Silver - $27 going to Zero! Call your boss..beg for job back

[Jonflyfish]

Wow- that was a weak comeback after accusing me of changing the subject when you buried yourself with BS answers about WTI vs Brent then YOU claimed that it was about refined products.
You have been successful at wasting a lot of time with a narrative designed to throw out accusations, then wiggle out with misdirected, confused, unknowledgeable and patently false answers and an accusation of misdirecting form the thread topic, which you led astray. No need to reply. You have already shown your (shallow)depth of knowledge along with very deep BS.
Cheers!

One more reply here, and then I'm done.

I had no BS answers about WTI vs Brent. The change in price ratio occurred when Libya was bombed (although low sulfur diesel requirements added to the equation), and then I posed a question to you about refined products, which I will now retract to keep the topic simple enough for you to follow without distraction.

Regarding stored oil, you can find a little information here:
http://en.wikipedia.org/wiki/Oil-storage_trade
You still have not answered my question on why a coin dealer holding back some inventory due to a drop in spot is extortion, while Goldman, et. al. holding back oil is, in your words, "maintaining integrity".

Can you answer that one simple question without dancing around the issue? My guess is a resounding no.

That's all good and fine as well as incorrect with respect to the WTI Brent Diff, which is what the question was. Doesn't matter though if you don't know. Dancing around it was interesthing however. I already tried to have dialog about your assumptions for supply holdbacks, asking where and who is doing it. You didn't answer. I also answered about gouging or extortion by taking advantage of customers vs choosing to not offer supply by choosing to not participate in a market. You ignored all of that and instead chose to continue flippantly making accusations without any credible sourcing.

Not worth the time to have dialog where the narrative is driven with accusations and ignoring responses, followed by more accusations about dancing around etc. If you look I tried to ask followup questions about your demands. You ignored that multiple times and continued to flippantly toss random comments around. Meanwhile you did not correctly answer about WTI vs Brent Diffs. In fact you suggested that WTI was trading at a premium (when it has been at a discount for quite some time now) becasue of some BS about changes at the refinery in Europe or something, when I was specific about WTI, which cannot be exported. It even looked as if you were confused, calling WTI and Brent refined products. Your tone was obvious throughout. Argue and stab, jab smeer and jeer but not genuinely have a constructive dialog. So we end it here, dissappointed.

And BTW- I'm sorry but quoting wiki about a storage trade is not credible. that's like reading on the internet that anything that is posted on the internet is true and you can quote that on the internet.
But I read the link. It is weak. I did ask if you were referencing the late 2008 (2009 is fine) time frame as that is the only time I was familiar with a glut of seaborne crude offshore, unlike the refined cargoes showing up in the NY harbor. However, the ships were not held back becasue they thought it would benefit in price. they were responding to price. Bringing in such a glut of supply 4-5 years ago when crude peaked at $147 drove prices down more than $100/bbl to under $40 extremely fast. Nobody gets credit for that of course.

Cheers!

[scyther]

Following this argument, I believe JFF with again leave the forum for a period of some months. Of course I could be 100% wrong.

[Engineer]

So we end it here, dissappointed.

Disappointing indeed.

I had a glimmer of hope that you'd actually be able to justify your opinion of how the futures market holding up delivery of commodities to speculate on the contango "helps to reduce costs", but it doesn't sound like you have an answer for that.

My opinion on the matter is simple. Every dollar made by those of you working in the futures market is a dollar parasitically taken out of the hands of producers and consumers. Holding back a tanker of oil or pallets of PM's to drive up our costs is simply part of the game to get a huge bonus.

Yet you have the gall to accuse a lowly shopkeeper who rations inventory of being an extortionist. That's the truly disappointing part.

[Jonflyfish]

So we end it here, dissappointed.

Disappointing indeed.

I had a glimmer of hope that you'd actually be able to justify your opinion of how the futures market holding up delivery of commodities "helps to reduce costs", but it doesn't sound like you have an answer for that.

My opinion on the matter is simple. Every dollar made by those of you working in the futures market is a dollar parasitically taken out of the hands of producers and consumers. Holding back a tanker of oil or pallets of PM's is simply part of the game.

Yet you have the gall to accuse a lowly shopkeeper who does the same of being an extortionist. That's the truly disappointing part.

