Record High Crude: Free Markets Meet the Cartel

Oil prices again reached an all-time high, reaching an intra-day high of $123.79 Wednesday. The weekly IEA report showed that crude oil and gasoline inventories had gone up significantly more than predicted. The crude oil inventory was up 5.65 million barrels, or 1.8 percent, to 325.6 million barrel, about four times more than what analysts had been predicting. Gasoline also showed a greater than expected increase, while distillates like diesel were lower.

Many analysts are surprised at the current spike in oil prices since many of the factors which were thought to contribute to the rise in oil prices had reversed. The US Dollar has rallied against the Euro over the past two weeks as the Fed has signaled an end to the current interest rate cuts. The supply situation has improved. Even the rebels in Nigeria signaled a willingness to end attacks if former President Jimmy Carter agrees to mediate.

Why the Spike?

The spike in oil is being attributed to a report from Goldman Sachs which discussed the current supply and demand situation. The report noted that while oil supply growth and spare capacity is limited, the demand from emerging economies of India and China shows no sign of slowing down. The report says that it is likely that we will see a major spike in the price of oil, as high as $150-$200 in the next 6-24 months as rampant speculation about supply-demand mismatch creates a bubble and pushes oil prices to stratospheric levels. The report goes on to suggest that speculators are doing the rest of the world a favor, by accelerating the price increase, which will force governments to act and reduce the demand, leading to a subsequent decline in oil down to $75-$100 level.

One reason why Goldman's prediction might come true is that a lot of emerging markets like Indian/China, which are the growth drivers on the demand side, have fuel subsidies in place. As a result the increase in the price of crude is absorbed by their government and not passed on to the end consumer. Unlike the developed world, there little price elasticity in the demand for oil in these countries. The governments are already worried about inflation and are reluctant to pass on the increase in oil prices to deter demand growth.

Price Discovery: Speculators versus Hedgers

The commodities futures markets were originally designed to assist large consumers and producers to hedge the risk of massive price movements due to unforeseen circumstances. They are valuable tool which allows corporations to manage risks and plan their budgets, without worrying about day to day gyrations in the commodity markets.

As growing demand from emerging economies led to a rally in commodity prices, a number of new vehicles have emerged which allow investors to invest in commodities without accessing the futures market. Many of these funds are in the form of ETFs which offer exposure to specific commodities. In the case of crude oil, there are at least two funds (USO, OIL) which are directly linked to the price of crude.

Unlike actual consumers and producers of oil, the money invested in these ETFs is purely speculative. These ETFs are long only products and they do not take short futures position. Though there were always speculators in the commodity markets, the ease of access which the ETFs provide means that universe of investors who can now speculate (on the long side) has increased substantially. Financial advisors now increasingly tout commodities as a contra investment class with an inverse relationship to the US Dollar (and consequently the US economy).

The huge amount of speculative money invested in the commodity market is creating an imbalance in the price discovery process. A process designed to be driven by supply and demand of the underlying commodity is now being controlled by speculative money betting on uni-directional price movement.

Margin Requirements: Pennies to the Dollar

An aspect of the commodity futures market which may not be obvious to the average person on Main Street is that, it takes very little money to speculate in the commodity futures market. A NYMEX crude oil contract corresponds to 1000 barrels of oil (corresponding to $123,780 of total oil value) but requires just $9788 in initial margin! So you could call a futures broker, deposit $20,000 and start speculating on thousands of barrels of crude oil.

The low margin requirements were designed to allow commercial users to hedge their exposure without the hedging becoming a financial drain. However, they also expose the market to manipulation and rampant speculation.

Black Box Trading and Technical Levels

As the money chasing commodities has grown, a large group of investors including hedge funds are trading in the commodity markets. Many of these groups use sophisticated algorithms programmed into computers to trade. These techniques, often called black-box trading, execute trades without direct human intervention. They study the price action, especially around key technical levels which are considered resistance (against upward movement) or support (against downward movement). If the price breaks through a support level it is likely to go down further; similarly if it breaks through resistance, it is likely to go higher.

