Here we go again

[Siebert Outdoors]

with the gasoline futures on the rise.  I've been following it for the last few months.  Its constantly going up.  Probably slow the economy even more or slow the recovery.  At this rate gas will be back to $3 by september.  

[Fishing Rhino]

Before September would be my prediction.  Sometime early in July.

[cart7t]

The commodities exchange is worthless IMO.  I has little basis in reality.

[Fishing Rhino]

The commodities exchange is worthless IMO. I has little basis in reality.

The commodities is like the stock exchange. They are based on speculation.

Speculation which often has nothing to do with the profitability of the company whose stock is being traded.

The problem with the commodities exchange is that the goods are basically sold at auction, which impacts market prices, while the value of a companies stock does not impact the market price of its goods.

[5bass]

The commodities exchange is worthless IMO. I has little basis in reality.

The commodities is like the stock exchange. They are based on speculation.

Speculation which often has nothing to do with the profitability of the company whose stock is being traded.

The problem with the commodities exchange is that the goods are basically sold at auction, which impacts market prices, while the value of a companies stock does not impact the market price of its goods.

Blah, blah, blah  +  blah, blah, blah  =  a bunch of BS  

These speculators need to speculate a little more efficiently.

[mrlitetackle]

no speculation or blah blah blah here....

all i know is that i am barely scraping by as it is........

gas gets seriously expensive as it goes up, and thusly starts to hinder some of my fishing trips (i frequent the FL coast when i can to hit the salt).

so it really ticks me off when i cant do what i love. >

[bassdocktor]

I'm guessing you are talking about regular pump prices being $3 again. Let me tell you I've passed several stations here in Chicago already over $3. I can only imagine what it's like downtown.

[SirSnookalot]

I just got back from Detroit where I paid $3.19.  Gas prices generally go up in summer as more motorists are hitting the road.  Demand for oil has been increasing world wide along with other commodities like copper.  This is a leading indicator that some believe the recession is easing, but not over.  Employment figures are a lagging indicator and jobless claims have also started to ease.

Higher gas prices are not always a bad thing and at $3.00 a gallon it's just keeping pace, look at what other goods and services cost 20 years ago. Many vehicles today get significantly better mileage they did years ago which would mean a smaller percentage of our income goes towards fuel.

Very true that markets rise and fall with expectations.

[cart7t]

The commodities exchange is worthless IMO. I has little basis in reality.

The commodities is like the stock exchange. They are based on speculation.

Speculation which often has nothing to do with the profitability of the company whose stock is being traded.

The problem with the commodities exchange is that the goods are basically sold at auction, which impacts market prices, while the value of a companies stock does not impact the market price of its goods.

Actually, I should correct myself.

The way the commodities market acts has little basis in reality of the supply and demand marketplace.

Just a year ago, when prices were going through the roof, the explanation was the Chinese were needing all this oil to feed an increased consumption via all these new vehicles they were driving.

So what happened? First, am I supposed to believe in the span of just a few months, the chinese were suddenly buying Dodge Hemi's and Escalades in record numbers? When consumption dropped to near record low levels in this country after prices pushed past $4 a gallon last summer, why didn't the prices drop as well?  Did the chinese suddenly stop driving vehicles this past winter when prices dropped to $1.50 a gallon across the country?  

Why should prices start spiking in March and April based on sooth-sayer weather forecasts of hurricanes that MIGHT happen in 4 months?

It's a system of middlemen getting to gamble and skews the typical supply and demand system this country was based on.

[Fishing Rhino]

The commodities exchange is worthless IMO. I has little basis in reality.

The commodities is like the stock exchange. They are based on speculation.

Speculation which often has nothing to do with the profitability of the company whose stock is being traded.

The problem with the commodities exchange is that the goods are basically sold at auction, which impacts market prices, while the value of a companies stock does not impact the market price of its goods.

Actually, I should correct myself.

The way the commodities market acts has little basis in reality of the supply and demand marketplace.

Just a year ago, when prices were going through the roof, the explanation was the Chinese were needing all this oil to feed an increased consumption via all these new vehicles they were driving.

So what happened? First, am I supposed to believe in the span of just a few months, the chinese were suddenly buying Dodge Hemi's and Escalades in record numbers? When consumption dropped to near record low levels in this country after prices pushed past $4 a gallon last summer, why didn't the prices drop as well? Did the chinese suddenly stop driving vehicles this past winter when prices dropped to $1.50 a gallon across the country?

Why should prices start spiking in March and April based on sooth-sayer weather forecasts of hurricanes that MIGHT happen in 4 months?

It's a system of middlemen getting to gamble and skews the typical supply and demand system this country was based on.

In stock market speculation, when speculation turns to sanity they call it a "correction".

Good word.  A correction is something one does with mistakes or errors, even if those "errors" are errors in judgement.

I have a friend who was in the home heating oil business as well as farming.

He'd buy and pay for his heating oil in the summer when it was traditionally at its lowest price for delivery in the cold months.