Please go back and look at the last response. I expanded the reply. Unfortunately, your "glimmer of hope" should be for your own knowledge where you clearly don't understand the market physical nor financial. Aside from that, FROM THE BEGINNING- YOU NEVER CORRECTLY ANSWERED THE ORIGINAL QUESTION about WTI vs Brent Diffs.
Your "opinion" doesn't matter. Every dollar taken out of the futures market is provided within the futures market. It is a zero sum game. That my friend is NOT and opinion. Mechanically that is how it operates. Again go look and see my last response to your wiki reference. Crude dropping more than $100 rapidly was BECAUSE of the tankers showing up to put into the makret at favorable prices. The reality is that the refineries only have so much capacity. We could use more but there haven't been any new refienries approved for decades. So when the market responds with supply the refiners have to work through the supply. When a glut happens, prices drop out just like they did. That was quite a spectacular overshoot on both sides.
Further, most commercial trades in he futures markets end up as losses. The purpose was not for P&L but FAS 133 for hedge efectiveness activities.
I have the "gall" to call any unethical slimebag an extortionist. When I hear stories here about price gouging it makes me sick for those who are taken advantage of.
Cheers!

[Jonflyfish]

Following this argument, I believe JFF with again leave the forum for a period of some months. Of course I could be 100% wrong.

I could be 100% wrong but something tells me you are 100% right!

Cheers!

[Engineer]

Every dollar taken out of the futures market is provided within the futures market. It is a zero sum game. That my friend is NOT and opinion. Mechanically that is how it operates.

That is absolutely incorrect. Nate didn't have it at the top of his head, but he knew it sounded wrong when you said it the first time. Your salary does not appear out of thin air. It is a parasitic drain on the market, along with the costs of the markets themselves. Every trader, every fee, every summer home in the Hamptons, the algo machines, and even the electricity are money taken OUT of the market.

Mechanically, that IS how it operates.

[scyther]

Every dollar taken out of the futures market is provided within the futures market. It is a zero sum game. That my friend is NOT and opinion. Mechanically that is how it operates.

That is absolutely incorrect. Nate didn't have it at the top of his head, but he knew it sounded wrong when you said it the first time. Your salary does not appear out of thin air. It is a parasitic drain on the market, along with the costs of the markets themselves. Every trader, every fee, every summer home in the Hamptons, the algo machines, and even the electricity are money taken OUT of the market.

Mechanically, that IS how it operates.

Uh... I may be misinterpreting this, but are you attacking speculation in general? A "parasitic drain"? That may be true for all I know but it doesn't sound like something a libertarian would say. Although I noticed your signature's gone. Are you not a libertarian anymore?

[Engineer]

Uh... I may be misinterpreting this, but are you attacking speculation in general? A "parasitic drain"? That may be true for all I know but it doesn't sound like something a libertarian would say. Although I noticed your signature's gone. Are you not a libertarian anymore?

I'm not attacking speculation per se, but rather the speculators and middle men who try to tell us they work for free. They don't.

A "free market" is a good thing, and so is storage of commodities to keep the economy going on a level trajectory. Where you run into problems is when the people who print the money take over the market and use it to create boom and bust cycles. Those cycles are only good for the bankers, their minions, and carpet baggers. They're bad for the rest of us.

As far as whether speculation is a parasitic drain (and whether I'm a libertarian), I'll just ask the following:
Would you rather buy some shrimp straight off the boat for a $2/lb pound, or would you rather have the government mandate that the fisherman sell it into the market, let it be bid up by speculators, held back in warehouses to create shortages, sold through distributors to retailers, and finally sold to you for $12/lb?

I'm for the $2/pound stuff right off the boat. If I don't have time to meet the boat as it pulls into dock, I'd be happy to pay $3/lb to the local grocer who puts it on ice. I'd be rather unhappy if some chump randomly raced to the boat before the grocer could get there and marked it up to $5/lb...but made no effort to keep supplies stable every day.

The last guy may not be breaking any laws...but he's a drain on the system rather than a benefit to it.

[scyther]

Uh... I may be misinterpreting this, but are you attacking speculation in general? A "parasitic drain"? That may be true for all I know but it doesn't sound like something a libertarian would say. Although I noticed your signature's gone. Are you not a libertarian anymore?

I'm not attacking speculation per se, but rather the speculators and middle men who try to tell us they work for free. They don't.