One commonly used technical indicator is daily pivot points which are derived from the previous day's high-low-close values. These levels act as support and resistance levels. For example, for Wednesday May 07, 2008 from low to high were (S2:119.407, S1:120.533, PP: 122.67, R1:124.793, R2:125.927). After the bearish IEA report, crude oil fell rapidly but rebounded right at the S1 level. The low for the day was 120.54, right at the S1 level! Later during the day the price hung around the PP point of 121.647 before spiking up after 1:00PM.

click to enlarge

Technical Levels: Fuel for Manipulation?

The commitment of traders report indicates almost 30% of the open futures interest in crude oil is from speculators and traders, and not commercial hedgers. And unlike commercial hedgers where the long/short interest is balanced (with short interest about 4.5% higher), the speculators are net long (with short interest about 15% less than the long interest).

When a market has a lot of speculative interest, traders (and black box algorithms) closely watch key technical levels. An entity which is interested in moving the market in a particular direction can provide support at the key technical levels. For example, Wednesday if the price had fallen meaningfully below 120.54, it may have reduced the speculative excess and oil may not rallied to a new high.

Since the futures market determines the price of oil, intervention in the futures market at specific price points can have a leveraged effect to entities which profit from higher crude oil prices. You would expect oil exporting entities to sell future contracts to hedge. However the same entities can also go long futures at key technical levels and provide an upward support to the market, with speculators taking care of the rest. For example, buying futures around the 120.54 level yesterday would have provided the support needed to boost the market higher after the bearish report.

Case for Intervention: An Economic War

We have a situation where the tradable production of a commodity is controlled by a handful of nations. A significant number of these countries are aggressively opposed to the United States and would cheer if America suffers. As the world's largest consumer of energy, high oil prices are a tax on the United States.

Further we have an open futures market, where anybody can speculate with very little financial outlay. To add fuel to the fire, we have a strongly bullish investment sentiment, with investors pouring in funds into the long side. All it takes is support at key technical levels and the speculators will take the market higher.

In my opinion, this is the perfect storm. Countries which are not amicable to US interests have a vested interest in keeping oil prices high. This comes at a time where the US banking and economic system is under stress. Higher energy prices are likely to break the back of the already stretched US consumer. Oil exporting countries also know that insatiable demand from the emerging economies will always provide a support to oil prices, and will make up for any reduction in demand from the US.

We are fighting an economic war where the parties are fighting with different rules. On side we have the free markets of the US; on the other side we have the world's most powerful cartel. We need different weapons to fight this war; traditional free markets dynamics will take too long to come into equilibrium. During this period, the average American will suffer, while we ship wealth to countries not amicable to American interests.

How to Intervene?

Though a lot of observers understand the problem, there are no easy answers to this situation. I have certain ideas which can reduce some of the speculative froth while still allowing an active futures market for commercial hedgers.

1. Commercial Hedgers vs. Speculators: A clear demarcation between commercial hedgers who take possession of the physical commodity, and speculators can result in different rules for two classes. The ability of speculators to influence the market price will be reduced by significantly increasing margin requirements (e.g. by 5x) for non-commercial entities.

2. Strategic Petroleum Reserves: The whiff of government intervention can take the wind out of speculators, and the SPR can be a valuable tool in sending that message.

a. The SPR can be used as a reserve to sell futures contracts against. Since commodity prices are driven by technicals, intervention at key points can have a leveraged affect. How would the price action been if the key technical levels were taken out by some well time selling after the bearish inventory report?

b. The government can declare that they will use the SPR as a price control mechanism; reducing purchases if the oil spikes up, and in extreme cases even release supply if needed.

3. OPIC (Organization of Petroleum Importing Countries): The US should work with the emerging economies of China and India which are being blamed for the speculative fervor to create a formal union of countries which import oil.

a. The US should impress upon the governments of these countries to aggressively reduce subsidies for petroleum products to reduce the growth in demand and provide incentive for more efficient consumption of oil. Since these countries are large net importers of oil, high oil prices are not in their interest.

b. Collaborative Bidding and Exploration: Currently companies from India and China are in a fierce competition with each other when they bid for exploration rights for different emerging fields. Instead of competing with each other which bids up the price, the US should lead efforts to form a block which bids together and shares technology for more efficient exploitation of existing energy resources.

c. Energy Efficiency: The US should encourage exchange of technologies which result in more efficient utilization of existing energy resources.

