What Crude Margin Hike?

Tyler Durden's picture

And crude jumps to pre-margin hike levels. But please don't be too hard on the CME Herr President (in keeping with the whole "Weimar" theme). After all, it took them 5 consecutive tries to kill silver. We expect at least the same number before we get crude back to a price where China can wave it all in for pennies on the dollar.

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SilverDoctors's picture

Why Was Mexico Attempting to Smuggle Truckloads of Gold Across US/Mexican Border?


camaro68ss's picture

It only takes $5 to dig oil out of the ground bitchez!

TheTmfreak's picture

The rest of the costs are taken by those greedy greedy oil traders.

Down with oil companies!! Increase taxes to drop the price down! (Or I guess give my local/state/federal government more money to spend from customers... They probably need that money more than we do anyways..... Not)

dbach's picture

Why don't you open a mine then? You'll be rich!

PrintingPress's picture

I've got a sum of $10 to add to your $5.  Perhaps, we can become oil men?

Firing Pin's picture

I'm good at laying pipe...perhaps I could join?

gordengeko's picture

"Short the bullshit and buy the dip.  Bi-winning!"

Charlie Sheen

augie's picture

Margin hike in 3......2.......1.......


EDIT* actually i shouldn't be so quick to judge. Maybe the CME is just trying to protect its clients from price voliti.... i can't even type that without my blood pressure spiking 100 points.


25 years old and already i need Diovan.

gordengeko's picture

Don't worry too much we just have to wait for the next passthu for it to all be over(if we are lucky).  Or perhaps sooner if one of these rocks haven't been discovered yet.  Maybe this is why these bankers don't give a shit, just keep kicking the can until something larger than life says ok, time to start over with these creatures.


gordengeko's picture

and if we fuck over our neighbors and sell our soul maybe these elites will let us join them in their underground shelters!


augie's picture

Holliday in Cambodia comes to mind.

Shock and Aweful's picture

Is this a reference to the "Dead Kennedy's"....here on ZH?


Shock and Aweful's picture

And remember....."There's always room for Jell-O"

To those of you who have no idea what I am talking about...I apologize for making you read this! haha



topcallingtroll's picture





augie's picture

that band was an identity.

NOTW777's picture

margin hikes - the new pomo

Dick Darlington's picture

Can't decide whether to blabe this surge on the "evil, evil speculators" or the "massive demand" from emerging markets. Either evil evil speculators are back or emerging markets switched the lights back on. (Nobody really likes it in the dark, ya know)

sun tzu's picture

We didn't give them permission to have electricity and cars. Let's bomb them.

Zer0henge's picture

Tyler, you funny... :-)

Rynak's picture

Why even bother doing hikes anymore? If the gloves are already off anyways, then why not just make a public announcement "We want prices down to this!", and the market fearfully salutes "JA, MEIN FUEHRER!"?

Urban Redneck's picture

Because the response might be El-Badri getting on AJ or CNN and saying "Hadji don't surf"

writingsonthewall's picture

Scheiße mein Gott in Himmel!

(continuing the Wiemar theme....)

Long-John-Silver's picture

I was watching the news yesterday as a Bubble Headed Bleach Blond talking head was claiming that gasoline prices were going to drop at least .50 cents a gallon this summer. I'm thinking she was the perfect choice of talking heads to utter such propaganda for the ignorant masses that would believe such BS and make vacation plans involving the burning of gasoline.

falak pema's picture

by the tone of your thread you would prefer they burn bubble headed beach blonds rather than gasoline...but I may have misunderstood you as I didn't see their butt sizes...being detailed.

ToddGak's picture

I saw that too...it was all over the national news.  Guess they just assumed the oil price would drop way down after the initial blow off.  Not so fast there.

One interesting thing...aren't we at roughly the same gasoline prices as 2008, when oil was like $150/barrel?  Oil price is way below that so shouldn't gas prices be in the low $3.00 range?  Something's out of whack here.  Can any ZH'ers explain the discrepancy?

tahoebumsmith's picture

America as we knew it is simply toast, we have turned the corner and there is no going back.... We are currently being held hostage by a fascist cartel that pulls Obamas and our Governments puppet strings. Now as this ponzi economy creates more challenges for the Cartel they simply throw down the strings, end the puppet show and move directly into a totalitarian rule. There are no longer free markets in this country, they control everything. They own you, they own and control your children and they own your retirement, that is if they decide to let you retire and leave you with a few crumbs to live off...

CrashisOptimistic's picture

All those comments and you guys STILL don't think in terms of geology.

The first oil spike was in 2008.  Pre upheaval.  Pre printing.  Pre Libya.  

