This page has been archived and commenting is disabled.

Petrol Increase because Traders Can’t Read

Pivotfarm's picture




 

We all know that it’s not actually the message that is important but the way that the words are interpreted by those reading them. Never has that been more important than with Twitter. You only get 140 characters, which might be too much when we read some of the comments on there. But, for others it’s far from enough. Traders look like they could be needing a few more pages to get the full picture. Just a few days ago traders made a mistake when they read the tweet posted by the Israeli army on October 10th 2013. The tweet was to celebrate the 40th anniversary of the end of the Yom Kippur War in 1973. But traders in the world believed it was actually happening and acted immediately.

Twitter Account of the Israeli Army and Traders' Reactions


Twitter Account of the Israeli Army and Traders' Reactions

Oil Price

The traders of the financial markets thought that Israel was indeed bombing airports in Syria so as to stop weapons getting to the Syrian army (that in itself is telling that we are still in the same set-up and scenario as we were 40 years ago. We haven’t moved on an inch, have we?). But, over and beyond the fact that the Israeli army was pretty backward in actually posting a 40th anniversary celebration in this way, the traders should also have read the entire tweet and seen that Soviets don’t exist anymore and haven’t done for the past 22 years. We call them Russians now. Do traders actually know that?

Nothing had actually happened, but because of the Tweet traders started panic buying petrol thinking that there was going to be a major hike in prices. They caused the hike themselves by buying up as much as possible and oil rose. Just how good is it to take decisions like buying petrol on the say-say of a tweet? When the traders realized what had happened, the prices didn’t drop immediately. I guess they needed time to cash in on their error and make some money for the banks before the prices came back down to normal.

  • Oil prices rose by $1 a barrel, increasing from $110.40 to $111.50.
  • Prices rose even more (despite the knowledge that it was a mistake) reaching $111.74 per barrel.
  • The price of petrol has not reached that level for a month now.

Just like everyone, the traders are hooked in drip-feed fashion on their Twitter accounts grappling for every snippet of information that might have an effect on the markets. Might be a good idea for someone to make a mint. If you have friends somewhere in a high place, then get them to tweet, buy the commodity and then sell it at a profit. Easy.

Twitter Typos?

But, what country would gain anything more than propaganda votes from a tweet that celebrates the bombarding of airports in Syria, whether that be in the past or the present? That’s the trouble with Twitter and the fact that you are your own worst enemy sometimes, able to post what you like and when you like. At least there is Politwoops that allows us to see the tweets that are posted and then deleted by our politicians in the US.

  • Democrat James E. Clyburn wrote “Ggfhdieodgih”, which pretty much sums up the extent of his thinking perhaps.
  • Newt Gingrich (Republican) thinks that he has someone else inside his body when the talks in the third person: “Newt is backstage. Ready to take the podium”, thankfully deleted after 7 minutes.
  • Buddy Roemer (former 52nd Governor of Louisiana) once asked on Twitter “What is a FUBAR?”. There are just some questions that we should avoid asking, otherwise it’s the enquirer that ends up being that “Beyond All Recognition”.

Ambiguity is a splendid thing especially if it has a twist of humour thrown in for good measure. Except this time, the twitter account of the Israeli army should have been read with greater care. We could end up with another price rise in petrol that we could do without because a couple of traders can’t read English correctly somewhere in the offices of investors. Traders should pay more attention to what they are doing as they have a direct effect on our lives. The Israeli army should also watch out what they post in memory of their wars and gaining benefit from the bombarding of an airport, wherever that may be is no cause for rejoicing.

It’s no longer a Tweet if that happens it’s just a Twit, with all the foolishness of that trait of character rolled into one.

Other than that the traders of the financial markets have proved themselves to be nothing more than limmings in the purchase of their wished-for-articles after reading a simple post, however enthusiastic it may have been. They lost all of their skills in the individual-thought process long ago and just act in groups these days. What the others do, they have to do for fear of being left out. FOMO (Fear Of Missing Out) Twits; that's what they are.

