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Old 9th August 2011, 23:19   #256
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by gshanky View Post
If you notice I am not arguing against market economy. I am only arguing against speculation on commodities like Rice, Crude oil, coffee, onions, etc. You know common man's concerns. So I am arguing to drop commodity trading altogether or removing certain items like crude oil, agricultural goods, etc. from this form of trading.
Commodity trading is used by businesses for legitimate risk management / hedging activity . Banning commodity trading is a flawed logic , we learned it the hard way when we banned commodity trading in certain agri products in 2008 - it just had no effect .
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Old 9th August 2011, 23:44   #257
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Non industry participation is the bane of all commodity markets. Meaning? The finance houses are the ones buggering up the system. Any easy fixes? Actually yes. Throw the finance houses out of the commodity trade. Let actual demand and supply prevail. We might even get cheaper fuel and not be having this discussion for some more time.
I agree, we'll have to start some where. So at least start by throwing speculators out.

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Commodity trading is used by businesses for legitimate risk management / hedging activity . Banning commodity trading is a flawed logic , we learned it the hard way when we banned commodity trading in certain agri products in 2008 - it just had no effect .
risk management / hedging activity could be carried on in other segments. Just leave the commodities. With out going into details, I would say just say this - no effect is better than bad effect with respect to the price rise of the particular commodity.
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Old 10th August 2011, 10:57   #258
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Differential diesel pricing for passenger cars not to be introduced now!

"All these speculations have come to an end as the minister of state for petroleum & natural gas RPN Singh has told the Rajya Sabha on Tuesday that there was “no proposal under consideration before the government regarding dual pricing of diesel, at present”. If ever this dual pricing is introduced it will pave path for more corruption and black money which is one side, on the other side it will generate anger among diesel car owners as the Government is making it more and more difficult to drive a car."

Government Not To Introduce Dual Prices For Diesel

Cheers!
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Old 12th August 2011, 18:42   #259
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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I agree, we'll have to start some where. So at least start by throwing speculators out.

risk management / hedging activity could be carried on in other segments. Just leave the commodities. With out going into details, I would say just say this - no effect is better than bad effect with respect to the price rise of the particular commodity.

It is not prudent to throw out all speculators - that will be throwing the baby out with the bath water. Speculators do provide liquidity, and all investors who invest in long term projects are speculators - including farmers. A farmer making a decision to sow Soybean vs. cotton is essentially speculating on costs/benefit - a decision he makes on his own projection of what lies several months ahead - that is speculation.


what needs to be done is throwing out harmful speculation - making it immediately expensive to speculate for that purpose only. Tobin tax is a well known very very effective method - feared by bankers across the world, loved by all economists. That will kill unnecessary speculation in everything.

At the height of the financial crisis in 2008 it was being given serious thought - now the banks are powerful again, and the whole idea has gone down the toilet.
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Old 12th August 2011, 21:22   #260
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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It is not prudent to throw out all speculators - that will be throwing the baby out with the bath water. Speculators do provide liquidity, and all investors who invest in long term projects are speculators - including farmers. A farmer making a decision to sow Soybean vs. cotton is essentially speculating on costs/benefit - a decision he makes on his own projection of what lies several months ahead - that is speculation.


what needs to be done is throwing out harmful speculation - making it immediately expensive to speculate for that purpose only. Tobin tax is a well known very very effective method - feared by bankers across the world, loved by all economists. That will kill unnecessary speculation in everything.

At the height of the financial crisis in 2008 it was being given serious thought - now the banks are powerful again, and the whole idea has gone down the toilet.
When you allow the investor to trade and hedge against the futures contracts the volatility only increases and in many places there is not much benefit to the farmers. Honestly(or practically) speaking how many farmers in india do you think look at the commodity market before planning for a season.

I might be a bit off here but commodities market was adopted in mainstream trading primarily to assist in hedging and manipulate markets for takeovers, merging, etc. at the behest of investment banking rather than as a planning / predicting tool for the endusers.

It is difficult not to go though
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Old 12th August 2011, 22:14   #261
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by gshanky View Post
When you allow the investor to trade and hedge against the futures contracts the volatility only increases and in many r takeovers, merging, etc. at the behest of investment banking rather than as a planning / predicting tool for the endusers.

It is difficult not to go though

You must understand the role of futures trading between producers and consumers as opposed to the nonsense happening in today's date of big money center banks using commodities as asset classes an euphemism for having another horse to bet on.

Once you know this distinction then the term hedging does not sound like the pejorative it does today.

TO understand the distinction let me quote you an example:

A is soy grower.
B is an oil miller.

They have legitimate concerns about risks such as crop failure, oversupply due to a whole host of variables not in their control. Allowing them to trade futures is a way of ensuring they can iron out risks to AN EXTENT. That enables for efficiency in operations.

Now kahaani mein twist.

C is finance house who wants to profit from the trade. He claims he will provide liquidity but in essence ends up buggering the trade. Hires a bloody godown. Buys the soy from A. Ramps up the price in the spot market and starts twisting the futures trade out of shape.

C is a vermin and needs to be exterminated. Simple as that.

The above example while simplistic, illustrates what is happening in a whole load of commodities.

This crap needs to end. However these bank-sters have the netas in their pockets ( goras are as bad as the desis- in some cases more so). SO they go around the world mouthing platitudes about free markets and we pay through our noses for commodities that are inflated due to the actions of these vermin.
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Old 12th August 2011, 22:55   #262
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by RS_DEL View Post
You must understand the role of futures trading between producers and consumers as opposed to the nonsense happening in today's date of big money center banks using commodities as asset classes an euphemism for having another horse to bet on.

