Now look, look, don't get us wrong... we're all for free markets here. In normal times, the market is the best way to set prices. But in extreme times when the market stops behaving orderly and the prices make no sense, the government must, unfortunately, intervene. The first step is a ban, or at least an uptick rule, on shorting oil.
Copyright © 2009 by The Atlantic Monthly Group. All rights reserved.
What would the purpose of a ban on shorting oil be? What a retarded world we live in where someone is concerned enough about falling oil prices to actually write into MM's blog about it?
That was funny; the best was "mark to model".
Gorgus,
Turn the irony processor on and re-read everything.
Regards,
Neil
Gorgus,
Turn the irony processor on and re-read everything.
Regards,
Neil
I'm puzzled by this. How do you short-sell oil on the spot market? I get shorting oil in the forward market. You promise to sell an asset you don't own yet based on the belief that by the time the delivery date rolls around you can buy it for less than you just promised to sell it for.
But on the spot market - why would I enter in a contract to sell you 10,000 barrels of oil for delivery on 19 December if I don't already own 10,000 barrels of oil? (Or whatever amount is sensible). Won't you be calling me up pretty shortly to arrange the arrival of my tanker? Okay, I can call up the oil producers and buy my 10,000 barrels, but presumably every other short-seller is rapidly doing this, so spot oil prices should shoot up to meet their fundamentals.
Were you being ironic by making us re-read your comment Neil S?
Oh, it was a joke. Missed that one, I've clearly been reading too much silly stuff about forward markets lately.
You had to link into the actual article to notice that its a joke. Her blerb alone makes it seems like she's serious which considering some of her idiotic ideas you could make the case for.
You had to link into the actual article to notice that its a joke. Her blerb alone makes it seems like she's serious which considering some of her idiotic ideas you could make the case for.
Tidings of holiday cheer and good will to you and yours, likewise.
Knowing nothing about this blogger, he had me until he mentioned Hubbert's Peak.
I have an idea that New York's Gov. Patterson can get behind--a tax on futures contracts keyed to the price. For each dollar oil falls below $70/barrel, the tax increases $0.80
That was a brilliant piece of satire. The key to really good satire is getting your readers walking that knife edge of not knowing whether or not they are being spoofed- then punching them in the side of the head at the nearly last moment. The fancy model/graph of Hubbert's peak was a very nice punch.
For me, the unfortunate thing was that I had to link through Megan to find this, and I was already clued in by the title of her blog entry.
People are getting stupider.
The title is a bit of a give-away that this involves satire, unless you really like eating Irish children.
("A Modest Proposal" was a satire by Jonathan Swift suggesting that the Irish alleviate the shortage of food by utilizing the surplus of children. I'm sure some people missed the joke back then, as well.)
Of course, the important difference between a financial stock and oil being that it's at least conceivable to drive a sound company into bankruptcy by artificially driving the price down, creating a panic and credit downgrades which then feed on each other. Not so with oil -- no way to drive the fundamental value of a barrel of oil to zero.
He is NOT "all for free markets"; he is a statist and pro-central planning. Only an unpricipled pragmatist could even imagine this guy is otherwise.
With 'free market advocates' like these...
I guess this may have been a joke. I agree with the poster who wrote, "You had to link into the actual article to notice that its a joke. Her blerb alone makes it seems like she's serious which considering some of her idiotic ideas you could make the case for."
I would also note that being unprincipled in principle also makes it hard to tell the jokes from the serious comments.
The fact that it wasn't 100% obvious this was satire is quite telling.
No. Uptick is stupid, mainly b/c I make money going short. If I didn't then yes, it makes sense to introduce uptick to reduce mass panic.
A little invisible hand for ya'
k1
ryanculver.blogspot.com
No one ever went broke underestimating the credulity of blog commenters.
Artificially propping up house prices is also a stupid idea, but our legislators seem to think high house prices are a good thing.
Hey, Non-efficiency expert and like-minded folks.
I think most of the rest of us were tipped off by the post title.
"A Modest Proposal" is, after all, rather famous for being satire.
(I'd mock, in detail, your willingness to believe Megan was going to seriously call for a ban on short-selling oil, but it's not worth the effort.)
Jens - Thank you for explaining the title of the blog entry.
As for the piece itself, I agree with Klug that the best part was " If only we could just mark oil prices to model..."
As an academic who prefers theory to empirical work, it would indeed be convenient if I could just make prices behave in ways that 'confirm' my models.