4. Gas Guzzler Tax: Current tax policies encourage small businesses to purchase gas-guzzling vehicles which they can depreciate quickly. This is a regressive tax policy which discourages energy efficiency. The tax policy should be changed to encourage the purchase of more efficient vehicles and penalize gas-guzzling vehicles.

Disclosure: Author holds both long and short equity, options and futures positions in crude oil and oil related industries.

Comments

[Vikram Saxena:]

Also short selling of stocks (the other argument you proposed against government intervention) does not result in a net transfer of wealth to countries amicable to our interest.

Speculative excess in the oil market transfers wealth away from the US. That is why it is in the national interest of the US to intervene in the market and reduce the speculation.

There are some observers who say that by increasing the margin requirements we will be driving speculators to other exchanges. That is where a concerted effort at the international level can make a difference. Increase the margin requirements across as many world exchanges as possible, and the role of speculators will decrease.

2008 May 08 01:24 PM

[JREwing:]

But who are you to intervene?

Who gives you the right to do a well timed intervention.

And again: The traders know, that you have to fill the SPR up again, after you released oil into the market. They're gonna whip you and the whole damn thing will have done more harm than good, like any government intervention. Take the FX market. How many times in history did central banks intervene? With each time it had less effect. Once their gun was empty the traders had them by the balls.

When you release oil into the market to keep prices low, oil companies will stop their E&P. When you are an oil baron and every time you get a decent price for your product, you get burnt by the government, you stop investing. Period.

The government thought they could control prices once before, in the 70s.
Now that worked well, didn't it. People had so much time to get to know one another while they stood in line at the gas station. Wasn't that great.

The oil business is one of the riskiest businesses out there. You pay 100 of millions to the government for your tracks and you don't know exactly how much oil is down there and what kind of oil and your daily output. Your exploration costs could exceed your estimates and what not. It is almost like russian roulette.

If the government keeps prices low, they just won't play that game anymore, and speculators are the least of your problems.

2008 May 08 01:24 PM

[JREwing:]

And to what you said above:

I know that the oil market isn't free. It is people like who are responsible for that.

Every government in the world should leave the energy market alone!

2008 May 08 01:26 PM

[maximax:]

The oil industry is highly secretive but the price finding mechanism is free, to the best of my knowledge. User190648 is wrong to assume that oil companies set prices. There are reference prices (mostly wti/brent/dubai), and the actual price paid is calculated from the relevant reference price +/- adjustments for the difference in quality. Some companies/countries offer discretionary discounts, eg Saudi Arabia has recently been offering discounts on certain non-light grades to the US, maybe some other western buyers as well (not sure), but not to Asian buyers. As long as demand growth is outpacing supply growth, and as long as real interest rates are negative (see David Merkel's contributions) I see no way of the crude price bull run to end, even though there are no real shortages yet i.e. everyone who can afford it still gets the amount of oil he needs, although not necessarily in the desired grade, as oil has in general been generally getting heavier and sourer. As far as commodity prices are concerned, fundamentals rule in the mid/long term, even if the current prices are somewhat overblown when viewed from a supply/demand basis (but these are not the only fundamentals!). Technical indicators matter... in the short term, mostly intraday. Vikram's suggestions re subjecting the energy markets even more to political interests are just bad... the per capital oil consumption is so much higher in the US than anywhere else, if you want to become independent of the black stuff, focus on efficient cars and more public transportation, and if possible, alternative propulsion technologies. Trying to solve this dilemma by drilling up the whole country will only stretch it out into the future. There is a life beyond oil, how much of it do you want to sacrifice for it? Also not sure about that "Economic War" thing Vikram wrote about in a comment. So the US is in a downturn, and that's a war then? You may not like the state of the markets at the moment, but that does not mean that they are broken. So the SPR should do a Bernanke and flood the market with oil? See what the Fed has achieved. And they are now pretty much out of ammo as far as interest rates are concerned, while meanwhile inflation is eating away your $$$. A SPR stunt would do no better. Commodity bull markets tend to run long, and given that the chance of PRC&Middle Eastern countries introducing market prices for petroleum is precisely nil in the foreseeable future (not sure about India, but would be surprised), you better start lobbying for the US to start dealing with its oil addiction. And I have to say Vikram, that your comment on ample diesel supply in the US smells of you not having followed the market continuously. There has been quite a shortage recently, and refinery margins for middle distillates have been high in the US due to that. See the investor section of the TSO website, they have some up to date refinery margins info. But take that one easy, interpretation of publicly available oil data is an art, since its quality is so dismal.