Once you know this distinction then the term hedging does not sound like the pejorative it does today.

TO understand the distinction let me quote you an example:

A is soy grower.
B is an oil miller.

They have legitimate concerns about risks such as crop failure, oversupply due to a whole host of variables not in their control. Allowing them to trade futures is a way of ensuring they can iron out risks to AN EXTENT. That enables for efficiency in operations.

Now kahaani mein twist.

C is finance house who wants to profit from the trade. He claims he will provide liquidity but in essence ends up buggering the trade. Hires a bloody godown. Buys the soy from A. Ramps up the price in the spot market and starts twisting the futures trade out of shape.

C is a vermin and needs to be exterminated. Simple as that.

The above example while simplistic, illustrates what is happening in a whole load of commodities.

This crap needs to end. However these bank-sters have the netas in their pockets ( goras are as bad as the desis- in some cases more so). SO they go around the world mouthing platitudes about free markets and we pay through our noses for commodities that are inflated due to the actions of these vermin.
As I told you before I would like to live in the practical world. Thanks though for the lesson in theory which may be relevant in the future
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Old 12th August 2011, 23:04   #263
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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As I told you before I would like to live in the practical world. Thanks though for the lesson in theory which may be relevant in the future
This my friend , is the practical world not some naive version of an utopian paradise that you seem to be holding on to. Businesses have legitimate needs which you may find untenable.They do not however lose their legitimacy because of anyone's opinion.

Enough said.
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Old 13th August 2011, 00:20   #264
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by RS_DEL View Post
This my friend , is the practical world not some naive version of an utopian paradise that you seem to be holding on to. Businesses have legitimate needs which you may find untenable.They do not however lose their legitimacy because of anyone's opinion.

Enough said.
I know comprehension could be challenging sometimes:

Your partial previous quote below

Quote:
You must understand the role of futures trading between producers and consumers as opposed to the nonsense happening in today's date of big money center banks using commodities as asset classes an euphemism for having another horse to bet on.

Once you know this distinction then the term hedging does not sound like the pejorative it does today.
Now,

1) I don't recall discussing anything about the distinction of the term hedging
2) Where does futures trading of any consequential size between producers and consumers happen without big money center banks involved? - imo they don't happen. I am willing to learn though

And look whats happening - Short-Selling Ban Boosts European Stocks - WSJ.com

Last edited by gshanky : 13th August 2011 at 00:28. Reason: typo
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Old 13th August 2011, 00:36   #265
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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I know comprehension could be challenging sometimes:




2) Where does futures trading of any consequential size between producers and consumers happen without
Priot to repeal of Glass-Steagall that was the scenario.

I do this for a living. There was enough and more short selling outstanding waiting to be covered. So a short covering punt does not make moronic moves by politicos good sense. Please do not go by what the hacks print or blurt out like morons on the toooob.
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Old 13th August 2011, 00:38   #266
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Priot to repeal of Glass-Steagall that was the scenario.

I do this for a living. There was enough and more short selling outstanding waiting to be covered. So a short covering punt does not make moronic moves by politicos good sense. Please do not go by what the hacks print or blurt out like morons on the toooob.
I am talking about today and you are not. And probably name calling is the last line of defense. What next?
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Old 13th August 2011, 00:44   #267
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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I am talking about today and you are not. And probably name calling is the last line of defense. What next?

I am talking about today too. Today's action explained in the context of yesterday's action.

Politicians and Business hacks(journalists) are infamous for their lack of perceptiveness in matters of business.
Is that name calling? Wow!

Last edited by RS_DEL : 13th August 2011 at 00:48.
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Old 13th August 2011, 00:56   #268
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by RS_DEL View Post
Priot to repeal of Glass-Steagall that was the scenario.

I do this for a living. There was enough and more short selling outstanding waiting to be covered. So a short covering punt does not make moronic moves by politicos good sense. Please do not go by what the hacks print or blurt out like morons on the toooob.
What exactly is this?

Quote:
Originally Posted by RS_DEL View Post
I am talking about today too. Today's action explained in the context of yesterday's action.

Politicians and Business hacks(journalists) are infamous for their lack of perceptiveness in matters of business.
Is that name calling? Wow!
I am repeating my questions here:
Quote:
1) I don't recall discussing anything about the distinction of the term hedging

2) Where does futures trading of any consequential size between producers and consumers happen without big money center banks involved? - imo they don't happen. I am willing to learn though
So, explain me - as of today where does futures trading of any consequential size between producers and consumers happen without big money center banks involved?
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Old 13th August 2011, 01:12   #269
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Why are Diesel cars priced more than petrol cars? is it because of differential tax? or does it really cost more to manufacture a Diesel car compared to a petrol car. If the govt is already taxing diesel cars than having differential pricing model will not make any sense. It is also very difficult to implement and you will definitely see the lorry walas starting a new petro-chemical industry of their own, as most of them are owned by politicians or people strongly connected to them. Why start a new trading business.

However if the govt is not taxing Diesel vehicles? then they should start taxing so that it offsets subsidy to certain extent.

Last edited by NikhilReddy : 13th August 2011 at 01:13.
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Old 14th August 2011, 12:47   #270
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Govt. is not willing to act. Otherwise there is a very simple solution to offset the benefit of subsidy that a diesel car owner has. Tax it at the time of purchase (new or seconds). This will at least lower the component of taxpayer's money going in subsidizing the fuel cost for passenger cars for personal use. Will also further discourage companies and prospective buyers for opting for diesel powered cars.

Am sure there must be pressures from car manufacturing lobbies on the govt. to do so.
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