A "free market" is a good thing, and so is storage of commodities to keep the economy going on a level trajectory. Where you run into problems is when the people who print the money take over the market and use it to create boom and bust cycles. Those cycles are only good for the bankers, their minions, and carpet baggers. They're bad for the rest of us.

As far as whether speculation is a parasitic drain (and whether I'm a libertarian), I'll just ask the following:
Would you rather buy some shrimp straight off the boat for a $2/lb pound, or would you rather have the government mandate that the fisherman sell it into the market, let it be bid up by speculators, held back in warehouses to create shortages, sold through distributors to retailers, and finally sold to you for $12/lb?

I'm for the $2/pound stuff right off the boat.

I agree, certainly. Fresh shrimp for 1/6 the price of old shrimp But why would the government need to mandate that it be sold on the market, for speculators to do what they will with it? Wouldn't it be in the fisherman's best interest to sell it to the highest bidder (i.e. the market) and then for that person to sell it for more if they could? I don't see why speculators require government to profit.

[Engineer]

I agree, certainly. Fresh shrimp for 1/6 the price of old shrimp But why would the government need to mandate that it be sold on the market, for speculators to do what they will with it? Wouldn't it be in the fisherman's best interest to sell it to the highest bidder (i.e. the market) and then for that person to sell it for more if they could? I don't see why speculators require government to profit.

Speculators require the government to mandate that the shrimp are 'inspected' before they're sold, at which point it is already in the hands of a middle man who will sell (in bulk) to the highest bidder.

The shrimp boat owner still gets $2/lb, and the other $10 goes to the parasites. You're absolutely right that the owner of the boat would be better off selling it to the highest bidder (a grocer or direct retail), but if the laws are rigged against that, what can he do?

We're really blessed here to be able to buy from standup guys like Nate, Doc, and SilverAddict, but can you imagine how much cheaper their bars would be if they could go straight to the refiners for their input materials rather than sending that silver through COMEX and distributors big enough to handle 5000oz orders?

[Jonflyfish]

Every dollar taken out of the futures market is provided within the futures market. It is a zero sum game. That my friend is NOT and opinion. Mechanically that is how it operates.

That is absolutely incorrect. Nate didn't have it at the top of his head, but he knew it sounded wrong when you said it the first time. Your salary does not appear out of thin air. It is a parasitic drain on the market, along with the costs of the markets themselves. Every trader, every fee, every summer home in the Hamptons, the algo machines, and even the electricity are money taken OUT of the market.

Mechanically, that IS how it operates.

That is pure rubbish and drivel. I'm not talking about drivel, The Hamptons, a new G IV jet or anything else you want to toss into the wind. Parasites, or anything else you want to load into the conversation has NOTHING to do with the mechanics of the FUTURES market. The futures market is a zero sum game. It is very simple. If you go long or short for spec, hedge, spread or otherwise, someone else must take the other side of the trade in order for you to have executed a trade. Unlike equities or options, there are no market makers in futures. Simply someone willing to go long or short and someone else willing to go short or long. Daily MtM settlements for P&L. This is mechanically how the futures market works. Attack anyone all you like. You seem very bent on doing that. It doesn't change how the FUTURES market works. And I saw your other posts about shrimp etc. There is no futures market for shrimp. Please, stick to the facts about the futures market, where you said I am "absolutely incorrect". I will be very keenly interested to hear you entertaining explanantion as to how the futures market doesn't mechanically operate as a zero sum game the way I described.

Cheers!

[neilgin1]

With comments like "some wide-eyed ditz you're chatting up in a hotel bar" I can only say that you have only resorted to sleeze and slothful drivel. I suspect, unlike you, I don't nor have I ever tipped the bottle. Furthermore, I'm happily married and couldn't stoop to the level of who to "impress" that obviously occupies your mind. Your comments are a disgrace and blasphemy to the god that you reference in your cantankerous frolic. Try to raise the bar to a decent social standard at a minimum, please.

As for the markets- you can talk to your guys all you like. My fortune 500 clients have and continue to demonstrate that the markets ARE empirically evidenced to be tranparent (incremental EPS) and there are $trillions traded as commercial hedge in order to compete on supply cost, which helps customers pay less for products. You can sing about Corzine all you choose. HE is NOT nor was he the exchange. Just another con man unlike any other. The markets have and continue to maintain integrity in price and price discovery over the months and years that you have been fighting against. I won't argue with you, however. The $billions cleared daily in the US futures markets keep humming along and help food makers, airlines, fuel providers and scores of others to keep prices down and control volatility in their cost of goods sold.

