Oil's energy contribution has declined by about 12% since 1999. The world's economies have also declined by about 12%. (Using conventional metrics, which are time delayed determinations, this will only be seen in hind sight). The massive destruction of asset values now occurring testifies to it happening.
Peak is well behind us, world economies have peaked and will continue to decline.
Posted: Sat Sep 20, 2008 12:49 am Post subject: Re: trying to understand: short selling
idiom wrote:
Cashmere wrote:
... The thing in which you invest - tullip bulbs, ...
Dude, how old are you???
That made ma laugh out loud, because I got the joke. _________________ The whole of human history is a refutation by experiment of the concept of "moral world order". - Friedrich Nietzsche
Posted: Sat Sep 20, 2008 10:00 am Post subject: Re: trying to understand: short selling
Niagara wrote:
charliebrownout wrote:
Selling someone something you don't own....
You know, if a person does that with a house or a car that's just called fraud. WTF?
No, it's not fraud. When you short sell you are borrowing the shares from your brokerage firm's account with the understanding that at some point you "cover" by purchasing the shares and repaying the brokerage.
When you buy a house or car, it's often the same. You borrow the money to make the purchase. That's not fraud.
Okay, so you're borrowing, essentially, from yourself or another company that pretty much knows exactly what you are doing and why.
Again, I'm new, so, to me, it looks like a crazy shell game...so, I expect what is being done to be morally on the level of a "shell game".
Posted: Sat Sep 20, 2008 10:12 am Post subject: Re: trying to understand: short selling
charliebrownout wrote:
Again, I'm new, so, to me, it looks like a crazy shell game...so, I expect what is being done to be morally on the level of a "shell game".
It's not a shell game. The people who's shares are being sold agree to loan them out. Usually the way that works is that it's a margin account. In a margin account, your broker agrees to loan you money so that you can buy up to twice as much stock as the amount of money that you deposit in your account. In exchange, you agree to let your broker borrow your stock shares for other customers that want to sell short.
The basic idea of a market is that there are two groups of people vying to control the price and between them they establish a fair price. The only way to have that in a stock market is if you've got bulls trying to push the stock up by buying shares and short sellers trying to push the price down by short selling shares. Otherwise the market is going to run towards unchecked an unrealistic optimism until there is a crisis. Then there will be unchecked panic as people get terrified of the company going bankrupt and the stock value going to zero. It leads to unrealistic run ups followed by exagerated panics. _________________ "We were standing on the edges
Of a thousand burning bridges
Sifting through the ashes every day
What we thought would never end
Now is nothing more than a memory
The way things were before
I lost my way" - OCMS
Posted: Sat Sep 20, 2008 10:29 am Post subject: Re: trying to understand: short selling
Concerned wrote:
Quote:
In finance, a futures contract is a standardized contract, traded on a futures exchange, to buy or sell a certain underlying instrument at a certain date in the future, at a specified price. The future date is called the delivery date or final settlement date. The pre-set price is called the futures price. The price of the underlying asset on the delivery date is called the settlement price.
The above from wiki. Looks like it's both price and date.
You must be in sales.
No reasonable interpretation of the passage you cited could yield the result that the price is a future price.
The price is the contract price, which doesn't change.
The instrument is called a "futures contract", or "futures" for short.
So of course the price that you pay now for the contract is the "futures contract price" or "futures price".
Next. _________________ Massive Human Dieoff must occur as a result of Peak Oil. Many more than half will die. It will occur everywhere, including where you live. If you fail to recognize this, then your odds of living move toward the "going to die" group.
Joined: Sep 16, 2004 Posts: 4935 Location: Southwest WI
Posted: Sat Sep 20, 2008 3:22 pm Post subject: Re: trying to understand: short selling
The stock market is WAY too complicated for me. I'm guessing about 99% of Americans have no idea how their money is invested... _________________ Clothing should be optional.
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