It's how some dealers could guarantee price to customers who "contracted" with them at the lower price.  

Last winter, he would have taken a bath.  Fortunately he sold the business a couple of years ago.

[Glenn]

Gas is averaging $285 in my neck of the woods.  The one bright spot for us is diesel - it's around $270.  When we bought our diesel truck last February, when deisel prices were higher than gas, everyone thought we were crazy.  Not any more.

[Alpster]

It's a system of middlemen getting to gamble and skews the typical supply and demand system this country was based on.

Just make the futures traders TAKE DELIVERY!!! I have no trouble with with big fuel users (trucking companies, etc.) hedging their bets against future increases in cost. They will buy and use the fuel. The those who only trade and never see the fuel should be forced to TAKE DELIVERY! JMHO

Ronnie

[Siebert Outdoors]

Before September would be my prediction. Sometime early in July.

We are sitting at 2.39-2.41 right now.  Thats where the 3.00 came from.  Some of you guys pay alot higher tax then us Missourians do.  Might also have to do with locations.  It is just frustrating to see the same thing happining that happened about a year or so ago.  We all know what happened in the end.

[Root beer]

Instead of making emotional prediction where the price is going to end up. You can take the months and the average retail price for each month. Say you want do January through May. Take the average price for each month, then create a scatter plot of the data's. Then draw a line through the scatter plot and determine whether the line would model a: Linear, Quadratic, Cubical, and err Quartic. (I think that all of 'em those are more simple ones you should used) And then create a formula that model the line and you can continue the scatter plot without actually waiting on the month to happen.

You can calculate the price of gasoline in the future using this model assuming it stays constant. Of course, the bad part is the taxes of some area will change price and the model will not adjust to new variable change in the market like: hurricanes, surplus, shortages, etc.I'm wondering if I can get two different numbers if I used weekly and monthly numbers. The monthly numbers will have less data to work with, but weekly will show more data and price changes.

This would be easier if you had a Ti-83 or Ti-84 calculator. Other wise you be busy all day.

I'm taking 12 hours of classes this summer, but if anyone wants to give me monthly data of price changes from January-May (average monthly price for retail or by the barrel) I will give you a mathematical accurate price of oil in whatever month you wish it to be. Probably take me 3 minutes to do it depending on how many data you give me.

That's enough procrastination, back to my biology homework.

[Root beer]

I take the above statement back, I prefer the price per barrel. Retail price has to much variable in it. Taxes, the amount of retail stores, etc.

This model will also give pretty good prediction where it will be be at in given month. Analyst use similar tool, only they use more broader indicators and data.

[roadwarrior]

The methodology you describe will simply project an average pricing

point derived from the data base: recorded prices over a given period

of time. It has no "predictive" value.

[Muddy]

That's all good for college economics, and if everyone is playing by the rules. Commodities Markets were first set up so farmers could draw on funds from buyers, who speculated what the crops were going to be worth.

Now lets shoot to the present. How about this 8 of the Enron Crew, you know the folks who fixed power prices on the West Coast, are now major players in the Oil Rings on the East Coast, check it for your selves.

These guys have money from clients with deep pockets, who are afraid of the precious metals markets ( where some big money usually rests during recessions) so they invaded the oil rings .

They are pushing the prices up, as we now have somewhat of a supply equally demand, unless they hold back and do not refine the barrels of oil they already have

Am I the only one who has been wondering , when the economy was on the brink and Christmas sales were needed HOW DID IT GO DOWN TO .99 a gallon , from 5.00 a gallon and why?

Oil has gone up from 54 (Dec 08)to 71 a barrell for crude a 76% jump

Gas at the pump has gone from .99 to 2.80 , I know this does not factor in demand. I also know that the price is changing during the day, when no deliveries have been made, so they are going by a cost they did not pay. Conversely , when oil goes down it takes a week and the decrease in price is not proportional to the increase

ps 2 weeks ago, an Oil Spokesman  said that since more hybrids are hitting the nmarket, and people are driving less we will see an increase per gallon. I do not make this stuf up you know

[Root beer]

The methodology you describe will simply project an average pricing

point derived from the data base: recorded prices over a given period

of time. It has no "predictive" value.

I didn't say the price was going to be exactly what the equation calculated. I just said it good tool to use to predict what future MIGHT be. I could calculate the price at 90.00 a barrel in July, but it could actually be 88 in July. I'm no mean a mathematicians, but these numbers have some strange relations. The slopes, rate of changes, etc. But again I could predict a 90.00 a barrel, and the price could be steam rolling towards 90.00 and all sudden, there is a surplus of inventory and a lagging demand that will send price back down to 60.00 a barrel.

It better to use math than guess with emotion. That all. :-X

[Root beer]

To add to my latter statement, why is it so common to hear news report that is similar to this "The financial statement of XYZ company as exceed analyst PREDICTION." or "The financial statement of XYZ company as fail to meet analyst predictions." Sometimes it will read "The analyst for JP Morgan was correct on his prediction of XYZ corporations financial statement."