Cheers!

you know what, Jon....and i'm being REAL with you, i AM glad you're happily married.....TRULY i am, thats not bs, and feel free to admonish me on "social standards"...obviously you were nurtured FAR from the trading floor itself...which is fine. and please continue the positing of yourself in the elite of the "Fortune 500 clients" you service, work with, work for....but dont insult my intelligence by painting Corzine as just "another con man"...please. i know much better than THAT. Corzine was DEEP inside...if was JUST SOME ordinary "con man", he would NOT be walking around free...in fact i heard, he floated a trial balloon, about wanting to open another fund.....oh my, doesnt that bespeak to the utter arrogance of not only himself, but the whole rotten craven edifice and polity of what passes for the financial services sector.

and dont for a second, think that i am "anti-business", or anti-futures trade...or some lefty lib lab with agenda...or as one of my mentors shrieked at me in frustration, because i could not get either a coherent spread quotes OR "fills" out of a market that had gone "fast"....screamed at me, "i KNOW how the game is played, BUT WHO ARE THE PLAYERS?!?"...slammed the phone down...i never forgot that...pondered on that question for a LONG time....this was a great man...worth billions, and you wouldnt even know it.

There used to a house down on the floor, "RBH" and all their guys wore this on their jackets, "Free Markets For Free Men"...and everytime i saw that, man...i would think, "i love this place, i love these markets"....because i was raised by spreaders and hedgers, and that's what i learned.....it was the anti-thesis of whole "in and out" quick profit scalping floor trader, who relied on "the edge" of knowing that Trader "A" has a drt order to buy 1,000 whatever, so they could scurry into the pit and do a little "front running"....i felt nothing but scorn for these rats. i was in a different crowd, spreaders and hedgers, i'd spread bellies against hogs, corn against wheat, old crop against new crop, i'd spead crude oil, one, two or six "piece" spreads....of course, i remember when Southwest Airlines was WAY ahead of everybody else, and using the futures BIG TIME to hedge fuel requirements. I thought and still think Herb Kelleher was THE MAN....i so admired the whole "culture" of Southwest Aitlines under Herb, God rest......that was, to me, the ideal corporate culture....loyalty, integrity, value, teamwork...you cant ask for more.

oh btw, i dont drink...i do have a bottle of Mount Gay rum and a bottle of Lagavulin single malt, for when the odd ex Royal Marine commando, now turned merc, passes thru these parts....they do enjoy a wee "piss-oop"....but rather than waste any more time or energy contending with the likes of you....i want to play this for the guys...its called "The Warning"...its very good and succint, the futures industry is regulated by the "Commodity Futures Trading Commission"..the CFTC, and in 1996, a female lawyer Brooksley Born took the helm at the CFTC. She noticed, much to her dismay, a HUGE HIDDEN market, that was the over the counter "derivatives" market, trillions of dollars traded into instruments, that nobody REALLY knew anything about...and the more she inquired, the more pushback she got....."what were they HIDING?"..she asked. i'm not a fan of over regulation, but the idea that the "industry" is going to self regulate is bull[excrement]...the NFA underlines that point.....and Brooksley decided its time to act, this was in the 1997-98 period......and she taken to school, by the team of Greenspan, Rubin and Summers...they crushed her, got her out of the CFTC in 99, and everything just motored along...until of course, 2008, and Brooksley was shown to be prophetic....this is that story...its 55 minutes long, by Frontline and well worth your time, my brothers.

here's a 2 minute trailer for you to decide if this is a story interests you, and i'll post the link to the entire 55 minute piece.

and Jon, stay, or leave, it doesnt matter one iota to me.



The Warning

http://www.pbs.org/wgbh/pages/frontline/warning/view/

[neilgin1]

The markets have and continue to maintain integrity

Bwahhhaaahaaahaaa! Tell us another one!

US futures markets...keep prices down and control volatility

There it is!!!

If the markets have and continue to maintain integrity, perhaps you could explain how oil prices were propped up above $100/bbl for years while every storage facility in the world was swimming in the stuff, and tankers were sitting at sea with nowhere to go?

And perhaps you could enlighten me on how algos control volatility. Isn't their primary purpose to create volatility?

