Speculator's mocking the airlines

[Superpilot92]

Bskin,

That's more or less true in a well regulated open market. The key is transparency. The Hunt Bros tried to corner the silver market, when other speculators saw the huge position the Hunts held they realized the price was artificially high and they dumped their holdings. The Hunts were burned to the tune of $2Billion. Thats the traditional risk to cornering the market. What happens if non traditional players with massive amounts of money enter the market? Now add in a market where there is no transparency, i.e. you can not see who holds what or who's trading with whom. You get wash sales. What if these new players, all playing the same game (a herd mentality where no one company corners the market but as a group they have), own 70% of all existing futures contracts? As they trade amongst themselves (no risk in a wash sale) they are holding these contracts out of the market( artificial limiting of supply). The true speculator (who intends to take delivery) must enter the market and bid for what is available at that time. He must his business requires it. Thats trucking companies, airlines, refineries, etc. With these daily trends he can not sit back and hope that fear of a contracts expiration will cause a drop in price. Oil in normal trading is far to liquid for that. I'll show you that supply isn't the issue, I'll show you that the weak dollar doesn't cover current price either. What have been the effects of the Commodities Modernization Act? Why does the Intercontinental exchange exist? Who trades there and why don't those investment banks etc trade on the NYMEX? Please don't throw out cheap easy stuff like it's the fault of leftists, environmentalists, or the scapegoat of politicians. Stick to the point and explain the price.

Great post!!

 

[BSkin]

Wrote that late last night and totally missed the second part of what you wrote. I deserve the sarcasm, as my comments were really more for Milky not you. My apologies.
You are correct about regulation being needed to help deal with this current mess. The ugly thing about this is that limiting speculators to their originally intended role might not be a bad idea, if you don't take delivery you can't bid.

No need to apologize, I'm sure the post was accurate, just above my engineering/pilot mind

 

[AC560]

That's more or less true in a well regulated open market. The key is transparency

Nobody figured out what the Hunt's were doing till they started moving massive amounts of silver out of the US (good times for a couple of freight companies/airlines). You don't corner the market by advertising what you are doing. Randolph and Mortimer found that out the hard way as well in the FCOJ market of 1983.

As positions accelerated in the silver market the exchanges in turn raised margin calls on silver, conducive again to a free market. The same has been occurring on NYMEX for oil futures. Even you back out the $40 per barrel speculation fee somebody (who wants to kill all speculators) tossed out, oil is still above a level where airlines can profit.

The Big 3 Automakers are being killed by oil prices to an extent which makes the airlines misery look like a blow job. GM is trading at a 50yr low. Instead of bitching and whining they are innovating and trying to turn their business around. If the airlines spent half as much time trying to look internally how to solve their problems as opposed to blaming everything from global warming, moose impotence, and big il for their problems maybe they could make it work as well. Nobody was bitching about speculators when oil was $15 a barrel.

Foreign carriers are turning a profit, Southwest is turning a proft, cargo carriers are turning a profit. Maybe those carriers that aren't should look to what their competitors are doing to be successful.

 

[Freeze_gopher]

It's true that no one, well except the Hunts, advertises that they intend to corner the market. There were a lot of reasons that the Hunts got burned, but simply put when other investors saw what was happening they moved into short positions. What would have happened if it wasn't just the Hunts?, but two or three others all doing the same thing simultaneously?
Again I'm not talking about the NYMEX, or even speculation in general. I'm talking about the manipulation of oil prices via electronic OTC exchanges like the Intercontinental exchange, Commodities Futures Modernization Act, changes to existing law regarding energy commodities futures, and CFTC policy.
This has nothing to do with any specific airline, or the innovation or lack there of in the US auto industry. And no one complained when oil was $15 a barrel because the issue I'm talking about didn't exist.

 

[Gulfstream 200]

Nobody figured out what the Hunt's were doing till they started moving massive amounts of silver out of the US (good times for a couple of freight companies/airlines). You don't corner the market by advertising what you are doing. Randolph and Mortimer found that out the hard way as well in the FCOJ market of 1983.