2008 May 08 02:34 PM

[Glynn:]

Americans need to rise up and stop buying gas from the major oil companies, Exxon/Mobil, Shell. BP, Chevron & Texaco. Boycott these gas stations and you'll see the price drop drastically. Remember this, while you’re spending your vacation money at the pump, the oil executives and there families are going on luxury vacations around the world. Wake Up Americans! Also call your Congressman or woman and Senators and demand they put forth a bill to start drilling for oil we have right here in the US. It's past time we stop listening to the environmental whackos in this country, and drill for the oil we have here. Importing oil from the Middle East is only benefiting there economy and hurting ours. America needs to become energy independent from the Middle East and Venezuela.

2008 May 08 02:43 PM

[Vikram Saxena:]

maximax:

As I have reiterated, the goal is to get speculators out. I agree with you that in the medium to long term, commodity prices are driven by fundamentals. However in the short term, they are driven by momentum and technicals. Oil prices have oscillated between $108-$124 over the past month; clearly a 15% range is not due to dramatic moves in fundamentals.

OPEC chief today declared that there is no supply shortage and there is 4 million barrels of spare capacity; however the market still rallied into the close. This is nothing but speculators taking over the market.

Though it is true that diesel stocks were down, you can not view that without regards to consumption. As the report indicates, the days of supply of distillates was at the highest level over the past five weeks!

Economic War: There is absolutely nothing which prevents oil producing countries to supply support in the futures market at key technical points. Iran's President today declared $200 oil as realistic. They will try their best to create situations where oil rises (whether it is gun boats approaching US ships or terrorist attacks); they can also participate in the futures market.

That is why some intervention in the futures market which can get excess speculation out of the market is in US interests.

BTW, the way CrossingTheT is questioning 'who are you to intervene...' seems to suggest that he too believes that government intervention might reduce the excess.

Increase margin requirements for speculators, sell some futures at key technicals, and oil will find its real price.

2008 May 08 03:12 PM

[JREwing:]

Well, Vikram, if you believe the OPEC chief, i can't help you, really.

This guy is ridiculous. How can you believe that they have 4 million barrels spare capacity. You have got to be joking.

And by the way. You contradict yourself.

If you really think, the Saudis have 4 million barrels spare capacity. How do you think they are gonna react, when you 'intervene' with the release of oil from the SPR. Let us assume for the moment that you succeed and prices come down. Hmm.. what are the Saudis gonna do?

They are really gonna cut back production and by doing that, they drive the price back up.

YOU JUST DON'T UNDERSTAND ECONOMICS 101! SUPPLY AND DEMAND!

AS SOON AS YOU PROVIDE SUPPLY, THAT NORMALLY WOULD NOT BE IN THE MARKET, SOMEONE ELSE IS GONNA CUT BACK. EITHER OPEC, BECAUSE THEY DON'T LIKE OTHERS MESSING AROUND WITH THEM OR BY LOWER E&P FROM PRIVATE OIL COMPANIES. OR CONSUMPTION WILL GO UP, BECAUSE THE PRICE IS LOWER.

SUPPLY AND DEMAND! YOU GOTTA LOOK THAT UP!

2008 May 08 03:31 PM

[JREwing:]

GOVERNMENT INTERVENTION DOES NOT WORK! IT NEVER DID!

2008 May 08 03:32 PM

[Vikram Saxena:]

CrosingtheT:

All the GOTUS has to say that they will use the SPR to affect pricing. There are 702 million barrels of oil there (97% of capacity); that is 702,000 future contracts they can sell without going short. Even if they use 5% of that amount at critical points, they will make a difference in the speculative excess. Increase the margin requirements by 5x and you reduce speculation significantly.

You keep on talking about supply/demand. What has changed in the supply demand situation in the past one month for a move to $125 from $108?

And government intervention: Have you heard about The New Great Game? Oil and energy is the driver of the biggest geo-political games in this world. To believe that there is no political component to oil supply and pricing is not just being naive but completely disingenuous. We are losing the economic war every time we ship our dollars abroad in exchange for $125 oil.

