On 7/20/08 with the market price somewhere in the vicinity
of $128 a barrel, I posted a diary forecasting that the price would drop to (but not necessarily stop at) $110 a barrel.
It has now reached or exceeded that point, hitting as low as $106 or so If the magnitude of my prediction isn't apparent, had I been in a position to make an aggressive (it is labeled as such) futures trade on that inclination I would have turned my $20,000 or so futures margin, about $18,000 profit, almost doubling my risked funds.
Why do I bring this up? To be a smart assed know it all, showing off my sexy market forecasting ability(although the ability to predict implies----save for being a "bull market genius" like Jerome----actual understanding of the situation)? I assure you, not.....except for being an arrogant bastard, I'm the soul of humility.
I brought this up to make a point about wingnuttery....LEFT wingnuttery (which shoots the hell out of much needed credibility on other issues). While posting on this subject on a prominent diary on 6/26/08:
http://www.dailykos.com/...
.....which definitively stated (despite a glaring problem about speculators being "caught" going short as though this were not allowed for some inexplicable reason) that the price of oil was JUSTIFIED by fundamental demand ......oh, and it had lots of pretty shiny charts, which looked very impressive (one detractor correctly noted that it looked like a "sales pitch" for potential investors)........this diary about a very complex subject, not well understood by most, from a leftist "friendly" elicited a good deal of love and unquestioning
acceptance:
"......and his fancy graphs, well-sourced diaries, and analysis for a little more than the past 2 years and he has accurately predicted this surge in the price of oil, the collapsing housing market, and the catastrophic meltdown in the financial sector. And his predictions were made in the face of mocking, derisive comments from all quarters saying how absurd his arguments were because he was so far out from the conventional "wisdom" dished out by our corporate media.
BTW, his arguments do not go over my head. Not only are you insulting Jerome, but you are also insulting me and this entire community.
I think you are forgetting that reality has a well-known liberal bias."
Really, really excellent work, Jerome a Paris (1+ / 0-)
as usual. Thanks!"
And regarding my comments and a handful of other dissenters elicited a number of comments like this:
"I hope they pass laws stopping speculation. (2+ / 0-)
Soon.
Get it over with.
Then when the price continues to rise, that's the last we'll hear of it.
Democrats need to be wary of making false promises about energy. Because once we have the Presidency, the Senate and the House and none of this pans out, the backlash will be brutal."
Also some allegations of kookiness, crackpottery, tin foil hats, et. all for not going along with the party line.
Now, with the price being down from that point in time, about $30 a barrel, I have to ask "What happened to all of that fundamental demand?" Did all of the billions of newly wealthy Chinese suddenly decide to stop driving? Did we suddenly discover some massive new source of oil, increasing supply?
So who is it that is the crackpot? Or more succinctly, engaging in DISTINCTLY wingnutty behavior, as I put it at the time:
Accepting unquestioingly assertions that go along with our general beliefs about running out of oil, conservation, et. all (as opposed to say "Islamofascism").
Accepting unquestioningly assertions put forth by a "friendly" (From good Jerome here instead of Rush, Ann or Bill).
Without possessing further insight or knowledge, labeling and dismissing dissenting information as "tin foil hats"......("That's all just 'librul' BS)
I'm sure that I'm going to hear all kinds of "stories" (this is a financial services term, basically a simplistic plausible sounding load of BS to get the rubes to send their checks in ) about how this is "just a blip", or otherwise allegations that I and other detractors "just don't get it" (the usage of that phrase or attitude being another another curious parallel to right wing nuts by the way----in both cases, what "just isn't gotten" is their fear and ignorance of the Muslim world and market for oil respectively)
For Example:
"When oil is at $180/bbl or whatever a year from now (with Obama in office), will you agree that you were wrong here?"
This individual very comically by the way laid claim to being "In the reality based community"...he/she seems to "just know" (WINGNUT ALERT) that I'm right and they are wrong (sound familiar?), despite no apparent substantial understanding of securities markets (The Islamic world)
"Peak Oil" here, which I AM not disputing (yes, oil is finite-but at $80, it had already more or less DOUBLED TWICE), by the way is kind of analogous to 9/11....."but they attacked us....HERE...so ANY conclusion I draw is justified"
...Interestingly, getting back to the comments that I am sure this diary will elicit, you saw just just about the same kind of comments after the "pop" of that stock market bubble-"Yea, the fundamentals are still there, this is just a market correction"......these ended up being the same kind of people who rode tech stocks down from $250 a share to $2. I have to posit that what "just isn't gotten" is an actual understanding of how securities markets work with certain parties (financial services companies, hedge funds), having huge sums of capital at their disposal are able to basically take positions, and then push the market in their favor.....and in the favor of their "friends, both in business (oil companies) and politics (the GOP, with a mysterious decline in the months preceding an election)
So again, why do I bring this up......to make the point about LEFT wingnuttery........there is a presumption at times around here that having a position converse to the rights (which is usually wrong), makes us right by default.
This isn't necessarily the case.......quite often in fact, it isn't particularly with the "doom and gloom" set, who despite laying claim to being of the "Reality based community", lacking full knowledge of the subject they are addressing don't really have that much on the evangafundies awaiting the rapture, or cliche'd bearded man in a robe standing in Times Square holding a "The End is Near" sign.
This would be something to bear in mind as we judge the actions and decisions of "our" politicians, most notably presidential heir apparent Barak Obama.
V V
PS The same methodology that I used to forecast the move from 128 or so to 110 indicates that the long term trend broke at $114, now making trades that benefit from the decline of oil a "safe" bet instead of what was previously noted "aggressive".....New target price...$90 a barrel