I think the point is, when you clip something out of another article with absolutely no additional commentary; why is this of interest, etc., it hardly consitutes irony in an of itself. Clearly the article is ironic and the Swiftian reference becomes clear. It is not enough to produce the link. If you are not adding any value whatsoever, then don't choose a snippet of it, publish the link under the rubric "thought you might be interested in this" Megal, you killed the irony for me....you should be ashamed.
NO! Absolutely not. Why do so?
This is what gets me about the people who most loudly proclaim the benefits of the free market. They are all for it until they lose money.
Energy analysts have, for years, been warning that if the price of oil ever reached anywhere above $90-$100 for a barrel of oil you would see a process whereby the American consumer would not only cut back on their consumption of oil, but woudl likely be fundamentally unwilling to return to their previous levels of consumption for a protracted period of time.
Buyers, traders, speculators and oil producers correctly responded that the price of oil was determined by the market. Fine. They were right. It subsequently surged to over $120 per barrel.
Consumers then did what every logical analyst predicted, and the market suggested, that they do. They cut back their consumption of oil. Hence the price fell.
When the American consumer TELLS analysts and anyone willing to ask that they are consuming too much oil, do not like the fact that they are doing so and plan to cut back for the forseeable future, oil prices tank. As they should.
Couple that with an incoming Administration that has promised to swtich over to alternative energy, a burgeoning worldwide economic crisis and a China that can increasingly afford to buy less oil as they are hit by that crisis, and the price of oil, again, SHOULD be tanking.
This is insanity. Trying to blame the falling price on shortselling? Please. There were shortsellers when the price was skyrocketing too. The problem was there were simply far more buyers. That's the way it SHOULD be in a free market.
Now that there is a tangible, worldwide DECREASE in the actual consumption of oil the price should be tanking. That's life. That's a free market. Deal with it.
But don't come whining to us about how shortselling oil futures is now, magically, the problem, as oppose to the fact that we have a global financial crisis, a decreased demand and your product had likely peaked in terms of possible price at $120 a barrel anyway. Geesh. Talk about not wanting to deal with the consequences of anything even approaching free market capitalism.
No to the ban on shortselling! Simply.
@Slocum
Leaving aside that this was satire...
Please explain how it is possible to take a financially sound company to bankruptcy simply by shorting their stock.
This thread is the gift that keeps on giving. Thanks for the early Christmas gift, Megan.
Hmmm...the use of Swift's title is inappropriate. Swift's satire suggested that in order to deal with a food shortage we should eat small Irish children. I would suggest that this has a certain symmetry to something I've seen in Central American where on certain evenings, I would stand in front of my hut and watch in horror as giant flies would pick children off the ground and carry them away. It was an incredible sight. Peasants screaming...chasing these flies down the road, waving brooms. You can imagine the pathetic quality of this. Waving these crudely fashioned brooms at these enormous flies...as they carried their children off to almost certain death. Can you imagine it...The enormous flies flapping slowly away into the sunset. Small brown babies clutched in their beaks?
Compared with the horrow of these two true stories how can one describe a ban on the shorting of oil as "a modest proposal"?
Please explain how it is possible to take a financially sound company to bankruptcy simply by shorting their stock.
The only way I can see it is they aren't financially sound . They live on revolving debt and lenders are using their stock price to help determine their credit rating.
As long as I can't buy call options now - I don't car.
As long as I can buy call options now - I don't care.
Look, everyone who didn't get it off the title of Megan's post? If you're over the age of 22 and a native speaker of English, tear up your voter registration cards, stop posting comments on blogs, and sit quietly when other people talk about politics and policy.
Seriously. That's the absolute best thing you can do for yourselves and for your world.
"A modest proposal" isn't a subtle reference to a long-ago writing; it's a big flaming "SATIRE HERE!!" sign that gets used over and over by writers. If you haven't picked up on its repetitive use for this purpose by the time you've reached age 22, it's because you're either stupid or ignorant, and in either case clearly incompetent to hold an opinion on anything more than, oh, the latest American Idol.
Really. If this is the first time you've encountered such a title, you are an illiterate. If this is not, then you've managed to miss the sarcasm every time, which indicates you're an idiot.
No, don't respond to me. You aren't qualified to have any opinions; your responses are no more worth reading than the product of a six-month-old randomly banging on a keyboard. Don't waste your time and ours by pretending that you have anything worth saying. All of you combined don't have the brainpower to do anything but humiliate yourselves.
By the way, I'm sitting here in the bedroom of my parents house buck naked. I'm buck naked....buck naked....buck naked.
What makes you think we don't know it's satire, but, unlike Megan, we're also well aware of how, within the current economic environment satire too often turns into ACTUAL economic policy. No one actually went after Megan on this one. We went after the IDEA.