If you can offer any real evidence I'll gladly entertain the narrative. Simply referencing price does not say anything about where it should be. Every storage facility was swimming? I suppose you are an industry expert and can then explain why Brent has been trading at such a huge premium to WTI when historically it traded at a significant discount? I don't need to enlighten you about algos and increased/reduced volatility just like you can't prove otherwise. What I can prove is how producers in nearly every industry have effectively hedged to generally reduce the volatility in their balance sheets and earnings predictability. Or, I suppose you'll tell me that the fortune 500 companies exchanging interest rate swaps, jet fuel collars, structured contracts on nearly all food stuffs including 46 grades of corn syrup etc etc doesn't really happen on a daily basis becasue you toss non-credible rubbish out there about swimming in crude at every storage location.

I can also tell you that cargoes full of refined products that were destined for ports in Europe have been showing up off the NY harbor becasue the demand in europe has rapidly dried up.
This has been driving futures markets down rapidly. But, I'm sure it could never be market forces (supply) driving price discovery (offers), right?

Cheers!

NOW, there's a great post....no sarcasm....great topic. Brent's premium to West Texas!

Engineer, the problem is that the North Sea oil fields are in terrible state of decline.....akin to Alaska's North Slope fields...so the premium you see in Brent reflects that reality. Once a field starts it decline, it really picks up steam, especially when they "enhance" extraction.

Boy o boy, if you want to talk one heck of a trading opportunity, it's spreading Brent against WTI...either way, but to get into that, you have an appetite for REAL RISK and a large account...its a no widows and orphans deal, thats for sure.

About Qaddafi...yep, he made a huge mistake by forwarding the idea of an African based gold "dinar". he WAS being a good boy, renonced "terrorism", turned over all suspect WMD programs, etc....BUT anybody trash talk the dollar, or its status as the worlds reserve currency?....and its pretty certain, that person or entity will suddenly find they'll have a "bad day", usually in the form of very well funded "opposition militias" tooling around in brand new Toyota Hiluxes, complete with expertly welded 12.7 mm machines guns, or recoiless rifles on the bed of the truck, and a whole lot of crisp, brand new $100 bills in their pockets, a smattering of bearded white guys, lingering JUST out of sight of camera view....for "guidance"...(lol..oh man)

as far as motor gasoline prices.....cracking crude oik into mogas is viewed as a "loss leader" by the majors, and its not a problem that we dont have enough crude oil....we dont have enough refineries....i cant even remember when the last new refinery was built stateside...i want to say MAYBE early 80's....the problem is, enviromentalists just scream and holler something terrible, plus there always the NIMBY factor...(not in my backyard)...AND the oilco's dont REALLY make a huge profit from making gasoline......

energy wise, we DO have good news in this country, the Bakken formation, and the Williston basin.....i've seen various reports, some say it contains 18-24 billion barrels...(in context, or national proven reserves are in the 21 bln barrel range, and the Sa-udi Kingdom has 262 billion barrels....but "proven reserve" numbers are very dicey subject...closely guarded...subject to downward 'revisions', etc)....i'll also seen reports that Bakken/Williston contains anywhere from 271 BILLION barrels to 503 BBl's! but this was a 1999 report....and you have a slew of the reports that place this find anywhere from 32 BBbls to 167 BBbls...but the THING is this, whats RECOVERABLE?.....so you numbers that are all over the map, 3 BBbls to 24 BBbls...

the whole point is, studying daily domestic crude production, we are on a very sweet uptrend...to get at these stat's...here's a couple of sites:

the EIA, Energy Information Administration http://www.eia.gov/

it'll take a bit to navigate if you're interested....and one more, the International Energy Agency....IEA

http://www.iea.org/

personally i enjoy whiling away an afternoon, just looking at either energy or agriculture stat's....its fun.

hope that helps you bud...Jon probably knows of these sites, so they wont be of use to him. neil

[barrytrot]

Jonflyfish,

Don't go away because some people vehemently disagree with you. So what? You don't even know who they are and you will never meet them.

I personally enjoy your posts a lot and I know many others here do as well.

Probably even Neil as he loves to rail on you. And vice versa it seems.


As to the markets when I buy someone sells. The fact that someone uses their profits to hire people is external to the market itself. Does that mean that because of "costs" they have to bid higher or sell lower (depending on their side)? Possibly, but that doesn't alter the fact that one side buys and another side sells.

[Rodebaugh]

Silver is still at 23.