I'm just simply saying you can make a darn good near accurate statement using linear, quadratic, etc on price of oil. But there always the madness of man will cause that prediction to veer off a little.

But these predictions are only useful to emotions of the "lazy" investors who believes the analyst and willing to pay brokerage fee to stockbrokers to execute a trade. After all this is lifeblood of a brokerage firm.

Also, the predictions are sometimes right. Wonder why Hedge Fund managers make so much money? Are they right? or just plain lucky?

[Muddy]

Hah I knew it: ON THE LOCAL 4pm New ( ABC AFFILIATE HERE) The price of crude jumped today with the announcement of much lower GASOLINE ( not oil) reserves than previously announced by the oil companies. Tell me these folks ain't playing a fixed game :-?

[roadwarrior]

Exogenous variables separate fact from fiction:

http://en.wikipedia.org/wiki/Exogenous

Simple linear projection or regression analysis of historical data is

not indicative of future performance. It's the assumptions that make

the difference:

http://en.wikipedia.org/wiki/Regression_analysis

[roadwarrior]

Hah I knew it: ON THE LOCAL 4pm New ( ABC AFFILIATE HERE) The price of crude jumped today with the announcement of much lower GASOLINE ( not oil) reserves than previously announced by the oil companies. Tell me these folks ain't playing a fixed game :-?

Casinos don't lose money as long as they are filled with winners!

It's us suckers that pay the freight.

>

[Root beer]

Exogenous variables separate fact from fiction:

http://en.wikipedia.org/wiki/Exogenous

Simple linear projection or regression analysis of historical data is

not indicative of future performance. It's the assumptions that make

the difference:

http://en.wikipedia.org/wiki/Regression_analysis

If I cannot use wikipedia on academic paper, I will not let you use it on me. Sorry, Charlie. (I'm aware of the links at the bottom, but still, if I cannot use it on academic paper, I cannot let others use it on me)

I'm just saying regression formulas and other formulas are all mere prediction. Every single analyst are all mere predictions. This just continues to prove my speculation theory. Analyst predict one thing using any formula he wish, the company's performance exceed his prediction, the price of the stock moves upward. I've seen this with my own eyes. Not in a book. I haven't gotten that far into academia, yet.

You are an investment banker, you try to B.S. people in believing this company is next Wal-Mart and that the price is going to go up, therefore, you make all your money.(if you tried to tell me I'm wrong, I will give you history lesson of an investment banker taking a company public that had no revenue nor profit and this stock sold at 98.00 a share within few days.) I've read stories on account that fundamental analyst get themselves fired, because of conflict of interest between their prediction and the investment banker's prediction.

[tyrius.]

If I cannot use wikipedia on academic paper, I will not let you use it on me. Sorry, Charlie. (I'm aware of the links at the bottom, but still, if I cannot use it on academic paper, I cannot let others use it on me)

Look the words up in a dictionary then.  

I'm just saying regression formulas and other formulas are all mere prediction.

They're actually the opposite.  They only provide analysis of historical trends which may or may not have any bearing on future trends.

Every single analyst are all mere predictions. This just continues to prove my speculation theory. Analyst predict one thing using any formula he wish, the company's performance exceed his prediction, the price of the stock moves upward. I've seen this with my own eyes. Not in a book. I haven't gotten that far into academia, yet.

 

Of course you have.  This is pretty much how it works.  The market and the analysts come to an agreement (current price) as to the future value of the company.  This is done by predicting future earnings.  When those earnings substantially differ from the market's expectations then the stock must be repriced to be in line with the new data.  Why are you acting like this is surprising?

You are an investment banker, you try to B.S. people in believing this company is next Wal-Mart and that the price is going to go up, therefore, you make all your money.(if you tried to tell me I'm wrong, I will give you history lesson of an investment banker taking a company public that had no revenue nor profit and this stock sold at 98.00 a share within few days.) I've read stories on account that fundamental analyst get themselves fired, because of conflict of interest between their prediction and the investment banker's prediction.

That only works for IPO's.  The investment bankers are trying to get the best price that they can for their client (the company offering the shares).  Analysts are different from investement bankers which leaves me confused as to why you are trying to bring investment bankers into this discussion.

I suggest spending more time studying and less time trying to explain the markets on bassresource.

[tyrius.]

Instead of making emotional prediction where the price is going to end up. You can take the months and the average retail price for each month. Say you want do January through May. Take the average price for each month, then create a scatter plot of the data's. Then draw a line through the scatter plot and determine whether the line would model a: Linear, Quadratic, Cubical, and err Quartic. (I think that all of 'em those are more simple ones you should used) And then create a formula that model the line and you can continue the scatter plot without actually waiting on the month to happen.

You can calculate the price of gasoline in the future using this model assuming it stays constant.

Just to show you what your assumption really is.

I'm glad that it doesn't work.  I really don't want to be paying over $4 a gallon again.