The stress tests have become more common at the physical trading houses in London, Geneva and Singapore. There is reason for it. Contrary to popular wisdom, high commodities prices are bad for pure traders: they consume lots of capital as houses need to finance their cargoes and post more collateral with exchanges for their hedges, leading to a decline in returns.
pure traders?
my guess is commodities market is gamed to make traders/speculators $Bs. eg, some in M/E, they know how to exploit it. They trade on margins just like stock speculators, and almost never take delivery of the commodity.
Marcus...
You're getting worse the Propaganda Dan at starting threads that are just a link.
President Obama said today that Americans are just going to have to get used to higher gas prices...To which Cheney said, "That's change I can believe in. I like this Obama guy..."
Ha. ha.
Funny how when Bush was president, it was all his fault.
Now...
Crickets...
This is more true than many would admit and many more know about.
Not to the extent that some believe, but I have come to believe there is more than a small amount of gaming the system going on.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
Reply With Quote