Originally posted: Petrol Increase because Traders Can’t Read

 You might also enjoy: Darfur: The Land of Gold(s) | Obamacare: I’ve Started So I’ll Finish | USA: Uncle Sam is Dead | Where Washington Should Go for Money: Havens | Sugar Rush is on | Human Capital: Switzerland or Yemen? | Wonderful President of USA and Munchkins | Last One to Leave Turn Out the Lights | Crisis is Literal Kiss of Death | Qatar’s Slave Trade Death Toll | Lew’s Illusions | Wal-Mart: Unpatriotic or Lying Through Their Teeth? Food: Walking the Breadline | Obama NOT Worst President in reply to Obama: Worst President in US History? | Obama's Corporate Grand Bargain Death of the Dollar | Joseph Stiglitz was Right: Suicide | China Injects Cash in Bid to Improve Liquidity

Technical Analysis: Bear Expanding Triangle | Bull Expanding Triangle | Bull Falling Wedge Bear Rising Wedge High & Tight Flag

 

 

 

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 10/15/2013 - 09:36 | 4055562 yt75
yt75's picture

By the way, if there is a myth out of which it would be urgent to get out these days, it is :

First oil schock =Yom Kippur/Arab embargo = geopolitics = nothing to do with geologic constraints.

When the reality is much more :

- end 1970 : US production peak, the energy crisis starts from there, with some heating fuel shortages for instance (some articles can be found on NYT archive on that)
- Nixon named James Akins to go check what is going on
- Akins goes around all US producers, saying this won't be communicated to the media, but needs to be known, national security question
- The results are bad : no additional capacity at all, production will only go down, the results are also presentede to the OECD
- The reserves of Alaska, North Sea, Gulf of Mexico, are known at that time, but to be developed the barrel price needs to be higher
- In parallel this is also the period of "rebalance" between oil majors and countries on each barrel revenus.
- So to be able to start Alaska, GOM, North Sea, and have some "outside OPEC" market share, the barrel price needs to go up (always good for oil majors anyway) and this is also US diplomacy strategy
- For instance Akins, then US ambassador in Saudi Arabia, is the one talking about $4 or $5 a barrel in an OAPEC meeting in Algiers in 1972
- Yom Kippur starts during an OPEC meeting in Vienna, which was about barrel revenus percentages, and barrel price rise.
- The declaration of the embargo pushes the barrel up on the spots markets (that just have been set up)
- But the embargo remains quite limited (not from Iran, not from Iraq, only towards a few countries)
- It remains fictiv from Saudi Arabia towards the US : tankers kept on going from KSA, through Barhain to make it more discrete, towards the US Army in Vietnam in particular.
- Akins is very clear about that in below documentary interviews (which unfortunately only exists in French and German to my knowledge, and interviews are voiced over) :
http://www.youtube.com/watch?feature=player_embedded&v=fQJ-0jAr3LQ
For instance after 24:10, where he says that two senators were starting having rather "strong voices" about "doing something", he asked the permission to tell them what was going on, got it, told them, they shat up and there was never any leak. The first oil schock "episode" starts at 18:00

(the "embargo story" was in fact very "pratical", both for the US to "cover up" US peak towards US public opinion or western one in general, but also for major Arab producers to show "the arab street" that they were doing something for the Palestinians).

If this was a bit more known, maybe current propaganda "US energy boom, peak oil is dead, etc" would be a bit tougher to convey.

Tue, 10/15/2013 - 09:35 | 4055558 Winston of Oceania
Winston of Oceania's picture

Tweetus envy?

Tue, 10/15/2013 - 09:13 | 4055469 Mototard at Large
Mototard at Large's picture

Panic first, think later?

Tue, 10/15/2013 - 08:43 | 4055384 verum quod lies
verum quod lies's picture

Clearly most traders have the intelligence, time horizon, critical analytic skills, and attention span of a common fruit fly; and I hope that fruit flies are not offended by that analogy.

Tue, 10/15/2013 - 07:52 | 4055304 Downtoolong
Downtoolong's picture

traders in the world believed it was actually happening and acted immediately.

I bet it was their algos which actually traded the market while the traders went out and got busy drawing a line in the sand somewhere.

Tue, 10/15/2013 - 07:35 | 4055277 Took Red Pill
Took Red Pill's picture

Idiot traders. Someone should tweet that the $ is being replaced as the world's currency and is collapsing. Let's see what happens to the price of gold & silver.

Tue, 10/15/2013 - 07:43 | 4055289 Quinvarius
Quinvarius's picture

It is due for a wave of losing purchasing power.  Commodities as a whole look interesting.  By the time GS tweets what you want it will all be over for a while. 

Do NOT follow this link or you will be banned from the site!