Alex Trias

What's Driving Up the Price of Oil?

This was an amazing article. You know what I think is driving the price of oil? Idiots like me. Yep. I don't care what it is. If it moves, and it wanders into the proximity of a moving price average, I can trade it. Cotton, oil, stocks, volatility options, I don't care. And hey, I'm not even a pro. There must be millions of guys out there like me.

Honestly, you could train a doggy to do what I do. I know about as much as a doggy knows when it comes to politics and economics and stuff, but it's not like I care or anything. I make money using technical analysis and ergo, I don't question it. And I won't as long as it makes me money. So too with the millions of doggies out there like me. I think that explains the price of oil more than anything else. Woof woof.

I don't think oil is in price a bubble. I think something more basic is in a bubble. It's an investment technique that goes under the rubric of technical analysis. At some point, it must stop working because it is silly and widely used. But until enough doggy traders get fried, you will see asset prices outside of alignment with economic fundamentals.

Markets are not perfect; they are merely the least imperfect mechanisms for pricing assets. We should lower our expectations of their efficacy.

Preserving Wealth During the Global Banking Crisis

Exceptional summary, which correctly points to the international scope of the credit crisis. Simply stated, the issue at this point is how world governments address the negative feedback loop created by a global recession on the one hand, and the destruction of asset values on the other hand. The main culprit in the destruction of asset values is the force of trading momentum. Generally, it is impossible to stand in the way of trading momentum. The only solution is, simply, to make trading impossible. I wonder whether we may see a wave of public traded banks going private - perhaps through a combination of government ownership and ownership on the part of bank management. I would also not be surprised if various ultra-short ETFs were de-listed in the not so distant future.