Commodities trade is over
 

Maybe this happened way too late, but the oil scandal has ended. It may hover up and down in the lower 130's, high 120's until the dollar gains some power, (Which won't happen until the admin. change), but the investment portion has ended. Oh well, the damage is done though...

What is this "investment portion" you refer to and what has brought about its end?

Investors, both big and small, are beginning to take a second look at commodities as a long term investment. When compared to stocks and bonds, commodities (oil, natural gas, corn) do not represent a true asset class. They were never meant to be something the average investor would buy and hold for appreciation.

As it relates to the investment portion, the "easy" money has been made and collected in commodities. For much of the first half of the year, oil was seen as a currency play for large investors (banks, hedge funds). Now, a different set of circumstances exists. Banks, needing cash for their balance sheets, have begun cashing in on their commodity gains.

There are several reasons for the liquidation, but the most reasonable is that investors, much as they did in 2000, have come to the realization there is no reason oil should be at the levels it reached. High oil prices create inflation and that can cripple the world's economy. Why create a global recession?

Certainly, there has been demand destruction and that is best seen in the airline industry. Capacity cuts prove high oil hurts the economy. The belief that supply will be increased through drilling has also forced a second look at high oil prices. Negotiations with Iran haven't hurt either.

One of the first signs of a recession is supposedly a decline in oil prices after a sharp rise...

I would be willing to bet that oil has a long way to fall before a recession would hit, besides how much of a recession would it be at 50 dollars a barrel.

None because then we could start getting those SUVs back out on the road and put some of those auto workers back to work...screw those Prius's...(said with barely a concept of how the economy works)

so if oil drops back to say $100 a barrel or less does that mean all those furloghed will go back to work soon?

No I don't think so.....I think this oil situation has given sufficient cover for the execs of our company's for the bad decisions and greed they still make and wont let go of.....

The industry has had 3 years to address this issue and did nothing but sucker punch the public with stupid fees and devalue our worth so the CEO and VP could continue to collect their bonus checks...

The employees are not there to pay the bills...the customers are.

Who said the oil runup is over? Scandalous???

The last time I checked, the likely winner of the next Presidential election isn't exactly pro-oil or pro-drill friendly. And the current political party in power of Congress has done nothing to help us out since its runup except to accuse the oil companies of price gouging.

All it is going to take is one hurricane, one terrorist attack of an oil field in the middle east -- anything, and oil prices are going to spike again.

Let's be realistic here -- unless we 1. increase production of oil, 2. convince the American public to drive less or convert over to not-as-convienent sources of energy and get developing nations to do the same, 3. reign in the loop holes associated with oil trading; oil prices are going to remain high.

-Fatty

Oh no it's not, just exercising some options and contracts. Go long on oil, go long....