As positions accelerated in the silver market the exchanges in turn raised margin calls on silver, conducive again to a free market. The same has been occurring on NYMEX for oil futures. Even you back out the $40 per barrel speculation fee somebody (who wants to kill all speculators) tossed out, oil is still above a level where airlines can profit.

The Big 3 Automakers are being killed by oil prices to an extent which makes the airlines misery look like a blow job. GM is trading at a 50yr low. Instead of bitching and whining they are innovating and trying to turn their business around. If the airlines spent half as much time trying to look internally how to solve their problems as opposed to blaming everything from global warming, moose impotence, and big il for their problems maybe they could make it work as well. Nobody was bitching about speculators when oil was $15 a barrel.

Foreign carriers are turning a profit, Southwest is turning a proft, cargo carriers are turning a profit. Maybe those carriers that aren't should look to what their competitors are doing to be successful.

Stop making sense!

Treat your customers like garbage, scare away your high paying business travelers to fractional, continue to slash each others throats....

It gotta be SOMEONE elses fault.....Oil, speculators, George Bush, The credit crisis, etc...someone....


cant be terrible service and attitude?
nah.

 

[Max Powers]

Hey moron, most of those pax at Netjets used to be YOUR everyday 121 pax. In fact, they used to buy first class tickets. I wonder why they choose to pay more for Netjets?

Because Your buddy George Bush lowered their tax rate to well below what it should be. Then he took away any and all government regulation which kept business fair and ethical; so that this punk could go out and spend 2.5 million for a 1/16th share in a Hawker 800 XP. NetJets growth year over year has been double digit. the Airlines which are for the common man has shrunk. Essentially the rich are fleecing the poor/middle class with the republican lobbyists laughing all the way to Netjets.

 

[Gulfstream 200]

Because Your buddy George Bush lowered their tax rate to well below what it should be. Then he took away any and all government regulation which kept business fair and ethical; so that this punk could go out and spend 2.5 million for a 1/16th share in a Hawker 800 XP. NetJets growth year over year has been double digit. the Airlines which are for the common man has shrunk. Essentially the rich are fleecing the poor/middle class with the republican lobbyists laughing all the way to Netjets.

George Bush 1, terrible service 0

 

[AC560]

Treat your customers like garbage, scare away your high paying business travelers to fractional, continue to slash each others throats....

Customers aren't the problem or really how they are treated. Passenger counts are higher every year, more people are flying, airlines are growing. I flew to DFW earlier this week on AA in First and Gail was great. The problem is the business itself is fundamentally mismanaged in so many different ways.

People continually say if it weren't for fuel hedging WN wouldn't make a profit. Well obviously, that means they are effectively managing their business and returning value to their shareholders.

The airlines need to learn the only thing which matters is shareholder value. Not how many flights, hubs, pilots, etc. When you focus on the shareholder and thus the bottom line, everything else sorts itself out accordingly.

If the pilots and labor want to do something productive they should be organizing an ousting of their respective airlines boards and get somebody to come in and turn their company around. Writing letters to Congress for help isn't going to do anything for anyone. Because if we are really to believe that oil speculators are conspiring to make billions don't you think they would cover their bases with Congress as well???

 

[AC560]

Because Your buddy George Bush lowered their tax rate to well below what it should be.

So did Bill Clinton (he lowered capital gains first). And you know what tax revenues increased after both cuts.

We are in a global economy, when you raise taxes on the people who have money. They take their money and move it out of the country. With the dollar already at all time lows people are doing that. Crank the tax rate up and even more capital flows out of the market. This means less investment in America which leads to economic stagnation and reduced tax revenues (it is spiral right into a real recession).

 

[Benhuntn]

Half the speculators are sellers and half are buyers. The sellers think oil will go back down and the buyers think it will go higher. Who exactly are the bad guys?