[Jonflyfish]

Jonflyfish,

Don't go away because some people vehemently disagree with you. So what? You don't even know who they are and you will never meet them.

I personally enjoy your posts a lot and I know many others here do as well.

Probably even Neil as he loves to rail on you. And vice versa it seems.


As to the markets when I buy someone sells. The fact that someone uses their profits to hire people is external to the market itself. Does that mean that because of "costs" they have to bid higher or sell lower (depending on their side)? Possibly, but that doesn't alter the fact that one side buys and another side sells.

Thanks Barry. I wouldn't go away because of any disagreements. Why I would go away is due to some characters determined to troll and flippantly toss blatent and patently false comments or accusations out into the wind then expect (demand) answers without any accountability for their own comments. It's cheap rhetoric and makes for content poor narrative, especially within a space of other people and their visual real estate.

Cheers!

[shinnosuke]

Silver is still at 23.

+1

What's your timeline for it falling into the $18-22 range?

[Jonflyfish]

With comments like "some wide-eyed ditz you're chatting up in a hotel bar" I can only say that you have only resorted to sleeze and slothful drivel. I suspect, unlike you, I don't nor have I ever tipped the bottle. Furthermore, I'm happily married and couldn't stoop to the level of who to "impress" that obviously occupies your mind. Your comments are a disgrace and blasphemy to the god that you reference in your cantankerous frolic. Try to raise the bar to a decent social standard at a minimum, please.

As for the markets- you can talk to your guys all you like. My fortune 500 clients have and continue to demonstrate that the markets ARE empirically evidenced to be tranparent (incremental EPS) and there are $trillions traded as commercial hedge in order to compete on supply cost, which helps customers pay less for products. You can sing about Corzine all you choose. HE is NOT nor was he the exchange. Just another con man unlike any other. The markets have and continue to maintain integrity in price and price discovery over the months and years that you have been fighting against. I won't argue with you, however. The $billions cleared daily in the US futures markets keep humming along and help food makers, airlines, fuel providers and scores of others to keep prices down and control volatility in their cost of goods sold.

Cheers!

you know what, Jon....and i'm being REAL with you, i AM glad you're happily married.....TRULY i am, thats not bs, and feel free to admonish me on "social standards"...obviously you were nurtured FAR from the trading floor itself...which is fine. and please continue the positing of yourself in the elite of the "Fortune 500 clients" you service, work with, work for....but dont insult my intelligence by painting Corzine as just "another con man"...please. i know much better than THAT. Corzine was DEEP inside...if was JUST SOME ordinary "con man", he would NOT be walking around free...in fact i heard, he floated a trial balloon, about wanting to open another fund.....oh my, doesnt that bespeak to the utter arrogance of not only himself, but the whole rotten craven edifice and polity of what passes for the financial services sector.

and dont for a second, think that i am "anti-business", or anti-futures trade...or some lefty lib lab with agenda...or as one of my mentors shrieked at me in frustration, because i could not get either a coherent spread quotes OR "fills" out of a market that had gone "fast"....screamed at me, "i KNOW how the game is played, BUT WHO ARE THE PLAYERS?!?"...slammed the phone down...i never forgot that...pondered on that question for a LONG time....this was a great man...worth billions, and you wouldnt even know it.

There used to a house down on the floor, "RBH" and all their guys wore this on their jackets, "Free Markets For Free Men"...and everytime i saw that, man...i would think, "i love this place, i love these markets"....because i was raised by spreaders and hedgers, and that's what i learned.....it was the anti-thesis of whole "in and out" quick profit scalping floor trader, who relied on "the edge" of knowing that Trader "A" has a drt order to buy 1,000 whatever, so they could scurry into the pit and do a little "front running"....i felt nothing but scorn for these rats. i was in a different crowd, spreaders and hedgers, i'd spread bellies against hogs, corn against wheat, old crop against new crop, i'd spead crude oil, one, two or six "piece" spreads....of course, i remember when Southwest Airlines was WAY ahead of everybody else, and using the futures BIG TIME to hedge fuel requirements. I thought and still think Herb Kelleher was THE MAN....i so admired the whole "culture" of Southwest Aitlines under Herb, God rest......that was, to me, the ideal corporate culture....loyalty, integrity, value, teamwork...you cant ask for more.

