market price is the market price and speculators just change who gets the benefit of the markup more the original oil company or the speculator middlemen, but they don't actually change the market price. Only demand or shortage can really do that. And the speculators don't really create any shortages - they're not buying oil and holding onto it exclusively and refusing to sell, they are pretty much buying and turning right around when the oil delivery is ready and selling it.


Your thoughts?


It was Mommy and Me day in the town square near my office bldg. Lots of cute kids running around with their parents and it makes me stop and think about all the different paths my life could have taken and how different my life would be. I try to imagine what it would have been like if Jon and I decided to be parents and it is hard to imagine. At 32 I realize, had we conceived our first year of marriage, we could be raising an 11 year old right now. Can you picture it? Seems so strange to me to envision myself as a parent.


Are you putting your mind to the upcoming presidential election yet? What about the economy? Does it seem as bad to you as the doomsday crowd makes it out to be? We seem to be doing ok, except the recent $100,000 drop in our townhouse value stinks. Really stinks. Prince William County got hit the worst in Northern VA, but the housing bubble pop drove down values across the region. Watching our friends who are buying now makes us want to kick ourselves. For the same money we paid 3 years ago they're getting huge single family homes. We can only hope that we don't have to sell for some reason before the full recovery occurs [which could be 5-10 years down the line].


Lots of reflection on life and death this week with the passing of Tony Snow. Jon and I admired his talent and met him while wandering around downtown Alexandria a few years ago. To see him on TV after that was pretty neat, you feel like you have a connection. And to hear of his death at only age 53. Wow! That's less than 20 years older than Jon. Scary business. With 3 kids left behind its going to be tough for his family. Pray for them.


What's new in your neck of the woods?

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