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Margin Hiker-In-Chief Fires First Warning Shot As CME Raises Crude Oil Margins
Back in April, when gas at the pump hit all time highs for that time of the year, and when the world was still hoping the euphoria from the LTRO would last (it didn't), Obama decided to implement his own centrally-planned vision of events in yet another market: crude. Recall: "now that Obama's uber-central planning mandate has proven completely powerless to redirect the flow of zero-cost money from acquiring real, as opposed to paper-based, assets (read crude), the Teleprompter in Chief will have a sit down with the nation at 11:10 am and in the latest sermon from the White House mound, will "confront" oil speculators once and for all. His plan: why encourage margin hikes of course - the same principle that crushed the spine of the gold and silver spike in 2011." Furthermore as part of his then adopted plan, Obama would "Give the Commodity Futures Trading Commission authority to increase the amount of money that a trader must put up to back a trading position. The administration officials said such authority could help limit disruptions in energy markets." Our conclusion was that "Obama is about to become the Margin Hiker-in-Chief." 4 months later, the MaHinC has fired the first warning shot. After all, while Obama would love to have 1600 on the S&P the day before the election, the last thing he would like is to also have the $150 in WTI that would necesssarily accompany it, and guarantee his reelection failure. Sure enough: the first attempt at disconnecting the hard asset market from the S&P has arrived, as the CME just hiked various Crude margins by about 3.7%.
In brief: central planning is now coming to a commodity market near you. But first the crusade against those evil, evil, oil speculators (read central bankers but not really) is about to hit crescendo all over again.
Be afraid. Be very afraid as this lunatic fancy that someone can control all asset markets is doomed to not only failure but a spectacular crash.
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I wish these central planners would make up their minds. Are we fighting deflation or forcing it to happen?
Obama did not make that margin hike. Somebody else did.
But he'll probably try to take credit if the oil prices drop.
Funny. It's a little early to hike margins.
Crude and soft commodities still have a loonngg way to go!
It won't work and the SPR will be tapped anyway.
and these margin hikes won't work out for him. this is NOT gold and silver COMEX fuckery. these people need to get their own lives and just all go away.
Here's a great call from 2009:
http://www.321gold.com/editorials/thomson_s/thomson_s_011409.html
Actually, it's all going to tank. If you are feeling bullish, which most everyone should be at this juncture, load up 50% in gold (or even better, 30 year US treasuries) and then take the other 50% and load up on FAZ.
FAZ is 3X short financials. This is a market waiting to be spooked. All the cogs should start to move within the next 72 hours.
you mean 72000000000000 hours ago this motherfucker needed to tank!
Ha! Yes, it takes very careful central planning indeed to get house and equity prices up, but commodity prices down.
Maybe Ben needs two different kinds of money to pull that off. He can print one kind and tighten the other!
Exactly. And I think, or at least I'm hoping, the public isn't so stupid as to believe after QE1, QE2, Twist 1, Twist 2 and promises of QEx that this is speculators and not something of their own doing.
Now that we are awared, it makes our doing as well.
What are we doing about it?
In making up his mind on which market to jack he went with crude over corn because.. well folks can always eat their Ipods... can't really drink gasoline.
But it is an alternative to hanging from a billboard.
No shit. Just make margins 100% on everything already. Then who will they blame when prices keep going up?
Sorry, didn't quite catch that, say again?
No shit. Just make margins 100% on everything already. Then who will they blame when prices keep going up?
Man does my hearing aid need batteries! Can you repeat that once more?
No shit. Just make margins 100% on everything already. Then who will they blame when prices keep going up?
Margin requirement for trading commodity futures: 100% or you must take physical delivery ....... problem solved. (sarc.)
I don't have the space for all that corn!
Actually, there was a time when physical delivery WAS part of the program!
Ohh, well why didn't ya say so in the first place?! :>D
Send this article to Obama.
I'm sure the monitors have perused and stored it away already.
Not to mwntion the increase in warmongering, now including the Iran (again). May an earthquake be with us...
Oh, I've got an email: I've won a sightseeing tour at the next FEMA-camp location, including free lunch and a basket. Nice!
well thats acceptably crazy...
"Be afraid. Be very afraid as this lunatic fancy that someone can control all asset markets is doomed to not only failure but a spectacular crash."
My guess is sometime between Nov 7, 2012 and March 31, 2013.
without futures to lock in prices, every marginal acre (that is not pre-sold between two parties) will not be producing. Hunger games, here we come.
Seems to have worked out just fine before the explosion in futures contracts. I guess nobody planted corn or wheat before Wall Street got involved.
Futures do not benefit producers or consumers anymore, they only benefit speculators and investment banks.
