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What these guys do is create volatility where there might not be any

Pretty much sums up the oil market to me...

Now if I had a really dirty mind and worked at (say) BP I'd think:

"Well: I'm structurally short about 30,000 Brent contracts: where can I find someone who trades alongside someone structurally long cos they run a fund - you know, like J Aron alongside Goldman Sachs".

Then when there's not a great deal going on, or there's some pricing to be done against settlements, or we're rolling the fund over month to month, or whatever; then I could march the market to the top of the hill and back down again and my friends who are alongside the fund could reimburse my losses from their profits OTC (off-exchange) in some way.

And we could both make profits from those naive fools hedging on the markets who actually thought the market prices reflected supply and demand.

But of course something like that could never happen because of our robust compliance department.

Our chairman would never allow it: hang on a minute, isn't he Goldman's chairman as well?

I'm confused.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Mar 21st, 2007 at 06:29:56 PM EST
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