But not pre geology.

Iraq's insane oil minister was replaced and the replacement's first task was to try to establish if not credibility, then at least remove the certainty that the ministry was insane -- by chopping 6+ million barrels/day off their oil production estimate over the next 5 or so years.

About 10% of India and China have cars and the other 90% want one.  The Chinese bought about 24 million cars last year.  Of those, 5 were electric.  No, not 5 million.  5.

But you guys go ahead and think that it's all monetary.  And obsess over your shiny metal too, if you like.  It's not going to matter.

pods's picture

But when this bubble pops (the FED bubble) we are going to be swimming in the stuff.  


JimBobOMG's picture

Inside info last week told me to sell.

onesoul's picture

Do you have any left? If so why?

onesoul's picture

Now margin is a weapon of mass destruction.

Should they reduce the margin requirement for all equity futures in all exchanges so to keep the wealth effect going and party going?

ToTheNthDegree's picture

Margin hikes are not only about taking commodities down - but also about strengthening the USD. As margin are increasingly reduced the huge commodities market as a whole can absorb an increasing number of USD.

NidStyles's picture

Why not just set all Margins to 100% and get it all over with?

Vagabond's picture

And give up an easy price suppression tool?  Keep dreaming.

sbenard's picture

This always happens when they seek to manipulate prices via margins. I've seen this more times than I can count. They try to control commodities prices while keeping the stock market rising. This is pure manipulation by policy-makers, IMHO.

Ultimately, it always drives prices even higher, because it gradually starves the market of capital needed to encourage development of greater supplies. It takes time, but as the market is starved of development capital, and prices temporarily drop, the supply also is weakened, thus ultimately driving the price higher still. After all, why would suppliers want to increase production in an environment of falling prices? They wouldn't! Think about it from the standpoint of a company that has spare production capacity! Why increase production and supplies in an environment of falling prices, despite strong demand.But policy-makers are so short-sighted that they never take this effect into account! They are fools! They shoot themselves in the foot! When policy-makers starve the market of development capital in an environment of strong, bullish fundamentals, in an attempt to manipulate prices lower, then supply also shrinks in short order. That only fuels the bullish fundamentals fire!

The consequences are as sure as day follows night. Prices will go higher!

pitz's picture

Hedging is a natural function of producers as well.  Take that away from them, and the perception of risk increases, less projects get developed, and prices go up.  This is what the 'crowd' that thinks that increasing margin requirements will knock down prices doesn't understand.

LRC Fan's picture

I sooo want to buy some Puts on USO, hoping for a huge score if they decide to hike margins within the next few days.  Someone wanna talk me out of it?  I'd like to buy the weekly options but maybe will buy some out of the money May or June puts to be a bit "safer" lol.  I think Tyler is 100% right that more hikes are coming, and short term prices probably have a downside bias for at least a bit.  Plus they just increased the circuit breakers to $20 per day, so we colud see a huggge move down coming.  I don't see oil ramping $20 up in a day, unlike the daily Dow 100 rally. 

Miles Kendig's picture

These margin games are, (besides being a mighty nut cruncher for traders, what farmer would like to see their plow get reduced to the point they're forced by the power of state coercion to plow with a coke spoon, a 1:1 world http://youtu.be/PRyDlVOE86U http://youtu.be/CK3uf5V0pDA) a sorry assed attempt by the fed and what now nominally passes for "market makers" to implement PRICE CONTROLS so the CME doesn't follow Buzz Lightyear to infinity and beyond (as discussed September of last year).  The WAGE CONTROL program does seem to be working just fine at moving the beans & lodging requirements of the Narod to the sovereign balance sheet.

The simple fact we have seen the action in margins that we have is a real time indicator of how scared shitless policy makers are at getting outed as the market/wage/price/stock/bond/commodities/fx manipulating, central planning pieces of shit they are.   Since the radioactive half life of these actions is now measured in hours one must look to what actions will be forthcoming as this effort at price controls now holds a primary screen at 33 Liberty.

One other thing is being made clear and that is the depth of the bullish sentiment within commodities markets generally.

Firing Pin's picture

Margin hikes raise risk. Almost any futures account will sell you out before your account gets to $0. So, even at .0001% margins, you could still trade, but at the first hint of a drop in the underlying contract you would be sold out (and effectively wiped out). Margin hikes (especially successive hikes) cause one to put more $ into the futures account, and then if this account were to go down, it would still be sold out at/near no-value (thereby not letting it go negative). Since futures firms sell out positions if the accounts are about to go negative, there is no need for hikes (other than to steal $ from the smaller players).