2008 May 08 04:14 PM

[JREwing:]

The SPR is being increased by the government, because the geopolitical risk is increasing. A lot of countries stake up their SPR.

What has changed in the last month? It is coming increasingly clear that the economy is not falling off a cliff. (thanks to your interventionist friends in the FED, who opened the Money-SPR) And we may even look at a second half recovery.

Compare the Baltic Dry Index with oil.

This 'New Great Game' is the oldest game of geopolitics. Resources are the very reason geopolitics exist, from the Roman Empire over the British Empire and to this very day. What is new about them? May be this game gets tougher, the tighter the supply and demand picture is. But it is not new and speculative money has nothing to do with it.

You are right: We (here in Europe, too) are sending a fortune overseas every day for oil. But please explain to me, how exactly is that problem solved by artificially pushing down prices? IT MAKES IT WORSE, BECAUSE CONSUMERS DO NOT CHANGE THEIR HABITS! When here in Germany a couple of years ago the taxes on energy where hiked enormously (they call it eco-tax) people complained badly. But it had the effect, that more than 50% of all newly built cars are diesel, which are a lot more effective than gasoline driven vehicles.

How do you want to get out of that trap, which you accurately describe, when you want to push down prices and thereby take away every motivation to use oil more effective?? You don't make any sense?

2008 May 08 04:45 PM

[Vikram Saxena:]

CrossingTheT:

I think we have already reached the point where we will no longer ignore oil and energy costs. So expect more initiatives to drill for more oil in the US, electric cars, higher fuel effeciency standards, solar energy etc. Silicon Valley VCs are heavily into alternative energy; solar stocks are on fire. A 10-20% downward movement in oil is not going to change that. In fact even if crude oil falls, it will not show up at the pump since gasoline spreads will widen a bit from the historic lows they currently are.

In the interest of the democractic world, just get speculation out of the oil market. Let commercial hedegers determine the price; not hedge funds and ETFs. Increase margin requirements, sell some futures and get oil to stabilize in the $80-$100 range.

2008 May 08 05:10 PM

[Nostock:]

I am an average Joe in the Main street, and don't own any stocks. Just as govt intervention would "artificially" move the market, SO DOES THE INTERVENTION BY "speculators". Speculators are nothing but spoilers of the free market, and exist only to line their pockets, at the expense of average Joe like myself. All the Economics 101 jibberish does not and cannot explain the current prices at the pump. The oil prices are artificially "created" by the speculators and not in accordance with "the supply and demand" jibberish. One intervention (by speculators) can only be controlled and normalized by another intervention (the Govt). I understand and agree with the concept of keeping the govt out as much as possible, but when the greedy speculators begin to spoil the natural process of "pricing" and cause havoc on the whole world, then the Govt must step in. The only Govt that can truly counter the effects of greedy speculators is the US Govt. No other govt interventions have that kind of soothing powers. So, although I am against govt interventions in general there is a time when only the govt intervention is the solution, and that time is now before the impact of high prices start pitting one country against another and start a true global war!
....... and I have no stock holdings and I am an average Joe in the Main street.

2008 May 08 05:16 PM

[Mr. Math:]

drill in North America

2008 May 08 05:39 PM

[Rod Raynovich:]

Investors and Traders buy into energy sector
Gold back on track with oil, gold up $11 to end at $882; dollar is weak as ECB holds rates steady

The new alliance of energy rich countries such as Russia, VZ, Iran,SA et al combined with global investors in driving
the upward momentum of the energy trade. Iran fed the bull as oil minister Nozari said that $200 oil is not far away due to dollar weakness.

Skeptics say it is speculation driving prices but even large pension funds such as CALPERS have significant positions in commodities
especially oil, otherwise their returns for 2008 would be dismal. Momentum begets momentum. After a brief correction last week energy
stocks are on the go with most subsectors up 2-4% such as bellwether XLE up 2% to a new high touching 85:

Integrateds: COP CVX HES up ~2%
Services: FSESX SLB WFT XES up ~3.5%
Nat Gas: CHK DVN FSNGX SJT XTO up 1-2%,SWN up 3.2%.
Royalty trusts were mixed as PGH and PBR were flat and BBEP was up ~2%.