97%+ of oil contracts are held by investors whose only purpose for holding, is to roll the contracts into next month and unload for a profit. Very few speculators buy an oil contract hoping it goes down in value.
That is how you got $25-$147 per barrel in a few short years during a period where there were no supply disruptions.
Futures contracts for commodities have been with us for thousands of years right back to ancient Babylon. Its only the epic fuck up that is "modern" finance that has propelled it into another dimension where nothing is recognisable.
At least this is more out in the open than what happened in the last election cycle. A triumph for transparency.
Tell Obama that margin hikes apply to shorts as well as longs.
Except that in the short term margin hikes are utterly meaningless to a determined few with an agenda plus access to:
a) virtually unlimited virtual fiat
b) a precise overview of everyone else's position
c) a precise overview of everyone else's dry powder
d) foreknowledge of the event
e) and if all of the above isn't enough to git er done there is always the contents of the other side's accounts to be plundered
"It's those darn speculators !"
They make easy targets for the uninformed muppets.
From ZH last year
"Remember when earlier we said the CME had hiked silver margins for the 4th time in 8 days? We lied. In fact,what the CME did was to hike margins for the 4th (effective May 5) AND 5th times (effective May 9). That's right, dear reader, in one release, the CME has performed two concurrent margin hikes, which means today's action is the 5th margin hike in 8 days, a previously unheard of event! As of May 9th, the initial margin is $21,600, or 11% of the contract value, while the maintenance is $16,000."
They can increase margins at will and for no apparent reason but to suit undefined interests or parties. Stay away from manipulated US markets.
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why should commodity traders be immune to the price manipulation that stock, bond, and currency traders get screwed by every day? welcome to the party pal.
Oh this is getting good. Just the timing. 1/2 my kingdom to get the timing right. :)
? where the fuck did this guy come from,...
From the bowels of hell.
Manchuria.
Certainly not Kenya, because even they are not that retarded.
I've said it before, and I'll say it again...treasury bond futures are the way to go!!
http://govttrader.blogspot.com/
It gets more and more suspicious when they start offering strange maturities...oh wait.
Check out Obama's trading desk http://postimage.org/image/r8kwz3bq9/
LOL, the more the European Central bank and Federal reserve print the higher those countries being stuffed with worthless currencies the higher the prices. The middle East shouldn't accept dollars or Euros anymore for oil. They should ask for a hard asset instead.
The Fed's spanking begins when the US looses it's reserve currency status. The US has abused it's reserve currency status for years.
which leads me to wonder. Which came first the U.S. embargo on Iran or was Iran already planning to bail out of the fiat ponzi system via trade for gold ?
They have been under some form of embargo for a while. The original plan was for a non-dollar resource exchange, presumably Euro (around 2006 or 2007). The gold part seems to be a recent extra.
Only way Oblamebush wins election is if gas is under $3.00 in November. Even then his chances are dubious.
Right. People should vote for Mitt the twit as he will show everyone how to get those gas prices down. He is back from his "Insult the World Tour" by the way. In case anyone missed him.
Yeah like this fuck isn't insulting the world with each passing day. Or maybe you missed that.
I'm pretty sure the rest of the world likes Obama better than Romney, except for those Orthodox Jews who were chasing after Romney's van in Israel the other day, trying to get a peek at their hero.
Yeah I'll bet they love the dear leader a great deal as he is accelerating the destruction of this country.
Remember, Ron Paul was going to give you gas for ten cents a gallon - NOW. One real silver dime.
name something the Palestinians aren't outrageously outraged by. who gives a crap what they think?
wait.. doest this mean my position in DTO isnt dead?
Just what the refiners need. Obama blowing up their hedges. Looking forward to $6.00 gasoline. After nuking refiners like this three times, it is time to pass on the losses. Burning down your own refinery for the insurance money is starting to look suspicious.
What the refiners need is more crude. Have a look at the Brent spread, or hell, look at the spread to EVERY OTHER FUCKING TYPE OF OIL to WTI.
Only about 500K bpd of WTI is pumped anymore. It's insignificant.
The actual oil the world uses is priced about $115 and has been for weeks.
And this from Jim Sinclair at Mineset. Absolutely nothing has changed. Gotta luv it.
The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.
–Roman philosopher and statesman Marcus Tullius Cicero (106-43 BC)
But we all know what happened to Cicero
Al Capone moved in?
His head turned into a stage prop..same what happened to Crassus.
Controlling margins on real asset markets is slamming the exits shut for this fiat insanity.
physical barrels of oil keep stacking!
