60 Minutes: On Speculators and Commodities

Last night 60 Minutes did a segment on the role of speculators in rising and falling commodity prices over the last year.

I don't agree with all the analysis or conclusions -- okay, most of the analysis and conclusions -- but it's still worth viewing.

See it here.

Watch CBS Videos Online

Comments

[ROLEX18K:]

Speculators depend on the Fed lending it's billions of currencies to them, so they search with it the highest return which is always the riskiest one as no risk no champagne mentality.
When rates are low bubbles build, when interest rates are high bubbles die.
That simple, no money no honey.

Jan 12 01:15 PM

[Ferdinand E...:]

60 minutes is an excellent news program, but when it comes to energy they are hopeless. Why is that? It's because the people they ask for comments on that subject are hopeless. Of course, even it they were not, their audience is less than hopeless. Did you know that there are people who still think that speculation determines the oil price?

Jan 13 08:23 AM

[BHMTom:]

Thats whats wrong with the populas of dumbmasses. I saw the show and was intrigued. It did give me some thought, but the little educated guy in the back of my head was saying there is enough competition that these guys were taking a calculated risk. It could have gone south on them.
It still amazes me that gas prices rose so fast and dropped just as quick. Supply and demand will prevail the speculative stories. When Hydgron hits the market Opec will be dead just like the dinosaurse they are pumping dry. The part I hate is that this WILL occure on Obama's watch. He will capitalize on this and be seen as the savior.
I too have ben making Hydgron gas as for fun with a glass of water a car battery and battery charger. The stuff is so much more explosive than gas and it is being done...All over America in basements and across Europe and Asia!!
Now if AIG would get a nice bounce in the next year !!
Amen

Jan 13 12:06 PM

[k9s-4-k8:]

Its really a combination of supply & demand and speculation. Speculators don't go long or short based on the current supply and demand equation but on what they think its going to look like going forward. Their speculation often overextends on the upside as well as at the bottom. Ultimately, supply and demand does rule the day. Consider the fact that as oil first got over $100 and then $110, $120 there was hardly any drop off in demand. Additionally, we didn't see a lot of new oil come onto the market so as to capitalize on high prices. Saudi Arabia was the only nation capable. As prices went higher and higher oil inventories didn't explode till we saw $140+. This is proof that oil wasn't overpriced while the economy was still moving forward. Oil has a relatively inelastic demand till prices popped through $140. At the root of the demand equation is other governments subsidizing the cost to business and consumers. Change that and we'll see a lower top end range for world oil prices.

Jan 13 01:35 PM

[bernie52:]

From the several comments that I have read about last Sunday's CBS report on the commodity market price of oil, I would say that the report was very effective. Eight minutes of reporting is just time to open the can of worms. If there was some way to eliminate speculation from the price paid for oil, what would that be? COST plus 10 percent?
The major inference of the report that if you could only get all the money with no intention to use oil in some value added process to just get out of the game that is a subject for economics 312 which we will never see on network TV, cable TV, even CSPAN. A version might be available on Cal U public TV.

Jan 13 05:22 PM

[auto44:]

Do you include yourself as part of that hopeless audience?


On Jan 13 08:23 AM Ferdinand E. Banks wrote:

> 60 minutes is an excellent news program, but when it comes to energy
> they are hopeless. Why is that? It's because the people they ask
> for comments on that subject are hopeless. Of course, even it they
> were not, their audience is less than hopeless. Did you know that
> there are people who still think that speculation determines the
> oil price?

Jan 13 09:31 PM

[auto44:]

Are you part of that populs?

On Jan 13 12:06 PM Bhm TOm wrote:

> Thats whats wrong with the populas of dumbmasses. I saw the show
> and was intrigued. It did give me some thought, but the little educated
> guy in the back of my head was saying there is enough competition
> that these guys were taking a calculated risk. It could have gone
> south on them.
> It still amazes me that gas prices rose so fast and dropped just
> as quick. Supply and demand will prevail the speculative stories.
> When Hydgron hits the market Opec will be dead just like the dinosaurse
> they are pumping dry. The part I hate is that this WILL occure on
> Obama's watch. He will capitalize on this and be seen as the savior.
>
> I too have ben making Hydgron gas as for fun with a glass of water
> a car battery and battery charger. The stuff is so much more explosive
> than gas and it is being done...All over America in basements and
> across Europe and Asia!!
> Now if AIG would get a nice bounce in the next year !!
> Amen

Jan 13 09:33 PM

[auto44:]

As usual, 60 minutes was short on specific facts and long on inuendo. As k9s-4k8 explained inventory did not rise until after $140. He is the only guy I have heard talk about inventory. Good job to him,not 60 minutes. They are no different than the rest of the main stream press in this country, morally bankrupt frauds. Using listeners as dupes.


On Jan 13 05:22 PM bernie52 wrote:

> From the several comments that I have read about last Sunday's CBS
> report on the commodity market price of oil, I would say that the
> report was very effective. Eight minutes of reporting is just time
> to open the can of worms. If there was some way to eliminate speculation
> from the price paid for oil, what would that be? COST plus 10 percent?
>
> The major inference of the report that if you could only get all
> the money with no intention to use oil in some value added process
> to just get out of the game that is a subject for economics 312 which
> we will never see on network TV, cable TV, even CSPAN. A version
> might be available on Cal U public TV.

Jan 13 09:45 PM