Refiners are still spooked by crude action and SUN TSO VLO all took hits so a bottom for these stocks is not at hand. However MRO was up 1.6%.
Analytical types in the industry who study fundamental data
are obviously missing the bigger picture.

On Tuesday Arjun Murti of Goldman Sachs raised oil targets from $120 to the $150-200 range for the next 6-24 mos.
Murti also said demand for middle distillates such as diesel, heating oil and jet fuel are racing up signaling tightness in global refining capacity.

Politicians rather than be seen as aloof and clueless suggested a moratorium on summer federal gas taxes offering a paltry $80 saving for
the average driver. And the immediate effect of lower rates seems to be raising oil prices.

Vikram Saxena sums it up well:

seekingalpha.com/artic...

Positions: diversified equal weighting in energy service nat gas and integrateds. New position last week-- NE.
Adding to core positions on weakness. Waiting for entry on refiners but not now.

2008 May 08 08:49 PM

[Robespierre:]

Vikram:
"We are losing the economic war every time we ship our dollars abroad in exchange for $125 oil."

Who are you kidding? I actually feel sorry for those OPEC suckers that are willing to let go their real asset (oil) for a bunch of little pieces of green papers that the FED seems to be willing to supply in humongous quantities. The joke is on them until they smart up and ask something of real value for their oil

2008 May 08 09:23 PM

[maximax:]

Supply & Demand are not the only non-speculative determinants of commodity prices. Interest rates, inflation, exchange rates etc there is some good reading on that at econbrowser.com. also consider the comments from big oil (i think it was a total exec) stating that new oil will cost about $70-80/bbl to bring to the markets. Inflation is exploration is rampant, severe shortages of labour and materials. So even if all these interventionist policies worked out, what would it achieve? cheap oil is history, even if the US starts drilling up its territory, there will be no ghawar/cantarell waiting for you. and these deepwater discoveries like those of brazil require serious bling to develop i.e. if you want a decent supply of oil going forward, it will not happen with cheap oil. oil supply has formed a volatile plateau in recent years, and new developments barely counter declines of existing ones. there is a marked discrepancy between oil demand and supply forecasts - many of the usual oil demand forecasts make sense, until you start analyzing supply, finding out that there is no indication that this much oil can be made available over in the mid term. OPEC data&statements cannot be trusted, but the IEA is not much better (their historical oecd data is decent by oil data standards). Speculators do not mess around with the markets, they are part of it, most importantly providing liquidity while assuming the risk themselves. Government intervention puts taxpayer's money against the risk, and it usually benefits a chosen few and harms the rest. Like many actions of the present US government... I think the price increases over the recent 1-2 months were to a large extent driven by a chain of statements/news like the one of that Total dude which put weight to peak oil, and as we all know, commodity pricing incorporates future risks, so if the belief that future supply is insufficient takes hold, then this affects current prices as well. The recent development of the futures curve is in line with this view. Given this view, oil prices would have risen with or without a futures market, just slower without. But increasing the margin requirement is the only thing you can do about speculators. It will certainly reduce volatility, but not entirely sure about cheaper oil. And if you love your country truly, then don't even think about converting the SPR into a Bernanke-style FED. Going forward, oil will be tighter, not more ample. There are no vast riches of oil lying under the protected areas of the US, some yes, but do not assume mega fields, and only these allow the US to binge on like it is doing now into the foreseeable future.

2008 May 09 07:38 AM

[un happy Am...:]

The U S goverment better do something fast or we are going to see a complete depression in this country directly related to the price of oil.

Congress need to step up to the plate and put price controls on oil and gas. They should also open up drilling in Alaska and other places where we have oil in our own country and tell the envriomentalalist to shut the hell up.

I also belive it is time for the Amrican puplic to orginize a nation wide strike. This strike should last from 1 week to 1 month shutting down the entire nation it is time the people take back control of the country and the goverment.

One more thing I would like to know how much oil futuers Dick Chany holds and how much he is profiting from the price of oil.

2008 May 10 06:02 AM

[JREwing:]

@ un happy Amrican

Why don't you ask your parents, what happened in the 70s, when price controls were in place.

Oil companies didn't make any money and stopped investing in Exploration&Produc... then people stood in line at the gas stations.