Yea, just ask the Hunt Brothers, who had the silver market cornered in 1982, how the doubling of margin requirements did for their investment!
and yet TOTUS wouldn't even dream of suspending the ethanol giveaway mandate. that would, after all, upset ADM and some needed electoral votes. incredibly, we use almost as much corn for fuel as we do for feed. and we have a massive drought.
but no, some margin hikes should solve a supply/demand problem. f'ing jackass.
Learn about the ethanol process and how it creates better cattlefeed.
http://www.youtube.com/watch?v=LxbsLioiXKs
Seriously.
Latest Foreclosure Data May Be A Bad Sign For The US Housing Recovery
But foreclosure starts – default notices or scheduled foreclosure auctions – increased 6 percent on a year-over-year basis. This represents the third consecutive month of increases after 27 straight months of declines.
And the foreclosure starts increased on an annual basis in 27 states, jumping 201 percent in Connecticut; 164 percent in New Jersey; and 139 percent in Pennsylvania.
The real estate market had started to stabilize on signs that foreclosure inventory was decreasing. But a rise in foreclosure starts suggests that a tidal wave of foreclosures is building, especially in states with a judicial foreclosure process.
Here's a chart from RealtyTrac that shows the 10 states where foreclosure starts climbed the most in July:
http://www.businessinsider.com/foreclosure-starts-rise-in-july-2012-8?nr...
"Summer of recovery?"
ever get the feeling this story is going to be the longest running horror franchise ever?
NAR: "It's going to get better nevery day
The foreclosure and short sale markets are horro stories. My friend has tried to buy one after another short sale in Cali only to get severely burned each time -- title defects, unrecorder transfer, lost papers, etc....he finally gave up and is renting since he does not want ot "buy hundred thosand dollar legal problem along with the house" he says.
can't blame him....
I wouldn't touch anything until the fraudclosure scams pan out.....maybe 5-10 years.
When they raise metals margins again it will only affect 6 people. Outta bullets. FUCME
bullish!
Of course that doesn't effect those HFT funds.
I've long said that before this farce is over, there will be no margin allowed on hard assets (PMs/Oil) in order to keep 'em tamed. The more I've thought about it however, I think by the time they approach 50%, maybe before, there will be no paper players - only honest Owners.
Hell, by then the only brokerage firms left will be JPMC and Goldman anyway. This is so much fun and sad at the same time.
Ok so price of plastic dildos stays flat by order of the government. NEXT!
What's a central planner to do? If you do QE3 in September, you risk high oil costs preventing your reelection. If you don't do QE3 in September, you risk a temper tantrum stock market sell-off preventing your reelection. Seems like we'll get a pretty good idea of whether or not QE3 will happen in September by how aggressive they attack the oil price over the next 5 weeks.
which begs the question. why wasnt it done in 08?
CME = Big Fing Joke....
Where is Corzine?..... Not in jail!
believe me i live 200 yards from the door. i want to vomit on the sidewalk every weekend when i walk by. POS s
Bottle of Bollinger... mutherfucker.
Oil will be hypothecated by war. Can't take delivery on futures.
He can hike margins on crude as much as he wants. The vast majority of those playing in the crude futures market shouldn't be doing so anyway.
Wow a whopping 3.7% margin increase. You can still control billions with a few million.
i dont think QE will be done in sept and ive said a thousand times im sick of the talk and by talking about it only plays into their silly game. Fuck em. We should have QE discussion/mention ban on ZH. That being said not after the election either. Like they care after the election. All this bullshit is going on because your 3 months away. After that i think they will let it crack. think like a criminal. If after the election they let the market be one. That will some of the fastest short money made since 08/09
Reductions for Gold and Silver?
if history is any guide...and it sure lived up to its reputation vis a vis gold and silver when this happened "the margin increases first cause prices to spike" not fall as in effect "you're calling out the market." we'll see what the market does but "this is the oil market" and...to do as is my wont in these here parts..."not merely gold or silver." this sucker is friggin HUGE. The irony that oil is priced in dollars and we STILL feel a need to raise margin should be lost on no one!
It's deflation. The US government may be able to slow it, but once the US government has spent all their tactics (which is just about now), the intensity of deflation will kick into high gear.
ZH posted this obvious conclusion weeks ago.
Not sure why it's important to bash the outcome that was expected.
a pre-emptive strike? ... but is it fighting the last war or 'centrally planning' the outcome you want?
the ancient Greeks learned very well .....don't mess too much with the gods ... your hubris will blow you and everyone else out of the water
I like the idea of the administration trying to manipulate the markets. Some of them may learn something about capitalism in the failure though i am sure it will not be obama. The law of supply and demand can not be altered, repealed or amended.