oh btw, i dont drink...i do have a bottle of Mount Gay rum and a bottle of Lagavulin single malt, for when the odd ex Royal Marine commando, now turned merc, passes thru these parts....they do enjoy a wee "piss-oop"....but rather than waste any more time or energy contending with the likes of you....i want to play this for the guys...its called "The Warning"...its very good and succint, the futures industry is regulated by the "Commodity Futures Trading Commission"..the CFTC, and in 1996, a female lawyer Brooksley Born took the helm at the CFTC. She noticed, much to her dismay, a HUGE HIDDEN market, that was the over the counter "derivatives" market, trillions of dollars traded into instruments, that nobody REALLY knew anything about...and the more she inquired, the more pushback she got....."what were they HIDING?"..she asked. i'm not a fan of over regulation, but the idea that the "industry" is going to self regulate is bull[excrement]...the NFA underlines that point.....and Brooksley decided its time to act, this was in the 1997-98 period......and she taken to school, by the team of Greenspan, Rubin and Summers...they crushed her, got her out of the CFTC in 99, and everything just motored along...until of course, 2008, and Brooksley was shown to be prophetic....this is that story...its 55 minutes long, by Frontline and well worth your time, my brothers.

here's a 2 minute trailer for you to decide if this is a story interests you, and i'll post the link to the entire 55 minute piece.

and Jon, stay, or leave, it doesnt matter one iota to me.



The Warning

http://www.pbs.org/wgbh/pages/frontline/warning/view/

Neil- I have no idea what your point is in general. After you flippantly toss inflammatory comments to besmirch and paint the picture of a derogatory character with disparaging remarks ad nauseam toward someone you don’t know from your “wide eyed” bar ditzes to Herb Keller. It’s old and trite and getting nowhere. Please stop.

I won’t launch into the similar lengthy platitudes of a career filled with high profile firms and characters that I’ve been associated with as a means of qualifying any comments. And the list is very long. I won’t talk about locals attempting to front run size, only to provide liquidity for others to execute, just like some screen traders chasing phantom bids/offers today. I also won’t discuss how the floor doesn’t exist for most markets today and how floor traders in general have been washed out after failing to go upstairs and trade on the screen. I won’t go into all these dynamics in depth, nor how anyone can post bids or offers now without going through a broker’s desk then wait for a call down to the floor etc etc. We could discuss all of this for hours on end.

When it comes to Corzine, he is not representative of market risk, nor exchange risk. I say that as evidenced with record volumes and market participation while capital flows and liquidity remain strong. Counterparty risk is different. I won’t defend the actions that folks accuse him of. I also believe in the justice system.

As for Southwest Airlines, you bring up an interesting topic. Everyone loves Herb. How could they not?
As far as their hedging strategy is concerned, they were a client and I was in Scott Topping’s office nearly every day during the spring and summer of 2008. This was during Gary Kelly’s watch and involvement. Somewhere in the archives this was mentioned a few times. I was hired by them as a subject matter expert.
So what? Well I can tell you first hand that futures were used very sparingly for some minimal jet crack. The tactics were mostly executed with OTC Asian zero, low premium and strip swaps (, a few 3-way and 4-way), along with fixed for float swaps according to price cycles as outlined in the strategy.

Neil, I do not have to toodle a song or whistle dogmatic pontifications without any accountability. That’s not my style. I look at things very pragmatically. It is what it is, not what I think or feel.

Cheers!

[neilgin1]

Jon, why do you think i brought Southwest? i was throwing you a 16 inch softball to swing at....it was a peace offering. i know your involvement there. Why you think i was talking about the Brent/WTI spread, Bakken, Williston, refining margins?....it was a peace offering, a common ground. You cant discern that?....i always want to talk, i'm just not going to take [shucks] from ANYBODY, so there it is.

Cheers?...or what?

[Rodebaugh]

Silver is still at 23.

+1

What's your timeline for it falling into the $18-22 range?

after the current Dead cat stops bouncing.

[shinnosuke]

Silver is still at 23.

+1

What's your timeline for it falling into the $18-22 range?

after the current Dead cat stops bouncing.

Roger that. I'll stand down until then, sir.

[barrytrot]

So even with $18 as a max low this is a pretty nice entry point. A max loss of $5 per ounce? Sign me up for that any day of the week!

[NHsorter]

Are you calling the bottom again

[barrytrot]

No, I'm done with that for now. I'm using Rodebaugh's bottom.

[Treetop]

I'm using Rodebaugh's bottom.

thats just wrong. your both married!