THINK!

Why doesn't a Philippine rice farmer sell his product in the Philippines? Because there are price controls in place. He sells his stuff in Chicago, because he gets a decent price for it. Because he doesn't want to work is butt off, while others profit from his work and investment. Oops! And looky here, suddenly there is shortage of rice in the Philippines.

Can your socialist brain comprehend that?

That's the problem with socialists. Their arrogance outweighs their intellect. That's why every socialist system in history was a failure.

Keep blaming others for your shortcomings.

Nothing you proposed would achieve anything but total disaster.

And what the hell has Dick Cheney to with this? He was the boss of Halliburton, which is not an oil company, but an oil service company. They don't own a single oil field. They just get hired to work the fields.

And even if Dick has the USO in his portfolio. Why not? This is perfectly legal.

If you poetry socialists out there weren't such a bunch of losers, you would ask yourself: HOW CAN I MAKE MONEY OF THIS???

Then you wouldn't have to blame others.

2008 May 10 09:55 AM

[un happy Am...:]

Orginized strikes are not socialists tactatcts but realy the way the country was devloped to be a democrcy.
Yes it is true Dick Chany worked for Halliburton and they do not own oil fields but the fact is Dick Chany and this admistratrion are indet to the oil companies.

Also if the price of somthing like oil is going to afect the secruity and the economics of this country then the goverment must step in to control it in order to defend the country.

The proplem with people like you is you are the real socialists. You do not think people should have a difernt idea then yours. So you resort to calling them names when they disagree with you. This country was founded by people who disagreed with the goverment of England because of high Taxes and the goverment profiting of the people to a point that the average person could not survie except in poverty.

To say how can I make money off this is somthing a person not in touch with average working Americans live with daliy. We work make a living wage try to raise our famlies and pay our bills we are not the elite 1% who have the luxery of not woring how we will pay our house payment our how we will put gas in our car to go to work. We are now seeing the results of Bush Chany elite economics at work where people who work aveeage jobs and pay the biggest share of the taxes in this country suffer.

So the next time you call someone a socialists rember the founders of this country held a strick against their goverment because they where over taxed and held down in poverty by a gready goverment who provited off of them.

Yes I do belive not only George Bush and Dick Chany are profinting off this but most of the elected officals in congress are too. I belive they are controled by the oil companies and big business in general.

Remember that most companies in this country are small business and they employ most of the people.
Remember that these companies are also average people trying to meet there bills and they are suffering just like the people they employe. Also relize that if the big oil and the countries they diril in take complete control of the econmy then avearge American will see a depresion far worse than the 1930.

Also remember in America everyone can have an opion that is what keeps us from being socialists.

2008 May 10 10:25 AM

[JREwing:]

un happy Amrican.

Ah. This sure is a touching story. One that I will remember for years to come.

And by telling me that story, you proved me right.

Question: Is there any law in the United States of America, that forbids you to invest in the capital markets.

I will give you the answer myself: No, there is not. There are even government programs, designed to help plain folks to do that very thing.

You correctly state, that the United States of America was created by the American Revolution and you give the correct reasons for that revolution.

The heroes of the American Revolution will be remembered for centuries to come. But you know what. You wouldn't have been one of them, because they took their live in their own hands by basically giving the King the finger.

You would have needed a BIG GOVERNMENT to do that. People like you want to create the very thing the founding fathers sought to prevent.

A disconnected government in a distant capital, that intrudes in all aspects of living, in order for you to be treated justly. If thats not socialist, than you need to look that up i dictionary.

If you would spent a little less time on your self pity, a little less time on watching stupid car races or American idol, and a little more time on gathering information on where to invest, you might actually be able to achieve something for yourself and your kids, without depending on some government.

But you will not do that, because you rather blame Bush or Dick Cheney or Obama and Clinton or McCain in the future. It is always others who have to do stuff for you, because you think your duty is done by going to work and take care of your children.

On the other hand: I really don't care if there are price controls on gasoline
in the United States. Since you import 60% of your crude, you will have to settle for the 40% you produce yourself, because others around the world are willing to pay market price and they don't care if you feel treated unjustly.

You are a funny guy and remarkably shortsighted.

2008 May 10 12:10 PM