We have a sort of financial Wag-the-Dog scenario going on here.
Where people suggest outlandish, Swift-ian ideas, laugh them off then the government implements them.
Bail out the banks? Haha. Oh yeah. Good one.
I'm still one of those who is holding out to see how they try and manage another "bailout" for the likes of Steven Spielberg, Mort Zuckerman and Mr. Chew's "charities" that lost money in the Madoff scandal. Don't think they'll do it?
Stay tuned.
P.S. Some of us thought Sarah Palin was satire when SHE was first announced too. Turned out they were dead serious about putting her a heartbeat away from the presidency. Frightening.
Face it. The truth is often stranger than fiction.
Eh, based on the title alone it's unclear if the sarcasm is Megan's or that of the article's writer, especially given the bolded words in the snippet.
However, it becomes pretty clear early on if you bothered to actually read it; Clusterstock != Alternet...
Not kidding. Swift's satire was about an enormity. This guy's satire was about a stupidity. Its obviously satire if you read the article. If you read just the blurb it is not obvious and the comparison is not apt. In addition you are a pompous blowhard backing things up by one stupid post...but peel back the onion and what I think I see is a guy with a 120 IQ trying to pass himself off as a genius. I may be wrong about that but one thing is for sure and that is you are a dick.
Not Kidding, Really: I do not know about other commentators, but I thought Megan was being sarcastic about the post she was referring to.
The trouble with satirising stupid writing on the forward markets is that it's really really hard to come up with something that isn't said every day.
Again, whatever.
Jonathan Swift was a master of both Horatian and Juvenalian modes of satire. While there were unquestionably themes of enormity prevalent in all of his works, it's extremely limiting to only state that Swift's works dealt with enormity.
His work was first noted for being extremely biting and critical and was also criticized for what many viewed as excessive harshness. (Sound familiar? Sort of like the charge that is made against anyone who criticizes someone on either side of the aisle, be it Bush or Obama, nowadays.)
Swift's work began, strangely enough, by being highly critical of Christianity as evidenced in stories such as A Tale of Tub. It was also noted at the time for having a recurring Oedpial concept of harsh, domineering father figures whom Swift was critical of throughout his work.
My point is: simply saying Swift's satire dealt with enormity than attempting to dismiss anyone else's use of it for anything else is extremely limited and self-serving.
As for this piece being satirical, I repeat many of the ideas we've been told HAD to be satirical over the past year, turned out to be deadly serious. (Foreclosure moratoriums? Gas tax holidays? Bail outs for every service sector you can think of?)
Sorry if I'm not in as satirical a mode this year. But, recently, people have been serious about far too many things we all thought they were kidding about. And it's cost us billions.
John,
You made yourself look a clown.
Nothing new there, but it's obvious for everyone to see this time.
Yawn. Do you have anything substantive to add to the discussion James, or just name-calling?
John,
Where does the statement appear that all of Swift's work was about enormity? Can we agree that this particular satire was about an enormity?
Would you understand me if I said that your wife's ass was getting fat?
What I see here is your lame attempt to show how intelligent you are when what you've really provided is nothing more than a quick cut and paste job from Wikipedia.
"What I see here is your lame attempt. . ."
What I see here is rampant, useless name-calling.
Notkidding made a point. You chose to respond by calling him a dick.
He didn't make a point. He said that anyone who didn't get the joke was stupid. Now you trot out some obvious cut and paste job in order to try to convince us that you are something more than a pseudointellectual blowhard trying to punch above his weight class. Its annoying when you get found out isn't it?
Basic Fact writes:
"In addition you are a pompous blowhard backing things up by one stupid post...but peel back the onion and what I think I see is a guy with a 120 IQ trying to pass himself off as a genius."
I think that's a pretty apt description for the majority of the posters here. Not that it's a totally bad thing...
Staash
True enough.
Yawn away, bozo.
Coherent thought obviously makes you sleepy.
The trouble with satirising stupid writing on the forward markets is that it's really really hard to come up with something that isn't said every day.
Combine that with the government actually banning the short sale of many stocks earlier this year and it can be a bit more difficult to tell.
Secondly, I've seen the label "A Modest Proposal" used in different ways. One way is to label an idea as satire. I've also seen it used to label an idea as incredibly stupid and harmful.
"Mark oil prices to model." Awesome.
Is it April already?
Nice post, Megan.
The comment thread made it even better. ;)
Here in Israel we are all worried sick about the poor Ayatollahs. Whatever will they do?
Well, we've got a crack team working on getting them some of our famous Chicken Soup. It's a very special recipe just for them.
We have, however, warned the courier not to taste any on the way over. It's very special recipe...